Publications

: Category: Environmental

With increasing restrictions on the free movement of people and on the regular functioning of public agencies due to the covid-19 pandemic, most environmental agencies have taken steps to minimize the impacts of the virus on administrative proceedings.

There was an interruption in in-person services to the public, which led to suspension of deadlines for defenses and appeals, electronic processing of environmental licensing cases, and cancellation of any technical meetings. Although environmental oversight has not been officially suspended, there has been considerable impact on the activities of inspection agents.

At the Brazilian Institute for the Environment and Renewable Natural Resources (Ibama), a federal environmental agency, procedural deadlines have been suspended for an indefinite period of time and employees will have to work remotely. Even if the oversight activity is maintained, effective performance thereof requires a determination by Ibama's agents at each of its units.

In São Paulo, the Environmental Company of the State of São Paulo (Cetesb) temporarily cancelled service to the public, and ordered suspension of the procedural deadlines for 30 days, counting from March 16.

In Rio de Janeiro, the State Environmental Institute (Inea) also suspended in-person service between March 16 and 27, the same period for the suspension of appeal deadlines in administrative proceedings.

In Minas Gerais, the state government, through the State Environmental System (Sisema), suspended the deadlines for procedural acts carried out in environmental licensing, in environmental intervention, in grants for rights to use water resources and inspection, a decision which is valid through April 30 and applies to all authorized acts of the State Department of the Environment and Sustainable Development (Semad), the Minas Gerais Institute of Water Management (Igam), the State Forests Institute (IEF), and the State Foundation for the Environment (Feam).

The environmental agencies of the other states and municipal agencies have also been issuing rules for the suspension of services and deadlines, which should have a substantial impact on the progress of environmental licensing, authorization, and approval processes, as well as inspection activities as a whole.

: Category: Labor and employment

Executive Order No. 927/20 (MP 927), which sets forth labor measures to address the state of public emergency resulting from the covid-19 pandemic, establishes that cases of contamination by the coronavirus will not be considered occupational, unless a causal link between the disease and the performance of the work is proven.

In a similar situation, the Social Security Benefits Law (Law No. 8,213/91) already provided, in its article 20, paragraph 1, "d", that endemic disease is excluded, as a rule, from the concept of an occupational disease. The law considers a disease to be occupational only if it is proven that the contamination resulted from exposure or direct contact determined by the nature of the work.

Thus, the general rule of classifying cases of workers contaminated by the coronavirus as a non-occupational disease is reasonable and appropriate, especially since, in view of the pandemic declared by the World Health Organization (WHO), it is not possible to know when and where the worker was contaminated.

The exception provided for in MP 927 is the case of an employer who assumed the risk of contamination and acted negligently with the employee's health.

As an example, contamination of an employee urged to travel for work to a place that is notoriously the epicenter of covid-19 may be considered an occupational disease. The same cannot be understood in the situation of employees who travelled for work, before the declaration of a global pandemic, to countries where there were not many confirmed cases of contamination.

A causal link may also be established when it is proven that the employer failed to comply with the guidelines issued by the health authorities, such as in the event that the quarantine of employees who have returned from travel to countries classified as at a higher risk of transmission of the virus has not been implemented.

Also, a company's omission in adopting preventive measures and containment of contamination may be understood as a contributory cause of possible disease due to the coronavirus. For this reason, companies need to evaluate the risks and the indispensability of their presence at work, in addition to taking actions to preserve the health of their employees.

As the occupational disease has repercussions and effects on the employment contract, it is essential to establish the origin of the contamination by the coronavirus. The main implications of recognition of an occupational illness are suspension of the employment contract and recognition of the employee's provisional job security for a minimum period of 12 months, as per article 118 of Law No. 8,213/91.

In addition, demonstration of a causal or contributory causal link between the work and the illness acquired, resulting from an employer's action or omission, may give rise to the payment of civil compensation to the contaminated employee.

: Category: Labor and employment

Executive Order No. 927/20 (MP 927/20), enacted on March 22, provides for labor measures that may be adopted by employers to confront the state of public emergency decreed as a result of the covid-19 pandemic. In order to preserve jobs and reduce the negative economic impacts of the crisis, one of the alternatives presented in MP 927/20 is the creation of a special offsetting arrangement for work hours through an hours bank.

The adoption of this arrangement will allow employees to offset the time of interruption of their activities due to the decree of public emergency and quarantine when the work is resumed. The offsetting will be done via extension of the work day by up to two hours a day, subject to the daily limit of ten hours of work.

