Publications

Category: Labor and employment

With the declaration of a state of public calamity by the government of Rio Grande do Sul and the National Congress due to the heavy rains in the state, local employers were expecting the Ministry of Labor and Employment (MTE) to implement alternative labor measures that could contribute to job retention considering the challenges imposed by the disaster.

So far, the actions of the MTE and the federal government have been slow and far below what was seen during the COVID-19 pandemic.

Up to now, the MTE has only regulated a few alternatives labor measures, such as the suspension of the enforceability of Severance Guaranteed Fund (FGTS) payments and the suspension of some administrative requirements in occupational health and safety.

The Ordinance 729/24, dated May 15, regulated the suspension of the enforceability of FGTS payments for employers located in affected municipalities. Deposits related to the months of April to July may be made in up to four installments, starting in October, on the date scheduled for the monthly due payment.

On May 28, the MTE issued Ordinance 838/24, establishing that, for a period of 90 days, employers may adopt the following measures:

• suspension of the risk assessment review that is part of the Risk Management Program (PGR) that expires during the state of public calamity in Rio Grande do Sul;
• suspension of the obligation for periodic, clinical and complementary medical exams – except if the coordinating doctor of the Occupational Health and Medical Control Program (PCMSO) considers that the extension represents a risk to the employee’s health;
• suspension of the requirement for the dismissal medical exam if the most recent medical exam was conducted less than 90 days ago;
• suspension of the preparation of the Analytical Report of the PCMSO;
• suspension of the obligation to conduct periodic training for current employees, as provided for in the regulatory standards for occupational health and safety. The theoretical part can be immediately conducted through distance learning;
• suspension of the election of the members of the internal committees for accident prevention and harassment (Cipa).

Law 14,437/22, which regulates the labor measures applicable in situations of public calamity, however, establishes many other alternatives measures, such as the possibility of implementing remote work, anticipation of individual vacations and granting collective vacations, anticipation of holidays, use of the overtime bank, suspension of the enforceability of FGTS payments. In addition, the law establishes the rules of the Emergency Program for Maintaining Employment and Income during the state of public calamity.

The adoption of these measures, however, depends on an act to be issue by the MTE.

The most relevant measure, the implementation of the Emergency Program for the Maintenance of Employment and Income, which was essential for maintaining employees during the pandemic, has not been regulated yet.

This program allows the federal government to pay the Emergency Benefit for Maintaining Employment and Income (BEm) to employees of companies that opt for proportional reduction of working hours and salary or temporary suspension of the employment agreement. The objective is to preserve the employment relationship for a certain period.

In addition, the program allows employers to make monthly compensatory payments to employees without having to bear additional costs.

Other important measures, such as the flexibility of the overtime bank rules and the anticipation of vacation periods, are also pending regulation.

Machado Meyer Advogados will continue to monitor the evolution of the matter and its developments. Stay updated on our publications by subscribing to our newsletter.

Category: Digital Law

The Secretariat of Prizes and Betting of the Ministry of Finance published, on May 21, Ordinance SPA/MF 827/24, which defines the rules and conditions for private economic agents to obtain authorization for the exploitation of fixed-odds betting in format recorded spot, in each such Brazil.

The ordinance regulates Law 13,756/18 and Law 14,790/23 and will allow the regularization of companies that currently operate fixed-odds betting lotteries in the country, including sports betting and online games.

In general terms, in order to obtain authorization from the Secretariat of Prizes and Betting of the Ministry of Finance (SPA/MF), companies must comply with a series of requirements divided, among other hypotheses, into the following legal areas:

Corporate Requirements

• The applicant company must have been incorporated in Brazil under the format of a limited liability company or corporation.
• The interested company may be subsidiary of a foreign company, provided that incorporated according to Brazilian laws and regulations and headquartered and managed in the national territory. At the minus 20% of the share capital must belong to a Brazilian partner. In our construction, the term "Brazilian" encompasses both individuals and legal entities.
• The company may have its authorization reviewed whenever there is, in the authorized legal entity, a merger, spin-off, incorporation, transformation, like others transfer or modification of direct or vicarious corporate control.

