Publications

Category: Labor and employment

The world has seen, in recent days, a global escalation of the coronavirus beyond the borders of China and Italy. A few days ago, the World Health Organization (WHO) declared Covid-19, a disease caused by the virus, to be pandemic, and stated that the number of patients infected, deaths, and countries affected is expected to increase throughout the month of March.

As of the preparation of this article, cases of coronavirus were registered in 114 countries, with a lethality of 3.4%. The pandemic impacts production, raises fears of a global recession, damages the economy, and interrupts the production of goods and the supply of services across the globe. Among all the impacts of the coronavirus, those caused in labor relations are silent and can affect the daily lives of thousands of companies and employees.

In Brazil, the federal government passed Law No. 13,979/20, regulated by Ordinance No. 356/20, which establishes control measures to combat the new virus. The law defines the concepts of isolation, removal of persons whose illness has been confirmed,[1] and quarantine, removal of persons with suspicion of contamination,[2] and governs, in its article 3, paragraph 3, the labor consequences of quarantines and/or isolation.

The program in question considers absences from public service or private work activities to be "justified absences" during the period in which the affected employee is on leave, under quarantine, or in isolation. However, as the law does not specify the impact of such justified absences on employment contracts, it is necessary to analyze the related laws in order to understand it.

From what is known so far, when infection with the coronavirus is confirmed, the estimate is that the patient needs more than 15 days for a full recovery and return to work, considering the incubation period of the virus of up to 12 days, approximately, and the time for manifestation of the disease.

Thus, if an employee is away from work activities for more than 15 days, such employee must be referred to the INSS, to start receiving sick pay, as provided for in article 59 of Law No. 8,213/91. It is important to point out that during the first 15 days of leave, the employment contract is interrupted; starting on the 16th day, the contract is suspended.

This means that during the first 15 days, employees stop providing services to the employer, but continue to receive their remuneration. This period counts as effective provision of services for all legal purposes. It is only a partial suspension of services.

As of the 16th day, the employee must be put on leave with the INSS, and the employer is no longer required to pay wages. In addition, this period of leave will not count as time of service for labor and social security purposes.

In this arrangement, there is the understanding of suspension of contract, since, temporarily, there will be stoppage in the provision of services and, therefore, termination of the employer's obligations and of any effect of the contract while the suspension of the contract lasts.

However, it should be noted that even during the period of suspension of the employment contract, the employer must maintain the health plan regularly granted to the employee.

Based on the law, therefore, isolation and/or quarantine periods due to contamination of the employee by the coronavirus have the same impact as justified absences presented today, that is, they interrupt the employment contract until the 15th day and, from the 16th day onwards, they suspend the contractual relationship maintained between the employer and the employee, regardless of the isolation or quarantine period.

[1] According to article 2, I, of Law No. 13,979/2020, isolation means separation of sick or contaminated persons, or of baggage, means of transport, goods, or postal parcels affected, from others, in order to avoid infection or spreading of the coronavirus.

[2] According to article 2, I, of Law No. 13,979/2020, quarantine means restriction of activities or separation of persons suspected of contamination from persons who are not ill, or from luggage, containers, animals, means of transport or goods suspected of contamination, in order to avoid potential infection or spreading of the coronavirus.

Category: Litigation

Recent changes in the Expression of Interest Procedure (PMI) should encourage private agents to cooperate with the Federal Public Administration in modeling partnerships and bidding procedures. The new rules were established by Decree No. 10,104/19 in November of last year.

The PMI is the instrument commonly adopted by the Federal Public Administration to seek out private partners in the preparation of surveys, investigations, and technical studies necessary to structure projects, concessions, and bids in general. Through it, a public call is conducted in order to seek out individuals and companies interested in technically supporting the structuring of public bidding projects.

If the material produced is effectively used in the preparation of the bid notice for the public tender to which the studies refer, the private party will be reimbursed for the consulting services provided, under the terms of the call for bids notice and the respective draft contract. These documents shall require the winner of the bidding procedure to reimburse the private party directly, in whole or in part, for expenses incurred in performing the consulting.

Decree No. 10,104/19 amended Decree No. 8,428/15, which regulates the procedure. The text is the result of a proposal prepared by the Special Bureau of the Investment Partnership Program of the President’s Chief of Staff and brought in innovations that make PMI more advantageous in the eyes of the Public Administration and private parties.