Companies interested in adopting the measure must establish an hours bank by means of an individual formal agreement with the employee or collective bargaining agreement, as already established in the Consolidated Labor Laws (CLT).

The great advantage of the measure is that the time limit for offsetting has been significantly increased. While the CLT provided that the offsetting resulting from the hours bank arrangement would have to be performed within up to six months in the case of an individual agreement, and within up to 12 months in the case of a collective agreement, MP 927/20 establishes a period of up to 18 months, counting from the end of the decree of the state of public emergency.

The proposal represents a change from the common idea of subsequent offsetting of prior work performed as overtime. In the hours bank established in MP 927/20, employees will have an initial negative balance, to be offset with overtime in the future.

For companies that already have an hours bank plan, it will be necessary to analyze the current terms on a case-by-case basis to determine whether the plan can be reconciled with MP 927/20 or whether there is a need to rework it.

By allowing more intense activity after the cessation of the state of public emergency, the adoption of the hours bank provided for in MP 927/20 may be a way out for the recovery of the sectors most affected by the work stoppage, such as retail, restaurants and services, and others whose activities are incompatible with teleworking.

With this measure, the expectation is that, after the end of the decree of the state of emergency, companies may recover the production gap and minimize the economic effects that will certainly be felt by all sectors of society.

: Category: Labor and employment

Executive Order No. 927 ("MP 927"), published on March 22, amended the laws and regulations governing the labor measures that may be adopted by employers to preserve employment and income and to confront the coronavirus (covid-19) while the state of public emergency remains in effect.

Labor measures may be entered into between employees and employers by written individual agreement, which shall control over other regulatory, legal, and business instruments, within the limits of the Federal Constitution (the "FC").

The main measures addressed by MP 927 are the following:

teleworking or remote work
acceleration of individual vacations
granting of collective vacation
enjoyment and acceleration of holidays
hours bank
suspension of employment contracts for employee training (President Jair Bolsonaro announced on his social networks that he revoked this measure, but the official revocation has not been published yet.)
suspension of administrative requirements in occupational safety and health
deferment of collection of the Guarantee Fund for Length of Service (FGTS)

The table below summarizes the main issues related to each of them.

In addition, MP 927 established that labor measures adopted by employers that do not contradict the provisions of MP 927, taken during the 30-day period prior to March 22, 2020, are considered valid.

Finally, MP 927 determined that the state of public emergency constitutes, for labor purposes, a case of force majeure according to article 501 of the Consolidated Labor Laws (the "CLT"), which, according to article 503 of the CLT, implies the possibility of a general reduction in salaries of employees, in proportion to the salaries of each one, but not exceeding 25%, subject, in any case, to the minimum wage of the region.

However, article 2 of MP 927 itself refers to the limits of the FC. In this context, we understand that the salary reduction (i) should be implemented through collective bargaining, since, according to article 7, VI, of the FC, a salary reduction will only be considered valid if negotiated with the professional union; and (ii) may exceed the limit of 25% established by article 503 of the CLT, due to the prevalence of what is negotiated over what is legislated, as established by the Labor Reform.