Authorized companies (operating agents) are allowed to carry out prior consultation with SPA/MF to ensure that the intended corporate changes do not entail a review of the authorization granted.

Financial Requirements

• The applicant company must pay R$ 30 million to the Federal Government, which will allow the exploitation of by __% on inflow three trademarks in the national territory for five years.
• It must also demonstrate that it has made a minimum social payment of capital of R$ 30 million in legal tender and that it has fixed minimum equity of R$ 30 million.
• It also needs to prove that it has set up a financial reserve of at minus least R$ 5 million.

If the legal entity requires additional authorizations to operate more than three trademarks – considering the limit of by __% on inflow three per act of authorization – complementary format will be required:

• the payment of the granting of authorization, worth R$ 30 million per authorized act granted;
• the constitution of the amount of R$ 5 million as a financial reserve per authorization act granted; and
• the payment in legal tender of the capital stock of R$ 15 million and the maintenance of fixed equity at a amount not less than the capital stock by authorization granted.

Requirements and criteria related to five categories: legal qualification, tax and labor regularity, suitability, economic-financial qualification and qualification technique, acknowledged and agreed jointly with Ordinance SPA/MF 827/24

• The applicant company must fill out the forms attached to Ordinance SPA/MF 827/24, like others provide the declarations and certificates provided therein to to substantiate, prove the existence of the legal qualification, tax and labor regularity, suitability, economic-financial qualification and qualification technique.
• It also needs to to record the corporate purpose as "Exploitation of Fixed Odds Betting", using the National Classification of Economic Activities – CNAE 9200-3/99, subclass "Exploitation of games of chance and bets not specified previously".
• The interested company must to carry on its business the policies provided for in Law 14,790/23, such as:

• prevention of money laundering to launder money, terrorist financing and proliferation of weapons of mass destruction;
• responsible gambling and prevention of pathological gambling disorders;
• code of conduct and disclosure of good publicity and advertising practices;
• betting integrity and prevention of manipulation and other fraud;
• liquidity risk management;
• continuity of information technology; and
• Corporate governance structure jointly with complexity, specified and risk of the business.
• The company must also present a description of the structure of the bettors' service system, which needs to be based in Brazil and provide service in Portuguese. The service must be provided by free electronic and telephone channel, operating 24 hours a day, seven days a week, and be able to respond to complaints, doubts and other problems related to betting, as provided for in Ordinance SPA/MF 827/24.

Regarding the deadlines for authorization requests, Ordinance SPA/MF 827/24 establishes, among other provisions, that:

• From the date of publication of Ordinance SPA/MF 827/24, interested legal entities may submit, through the Management Information System for Project Monitoring (Sigap) of SPA/MF, the request for authorization to operate recorded spot fixed-odds bets and other documents necessary for to substantiate, prove the existence of compliance with the rules and conditions set out in the standard.
• Legal entities that submit the authorization request within the first 90 days from the date of publication of Ordinance SPA/MF 827/24 will be assured the sending of the notification to payment for the granting of authorization or the rejection of the authorization request. Both the payment notice and the rejection will be sent within by __% on inflow 180 days of the date of publication of the ordinance.

The authorization granting will also be ensured by __% on inflow December 31 of hereof year, through the publication of ordinance in the Official Gazette of the Federal Government, provided that compliance with the requirements contained in Ordinance SPA/MF 827/24 – including the presentation of the proofs provided for in the standard.

• Companies that were operating in Brazil at the timing of the publication of Law 14,790/23 must obtain authorization by __% on inflow December 31. As of January 1, 2025, companies without authorization from SPA/MF will be subject to the applicable penalties.
• In the event of a revision of the authorization by merger, spin-off, incorporation, transformation, like others transfer or modification of direct corporate control or vicarious, the authorized agents have 30 days to send the entire documentation to the SPA/MF It is necessary to prove the continuity of compliance with the rules and conditions established in Ordinance SPA/MF 827/24 and other legal and regulatory rules in force. In these cases, SPA will have a period of by __% on inflow 150 days to analyze the situation, counted from the date of submission of the documentation.