It is worth highlighting the expansion of the scope of the PMI, under the terms of article 1 of Decree No. 8,428/15. Previously, the PMI could only be used in "enterprises that are subject to a concession or permission for public services, a public-private partnership, the leasing of public assets, or the granting of a real property right." The new wording also includes the structuring of "company privatization and partnership contracts, in accordance with the provisions of paragraph 2 of article 1 of Law No. 13,334, of September 13, 2016.”^[1]

Partnership agreements are all those agreements related to "common concession, sponsored concession, administrative concession, concession governed by sector legislation, public service permission, leasing of public property, concession of real property right, and other public-private businesses that, due to their strategic nature and their complexity, specificity, volume of investments, long term, risks, or uncertainties involved, adopt a similar legal structure."

The possibility of using the PMI for processes for privatization of mixed economy companies and public enterprises goes in the same direction as recent government initiatives to foster the privatization of public assets and services.

Two other relevant changes:

• The selection process for the partner responsible for the studies may precede the authorization phase for the presentation of projects, surveys, investigations, or studies (article 1, paragraph 5).
• Authorization to submit projects may be granted with exclusivity or to a limited number of interested parties (article 6, I).

With regard to the anticipated selection and restricted number of interested parties, a provision allows the public call for bid notice of the PMI to establish as evaluation and study selection criteria, in an alternative or cumulative manner: (i) professional experience, (ii) the work plan, and (iii) preliminary assessments on the venture (article 10, sole paragraph).

Also as a relevant innovation, the decree revokes the previous provision that provided for supplementary compensation to private parties in the event of a need for corrections and changes in the studies (paragraph 6 of article 15 of Decree No. 8,428/15). This acts as an incentive for the final value provided for in the call notice to take into account any need for adjustments and changes. In addition to minimizing the risk of future financial discussions holding up the project, the measure contributes to lowering the cost of the bidding process as a whole.

Admittedly, the changes brought about by Decree No. 10,104/19 increase the scope of action and effectiveness of the PMI, on the one hand, and reduce expenses with projects prepared and unused, on the other. This normative change in the PMI accompanies the new trend of bidding procedures, provided for in the bill (PL 1,295/95)^[2] that intends to substantially amend Law No. 8,666/93. These are changes that promise to give greater efficiency and legal certainty to the execution of public contracts for the construction of more effective bidding models and improvement of infrastructure projects in Brazil.

^[1] Law which instituted the Investment Partnership Program (PPI), aimed at expanding and strengthening interaction between the public power and private initiative.

^[2] PL 1,295/1995. https://www.camara.leg.br/proposicoesWeb/fichadetramitacao?idProposicao=16526.

Category: Labor and employment

The deliberations and voting on the report of Executive Order (MP) No. 905/2019, scheduled for Tuesday, March 3, have motivated various discussions on the subject, especially in public hearings scheduled for this purpose.

MP 905/2019 instituted the Green and Yellow Employment Contract with the main objective of relieving the payroll charges of workers aged 18 to 29 seeking their first job with a CTPS registration.

The Brazilian Congress has already set up a joint committee to consider MP 905/2019, composed of deputies and senators, under the chairmanship of Senator Sérgio Petecão (Social Democratic Party), vice-chairman Lucas Vergilio (Liberal Party), and rapporteur Christino Aureo (Progressive Party).

The opinion of deputy Christino Aureo was already discussed at the deliberative meeting held on February 19, but the vote was postponed after a group request from the joint committee to evaluate the terms of the text.

After the report is approved by the joint committee, the bill for conversion into law will be sent to the Chamber of Deputies, and, once approved, will proceed to the Federal Senate. If approved with modifications, the text will be returned to the Chamber of Deputies for consideration, where the amendments promoted by the Federal Senate will be accepted or rejected. The matter will then be referred for sanctioning (if the conversion bill is approved) or promulgation (if the original text of the MP is approved) by the Brazilian President’s Office.

The report suggests changing hiring by the Green and Yellow Employment Contract system, including in the list of beneficiary workers aged 55 and over who have not had a formal employment contract for more than 12 months, under the same conditions thought up for the hiring of younger workers, that is, with exemption from payroll charges and the possibility of hiring for a fixed term.

It was also suggested that the applicable rate for calculating the number of contracts authorized by the Green and Yellow Employment Contract modality be increased, from 20% to 25%, precisely in order to increase the number of potential beneficiaries.

Christino Aureo's proposal as rapporteur aims to allow work on Sundays under the justification that, for various sectors of the economy, Sunday is the day with the highest turnover and, therefore, represents the best earning opportunity for employees. The situation is different as regards the possibility of opening bank branches on Saturdays, limited to places and services which do not pose a risk to public safety, in accordance with the terms of the proposal.