MP 927: LABOR MEASURES TO CONFRONT COVID-19
ALTERNATIVE	COMMENTS
Teleworking or Remote Work	It may be adopted by the employer, at its discretion, regardless of individual or collective bargaining agreement. It requires written or electronic notice at least 48 hours in advance. The rules on liability for the purchase and maintenance and for the supply of the equipment and infrastructure necessary and suitable and reimbursement of expenses must be provided for in a written contract signed in advance or within 30 days of the date of the change in work arrangement. If the employee does not have the equipment and infrastructure necessary to telework or work remotely: (i) the employer may provide the equipment on a free lease basis and pay for infrastructure services (which shall not be considered a salary payment); or (ii) if it is impossible to provide for a free lease arrangement, the period of normal work hours shall be computed as working time. The time of use of applications and communication programs outside the normal work hours of the employee does not constitute time on call, readiness, or notice arrangement, unless there is a provision in an individual or collective bargaining agreement. Regulations on telemarketing do not apply to workers on a teleworking or remote work arrangement. The employer may also adopt a teleworking or remote work arrangement for interns and apprentices. The employer may also mandate, at its discretion, return to the face-to-face working arrangement, upon 48 hours notice.
Acceleration of individual vacations	An employer may accelerate individual vacations upon giving at least 48 hours' written or electronic notice. Workers who belong to the coronavirus risk group should be prioritized for vacation. Holidays: (i) may not be taken for less than 5 consecutive days; and (ii) may be granted even if their accrual period has not elapsed (acceleration). The vacation pay may be paid by the 5th business day of the month following the start of the vacation. The employer may also choose to pay one third of the vacation after it is granted, by the date on which the 13th salary is due. The conversion of one third of vacation into bonuses will be subject to the agreement of the employer. In the event of dismissal of an employee, the employer shall pay, with the other severance payments, the vacation not yet paid. The employer may also negotiate with employees regarding acceleration of future vacation periods, per a written individual agreement. The employer may suspend unpaid vacation or leave for health care professionals or those performing essential functions, upon notifying the employee in writing or electronically, preferably 48 hours in advance.
Granting of collective vacation	The employer may, at its discretion, grant collective vacation upon notice to the affected employees at least 48 hours in advance. Prior reporting to the Ministry of the Economy and the professional unions is dispensed with. The maximum number of annual periods and the minimum number of days laid down in the CLT (2 annual periods of not less than 10 calendar days) shall not apply. Workers who belong to the coronavirus risk group should be prioritized for vacation.
Enjoyment and acceleration of holidays	The employer may accelerate the enjoyment of federal, state, district, and municipal non-religious holidays upon giving employees at least 48 hours' notice in writing or electronically, with an express indication of the holidays taken. Holidays may also be used to clear the balance in the time bank. The enjoyment of religious holidays will require the agreement of the employee, by written agreement.
Hours bank	The employer may interrupt its activities and set up a special time bank arrangement, by means of a collective or individual agreement, for offsetting within up to 18 months after the date of closure of the state of public emergency. Recovery time can be offset by extending the work day by up to two hours, not exceeding the daily limit of 10 hours.
Suspension of employment contracts for employee training	(President Jair Bolsonaro announced on his social networks that he revoked this measure, but the official revocation has not been published yet.) The employment contract may be suspended, for up to 4 months, for employees to participate in a not-in-person course or professional training program offered by the employer, directly or through training entities, with a duration equivalent to the contractual suspension. Suspension: (i) will not require a collective bargaining agreement; (ii) may be agreed upon individually with the employee or group of employees; and (iii) will be recorded on a physical or electronic work ledger. The employer may grant the employee monthly compensatory assistance, not of a salary nature, during the suspension period, with the value defined between employee and employer, individually. During the suspension, the employee will be entitled to the benefits voluntarily granted by the employer, which will not be included in the employment contract. If, during the suspension of the contract, the professional training course or program is not given or the employee continues working for the employer, the suspension will be undone and will subject the employer: (i) to the immediate payment of wages and social charges for the period; (ii) to the applicable penalties provided for in the laws and regulations in force; and (iii) to the penalties provided for in collective bargaining agreements. No training scholarship will be granted by the Government during the suspension period.
Suspension of administrative requirements in occupational safety and health	During the state of public emergency, the obligation to perform (i) occupational, clinical, and complementary medical exams is suspended, except for the exams upon discharge; and (ii) periodic and occasional training of current employees, provided for in regulatory rules on safety and health at work. Exams upon dismissal may also be waived if the most recent occupational medical examination was performed less than 180 days ago. The examinations suspended must be performed within 60 days after the end of the public disaster and the training must be done within 90 days. The current CIPA may be maintained until the end of the state of public disaster and ongoing electoral processes may be suspended.
Deferment of collection of the Guarantee Fund for Length of Service (FGTS)	The FGTS is suspended for March, April, and May of 2020, with maturity in April, May, and June of 2020. The collection of the amounts for March, April, and May of 2020 may be carried out, without the application of adjustment for inflation, penalties, and charges, within up to six monthly installments, due on the seventh day of each month, starting in July of 2020. In the event of termination of the employment contract, the suspension shall be terminated and the employer shall be obliged: (i) to pay the corresponding amounts, without the application of a penalty and charges, if it is done within the legal period established for performance thereof; and (ii) to deposit the amounts for the month of termination and the immediately preceding month, if they have not yet been paid.