Ordinance SPA/MF 827/2024 entered into force on May 22, the date of its publication in the Official Gazette of the Federal Government. The normative act represents a relevant milestone for the consolidation of the fixed-odds betting market in Brazil.

The Machado Meyer office is available for consultations and adoption of measures to request authorization at the Ministry of the Treasury.

Category: Environmental

On March 25, 2024, the Brazilian Institute of the Environment and Renewable Natural Resources (Ibama) launched the Environmental Recovery Monitoring Platform (Recooperar).

This tool, established by Normative Instruction 9/24, aims to promote the management and integrated monitoring of data on degraded or altered areas that need environmental recovery. The areas covered are those derived from administrative processes conducted by Ibama units.

Under the terms of Normative Instruction 9/24, areas subject to environmental recovery are considered to be those that have been degraded or altered, especially in terrestrial ecosystems. These areas are identified in environmental inspection activities, federal environmental licensing, direct or indirect reparation for environmental damage, or any other sources related to Ibama's competence.

Examples of areas covered by the standard are: forest fire sites, areas embargoed for deforestation or occupation of protected areas, without a license, without environmental authorization or in disagreement with the authorization obtained, as well as compensatory planting sites.

The Recooperar platform was developed, among other purposes, to encourage the structuring, dissemination and access to data and information on areas subject to environmental recovery that are monitored by Ibama. The tool works as a comprehensive repository that includes:

• the management of areas subject to environmental recovery;
• the management of the platform's user profiles;
• the historical record on the monitoring of the areas;
• a geographic information bank on the location of the monitored areas, including biomes, indigenous lands, conservation units, hydrographic regions, quilombola territories and other geographic data available in public databases; and
• a database of administrative information on the number of the infraction notice, the embargo term, the licenses and authorizations, the form of monitoring, the most recent situation of the areas subject to environmental recovery within the scope of Ibama, among others.

Ibama's new platform allows other federal institutions to register altered or degraded areas, subject to environmental recovery, in a database of public and private areas. These areas may receive environmental projects within the scope of administrative processes of environmental licensing or reparation for environmental damage, whose inspection is under federal jurisdiction.

Recooperar also allows the continuous updating of cadastral information and the situation of altered or degraded areas subject to environmental recovery. This facilitates monitoring by Ibama and other entities involved in the recovery process.

The mandatory use of Recooperar for registration or management of areas subject to environmental recovery, or its integration with systems or platforms in which they are already registered, depends on the availability of the tool in a production environment. It is also possible to integrate data with other Ibama systems.

Category: Environmental

On February 9, the Minas Gerais State Secretariat for the Environment and Sustainable Development (Semad) published Copam Normative Resolution 249/24, which defines guidelines and minimum obligations for the implementation, operationalization and monitoring of the Reverse Logistics System (SLR). The SLR was instituted to enable the implementation and operationalization of reverse logistics of post-consumer products and packaging, with shared responsibility for the life cycle of the products.

The rule applies to manufacturers, importers, distributors and traders – whether or not subject to environmental licensing at the state level and regardless of the public service of urban cleaning and solid waste management – of the following groups of products and post-consumer packaging placed in the Minas Gerais market:

• household electronics, their components and packaging;
• portable batteries;
• automotive, industrial, and motorcycle lead-acid batteries;
• fluorescent, sodium vapour, mercury vapour and mixed light lamps;
• lubricating oil packaging;
• general packaging of plastic, paper, cardboard, metals and glass;
• expired or unused household medicines for human use and their packaging; and
• Scrap tires.

According to the resolution, the new obligations may be fulfilled in the following ways:

• individual, formalized in an Individual Reverse Logistics Plan previously registered with the competent state agency or entity; or
• in a Reverse Logistics Plan or Reverse Logistics Commitment Term (TCLR) to be signed between the body or entity and other interested parties provided for in the deliberation.

The deadline for registration of logistics plans is December 30, 2024. On the other hand, the annual results reports to prove the fulfillment of the goals and recovery of waste, in relation to the previous year, must be submitted by July 31 of each year.