MP 927 further established the following points:

Health establishments are allowed, per written individual agreement, even for hazardous activities and for twelve-hour work days with thirty-six hours of rest: (i) to extend the work day, in accordance with the provisions of article 61 of the CLT; and (ii) to adopt overtime shifts between the thirteenth and twenty-fourth hour of the break during the work day, without any administrative penalty, guaranteeing paid weekly rest in accordance with the provisions of article 67 of the CLT
During the 180-day period from March 22, 2020, the procedural deadlines for filing a defense and an appeal in administrative proceedings arising from labor infraction notices and FGTS debit notices are suspended
Cases of contamination with the coronavirus will not be considered occupational, except upon proof of a causal link
Collective bargaining agreements due or falling due, within 180 days, as of March 22, 2020, may be extended, at the employer's discretion, for a period of 90 days after the end of this period

We will continue to monitor the evolution of these topics and any potential developments.

: Category: Real estate

The State Court Judicial Review Boards are issuing guidelines for the provision of extrajudicial services, notary publics, and registry offices due to the covid-19 pandemic.

This movement stems from Recommendation No. 45, issued by the National Judicial Review Board (CNJ) on March 17, to guide local review boards to suspend or reduce the operation of their services temporarily and always with attention to the evolution of the disease in Brazil. In response, some review boards, especially in the locations most affected by the new coronavirus, have already altered the functioning of extrajudicial registries and notary offices.

We have compiled below the changes identified thus far:

São Paulo

The General Judiciary Review Board of the State of São Paulo issued its position through GC Ordinance No. 7/2020 and GC Communiqué No. 231/2020, of March 17.

According to its understanding, the extrajudicial services of notary publics and real estate registries are considered indispensable for the exercise of fundamental rights of citizens, including the circulation of property and obtaining of credit with collateral. For this reason, termination of such services shall not be authorized.

As a way to contain the spread of the disease, each office may choose to encourage teleworking or remote work of its employees and change their working hours, respecting the minimum limit of at least four hours per day of service to the public. Because of the changes, the new opening hours and the peak hours of people on site must be reported to citizens in advance (posted in the office itself or on its website).

For services where there is a reduction in the employees' working hours or shifts of more than 1/3 of professionals, it is established that the validity of the deadlines for filing of notarial acts will be counted in double, except in cases expressly provided for, namely:

birth and death records;
marriage procedures and licenses;
records of contracts covering real guarantees on real and personal property;
the purging of arrears in contracts in which real estate is provided as collateral and in those contracts subject to Law No. 6,766/79;
the offering of objections in land boundary rectification procedures, out-of-court adverse possession, recording of urban land parceling.

The measures mentioned in the ordinance shall be valid for 60 days.

General Judiciary Review Board Ordinance No. 7/2020 was regulated by Ordinance No. 8/2020, and CG Communiqué No. 240/2020, dated March 22, observing the quarantine established by State Decree No. 64,881, of March 22. This regulation established the possibility of suspending the operation of extrajudicial services in the state, and, in the event of suspension of activities, the running of deadlines will also be suspended.

However, there will be time on call, for a minimum period of two hours per day, either in person or virtually, still within the period of suspension of activities. The person responsible for the service should clarify to citizens the means by which the time on call will occur. For birth and death records, there will be remote time on call for at least four hours per day. The time on call may be in-person, virtually, or by other means of remote service, including electronic means of communication such as WhatsApp and Skype.

This arrangement is established as mandatory for services in which the responsible person, or his or her agents or staff, are infected by the coronavirus causing covid-19.

In addition, those responsible for the services may establish modules for the sending of documents via digital means during the period of suspension of activities; the interested parties must be physically present to present the document within 15 days from the end of suspension of the services.

Specifically for services in the municipality of São Paulo, according to Communiqué No. 1/2020 of the 1^st Public Registry Office of São Paulo, suspension of the activities of 18 real estate registry offices, 10 registry offices of deeds and documents and legal entities, and 10 notarial protest offices, was ordered (and not only authorized) on March 23 and 24, with in-person time on call dispensed with.

Rio de Janeiro

The state has allowed for a reduction in the functioning of extrajudicial registry offices, respecting a minimum operating time of four hours, according to Ordinance No. 20/2020 of the Rio de Janeiro Judicial Review Board, published on March 17.

Federal District

Similarly, the Federal District decided to maintain the activities of extrajudicial services, as decided by the Judicial Review Board of the Federal District and Territories on March 17.

Thus, the notary offices will also remain open. In order to avoid crowding, it was defined that real estate registry offices will only accept requests for the issuance of certificates of encumbrance and filings of public deeds for recording by electronic means. The fulfillment of any requirement may also occur via e-mail.

This same rule on issuing documents in digital format will apply to the issuance of second copies of marriage, death, and birth certificates by local notary offices.

Pernambuco

The state disciplined the issue on March 18, through Ordinance No. 08 of the Judicial Review Board, which establishes the normal functioning of the services, including the maintenance of its operating hours. Notary offices, however, should take measures to prevent the spread of the disease among citizens.

Santa Catarina

The decision rendered on March 18 by Judge Dinart Francisco Machado, in case 0013013-32.2020.8.24.0710, was to maintain the activity of extrajudicial registry offices, but to suspend deadlines for a period of 7 days.

Goiás

In Circular Letter 120/2020, of March 18, the state maintained extrajudicial services, but recommended that all acts be electronic. Filing of documents, by digital means, was authorized, according to the best convenience of the notary public or the registrar.

Notary offices with suspended activities

Other states have temporarily closed notary services. This is the case of Rio Grande do Sul, which, through Act No. 09/2020 of its Judicial Review Board, ordered the closure of all services until March 31. Minas Gerais, via Joint Ordinance 950, published on March 18, mandated that in-person services in the state be suspended until March 27.

Explanatory table

To facilitate reference, we have summarized below the guidelines on extrajudicial services in each state:

State	Situation of notary offices
Federal District	Reduced operation - part of acts will be done only digitally
Goiás	Normal operation - some acts may be done digitally
Minas Gerais	Closed
Pernambuco	Normal operation
Rio de Janeiro	Operation with reduced hours of operation
Rio Grande do Sul	Closed
Santa Catarina	Operating with time limits suspended for 7 days
São Paulo	Suspension of normal working hours may be authorized through the establishment of on-call or virtual services; time limits may be suspended during the suspension of normal hours of operation

: Category: Competition

A recent discussion held by the Administrative Council for Economic Defense (CADE) has raised questions about the criteria applicable when calculating the turnover of an economic group of investment funds, an exercise necessary to evaluate the need to submit mergers involving funds to the agency's scrutiny.

CADE’s rule (Resolution No. 2/12, amended in 2014) provides that, for this purpose, members of the economic group of an investment fund are considered to be the group of each quotaholder that holds a stake equal to or greater than 50% of the quotas of the fund (individually or per a quotaholders' agreement), the companies controlled by the fund, and the companies in which this fund directly or indirectly holds a stake equal to or greater than 20% of the total or voting capital.

In the present case, the investor fund, managed by Tarpon Gestora de Recursos S.A., asked CADE's General Superintendence to recognize that submission of the transaction was mandatory on the grounds that the manager should be seen as a member of its economic group, because it had autonomy and control over its investments.

In its decision, the General Superintendence chose to consider the manager to be a member of the fund’s group. However, it made reference to the fact that, originally, Resolution No. 2/2012 considered the manager to be a member of the fund's group for the purpose of calculating turnover, but when reviewing this rule in 2014, CADE opted to limit the group to the quotaholders with a substantial percentage of the quotas and to the fund's portfolio companies, even knowing the role exercised by the manager. It also mentioned that recent judgements by CADE have confirmed the understanding that the applicable rule disregards fund managers. It stressed, finally, that in that specific case the manager was considered a part of the group of the purchasing fund under a conservative approach, especially because of the repeated statement that the fund is under its control.

In short, although the decision of the General Superintendence did not expressly mention the exceptional nature of the understanding adopted, its content would authorize such conclusion.

This conclusion was reinforced in light of the discussions held during the trial session of CADE’s Tribunal held on March 4 of this year. On that occasion, one of its members submitted a proposal for review of the General Superintendence decision on the ground that the tribunal should deal with the issue of defining an economic group of investment funds in a more precise and definitive manner, given the possibility that such decision might give rise to legal uncertainty in future cases. The proposal was rejected because the perception prevailed among the members of the tribunal that the General Superintendence had not adopted an interpretation contrary to the current text of Resolution No. 2/12, nor one that generated legal uncertainty. Finally, CADE’s chairman suggested the formation of a working group to discuss the possibility of revising the standard in question.

Therefore, until the rule is amended or CADE perchance adopts a non-literal interpretation of its provisions in repeated decisions, a scenario that at this moment seems unlikely, it is not necessary to take into account the manager when calculating the turnover of an investment fund's group.