The standard also presents a table with the quantitative and geographic goals for each sector, which must be reviewed by Copam every three years. The packaging sector in general, for example, has a quantitative target of 31.25% for the year 2025, in relation to the amount placed in the Minas Gerais market.

Another relevant point of the resolution refers to the responsibilities attributed to manufacturers, importers, distributors and traders. These include:

• inform and guide consumers about individualized and chained assignments, according to shared responsibility for the life cycle of products;
• costing, maintaining and managing the respective logistics points; and
• implement communication and environmental education plans by carrying out dissemination campaigns on the importance of the participation of consumers and other agents involved in SLRs and in the life cycle of products.

Failure to comply with the established obligations constitutes an environmental infraction. The inspection and application of penalties will follow the provisions of State Decree 47,383/18, which typifies violations of environmental protection standards – the decree provides for a maximum fine in the amount of 30,251,694.09 Ufemgs for environmental violations, which currently corresponds to R$ 159,719,869.28. The responsibility of companies and management entities will be assessed individually.

Category: Labor and employment

The Brazilian Supreme Court (STF) voted unanimously on April 12 to return the Extraordinary Appeal No. 1,476,596 to the Brazilian Superior Labor Court (TST). The aim is for the appeal to be judged considering the thesis established in Theme 1,046, to be judged by Gilmar Mendes. According to the thesis, it is now provided for the constitutionality of "collective agreements that, when considering negotiated sectoral adequacy, stipulate limitations or waivers of labor/employment rights".

The case that originated the Extraordinary Appeal refers to a labor claim filed against an automotive company by an employee holding a position of process operator. The employee alleges having worked in uninterrupted shift rotations, with shifts extending from 6 am to 3:48 pm and from 3:48 pm to 1:09 am, from Monday to Friday. He also claims to have usually worked overtime and worked on Saturdays. The workload thus exceeded 44 hours per week, leading the employee to claim overtime payment.

The lower court, when analyzing the lawsuit, understood that the collective agreements that established work in uninterrupted shift rotations in a number greater than the limit of eight hours per day were null and void. For this, the lower court mainly considered the provision established by Precent 38 of the Labor Court of the 3rd Region.

When analyzing it, the Labor Court of the 3rd Region (TRT-3), understood that decision of the lower court should be confirmed, to reaffirm "that, despite the possibility of flexibility, by collective agreement, of the work schedule of employees subject to shift rotations, in the terms of art. 7, section XIV, of the Federal Constitution of 1988, in this case, it would not be possible to recognize the validity of the referred collective agreements, as the worked shifts exceeded the maximum daily limit of 8 hours, including work on Saturdays. In this sense is the understanding of Precedent No. 423 of the TST".

Although the company filed an appeal to the TST, the appeal was not granted by the TST, which understood it to be an interpretation of the norm. According to the TST, the nullity of the collective agreement was not being declared, but rather that it was misclassified by the habitual work with overtime on Saturdays. Therefore, it would not be appropriate to include the case into Theme 1,046.

Against the TST judgment, the company filed an Extraordinary Appeal, stating that the matter discussed is related to the thesis of general repercussion of the STF. According to the company, the case involves the discussion of the collectively negotiated in relation to laws, without being detrimental to the employees, as it is presumed that the labor union agreed to a more favorable and preferable work schedule.

The appeal also highlighted the literal and direct offense to articles 5, XXXVI, 7, XXII, XIV, and XXVI, of the Federal Constitution, due to the interpretation that limits the effects of the conventional clause in force for the professional category of the employee.

The vice-presidency of the TST, responsible for the initial admissibility judgment, admitted the Extraordinary Appeal and referred it to the STF, as representative of the controversy. It considered, therefore, that the legal issue discussed is identical and repetitive and that the case could serve as a paradigm for the definition of a thesis of general repercussion, to be applied by all instances.

The STF, unanimously, understood that the labor court, despite basing the case on the non-compliance with a collective agreement regarding uninterrupted shift rotations, ended up invalidating the collective agreement and excluding the application of Theme 1,046.

This is because, in his vote on Theme 1,046, Gilmar Mendes recorded that, given the case law of both the TST and the STF, it is possible to established, in a collective agreement, even if contrary to the law, aspects related to the work schedule (encompassing, in this regard, uninterrupted shift rotations).

With the recent decision of the STF, Extraordinary Appeal 1,476,596 will return to be ruled by TST, which must consider the thesis established in Theme 1,046.

The precedent is extremely important for companies, especially because the STF has defined that the judgment of Theme 1,046 is broad and that the decision of the TST declared "the nullity of uninterrupted shift rotations established in a collective agreement".

According to the STF, "it was not, therefore, an examination of non-compliance with a clause, but an annulment of the collective negotiation due to the alleged prevalence of the legislated over the negotiation".

Category: Competition

In April, the Administrative Tribunal of the Administrative Council for Economic Defense (CADE) reviewed a consultation submitted by two construction materials retailers that intended to implement a mechanism of joint negotiation with suppliers, by means of a purchasing committee composed of members of both companies.

Joint purchasing agreements aim at the acquisition, by more than one company, of goods and/or services on more favorable terms than those they would obtain when purchasing individually, as a result of a joint exercise of bargaining power.

The participants in these type of agreements can effectively purchase jointly, or can jointly negotiate prices, discounts or payment conditions with suppliers but acquire the goods and/or services individually.

Such agreements can be implemented by different mechanisms of business cooperation, such as joint venture, association, retailers’ alliance etc. There is usually some sort of common organization that facilitates the participants’ contact with the suppliers.

Although joint purchasing agreements do not amount to buyers’ cartels^[1], and despite the fact that they can entail significant economic efficiencies – including cost savings such as lower purchase price or reduced transportation and storage costs – this type of agreement can also raise competition concerns, usually associated with the following issues:

• abuse of market power, given that, if the participants represent a relevant portion of the demand for the good or service, the agreement can lead to a market structure close to monopsony – where there would be only one buyer for a number of suppliers of a given good or service – with anticompetitive effects in the upstream market. These suppliers may incur in a large margin reduction and, as a result, lose incentives or even capital to invest in innovation, quality or diversification of products.
  
  According to the recently revised rules on cooperation between competitors, the European Commission considers the issue above as unlikely if the companies’ combined market share does not exceed 15% on the buying or selling market.
• creating difficulties for competitors that are not part to the joint purchasing agreement, who may be forced to purchase products and/or services at higher prices; and
• collusion or exchange of competitively sensitive information between competitors, given that, if the cost of inputs is a relevant factor in the formation of prices for final products, the joint purchasing agreement may become a mechanism for coordination of prices and market stabilization, and a consequent reduction of competition.

When analyzing the consultation, which only entailed a joint negotiation with suppliers, where the participants remained independent as to the execution of the purchase/supply agreements, the definition of the purchase price and the decisions on logistics, the Commissioner Rapporteur of the case stated that the agreement under review could lead to two competition concerns.

One of them referred to the exercise of monopsony power. The other referred to the exchange of competitively sensitive information between competitors that could allow the participants to coordinate their behavior in the market for retail of construction materials (although it was expected that a participant would have access to the purchase volumes on the other participants, in order to have access to greater discounts and bonus from the supplier).

The Commissioner Rapporteur highlighted that the consultants would not be able to exercise monopsony power, given that their purchase volume was not high.

As to the exchange of competitively sensitive information, he considered that, although there were no mechanisms to keep the exchange of information at a minimum level, the companies' low combined market share in the market for retail construction materials (lower than 10%) would mitigate any possible concerns.

The Commissioner Rapporteur also pointed out that the consultants would not be competitors in the market for retail of construction materials at the municipal level. Thus, he concluded that the agreement submitted to CADE was not in breach of the law.

In view of the above, companies planning to implement any type of joint purchasing agreement must assess the economic justifications for the cooperation, the competitive risks involved, and the adoption of measures to mitigate them.

^[1] Buyers’ cartels restrain competition by means of a conduct between two or more companies who agree on how they will individually interact with common suppliers as to matters such as price, volume, and purchase terms and conditions.