In labor matters, the report submitted to the Brazilian Congress for a vote also intends to support the indexation of interest to the savings account rate and adjustment for inflation to the IPCA-E rate, when calculating the updated labor debt.

In relation to profit sharing and results, the proposal does not accept the intention of MP 905/19 to remove union representative from the joint bargaining committee, on the argument that this measure would devalue labor unions and the role of collective autonomy of wills in labor law. However, the report proposed a deadline for the labor union to take up its negotiating position through its representative.

The report also proposes some amendments to the original text of MP 905/19 in relation to bank employees' working hours, although it maintained the possibility of offsetting between the bonus for function and overtime for the 7th and 8th hours worked, in the event of a judicial decision that rules that the bank employees’ position is not a position of trust.

The new labor oversight mechanisms were maintained by the report, including the equivalence of consent orders signed by labor inspectors, under the Executive Branch, to consent decrees (TAC) negotiated by federal prosecutors.

The conversion bill is expected to be voted on by the Joint Committee and forwarded for approval by the Brazilian Congress. The text must necessarily be approved by April 20, 2020; otherwise, it will lose its effectiveness.

The prospect of converting MP 905/2019 into ordinary law, albeit with several proposals for amendment, will have a significant impact on labor law, which is why it will once again require companies to adapt to the new guidelines, including in relation to procedures, contracts, and internal policies.

Category: Labor and employment

It is an increasingly common trend at companies to create areas of innovation to stimulate the creativity of employees and reinvent the business model, in relation to both internal processes and flows and products and services.

This initiative requires caution from a legal point of view in order for there to be no illegality or questioning of what is truly legitimate to explore a certain idea or innovation, especially since ideas, because they are generic in nature, are not susceptible to protection from the National Institute of Industrial Property (INPI).

According to the labor laws and regulations, employees' inventions, when arising from their personal contribution and employer resources, will be common property, in equal parts, unless the purpose of the employment contract is scientific research.

The current context of proliferation of innovation areas at companies generates many doubts on the subject. For example, who could explore the idea or invention developed by a certain employee, encouraged by the company's internal policies, to optimize the business model adopted thus far or establish new areas for investment.

The labor law expressly mentions only two situations involving employee inventions: (i) those arising from their personal contribution and the use of employer resources; and (ii) those related to the very purpose of the employment contract.

In order to avoid problems concerning the right to explore a particular idea or invention, it is important to observe the specific laws on the matter, as well as disseminate the rules defined in a specific internal policy.

According to article 91 of Law No. 9,279/96, when the ownership of an invention or utility model results from an employee's personal contribution and from employer resources, an exclusive right of license for exploitation may be granted to the employer, provided that the employee is assured "fair remuneration."

The term "fair remuneration" has no objective legal definition, which is why the amount to be fixed in order for the company to become the real owner of the invention or utility model must consider the potential for exploitation of the employee's creation. The objective is to prevent the organization from being subject to litigation administratively or judicially for misuse in the future.

The case law is not settled on the matter, since "fair remuneration" may vary from a fixed amount per technique implemented, for example, to a percentage of the economic result obtained with the exploitation of the utility model. It is important that all these variables are considered in the company's innovation strategy, including for the implementation of its own internal policy.

Another issue that may be raised in such situations is the possibility that a company may find originality in an idea or invention and, depending on the result, penalize or dismiss a given employee for cause. The lack of protection of mere ideas by the INPI makes confirmation of such confirmation impossible, which can be done, however, in the case of a product or a computer program, for example.

All these precautions also apply to cases of open innovation, which involve the acquisition of fintechs and startups by companies wishing to expand their business model, as the purchaser will absorb the employees of the fintechs and startups and submit them to its own working conditions, including its internal policies.

Among the precautions necessary, it is suggested that the creation of innovation areas at companies be accompanied by express rules in a contract, including after the actual licensing of the right of exploitation by the employer, if any, as well as in an internal policy that will be observed for this purpose.

As the creation of innovation areas at companies and the takeover of fintechs and startups becomes more and more common, it is necessary to adopt labor precautions in order to avoid disputes and even loss of the right to exploit these innovations in the future, which, most of the time, may go unnoticed by companies and not be provided for in internal policies.

Category: Infrastructure and energy

Resolution No. 806/2020 of the ANP (National Agency of Petroleum, Natural Gas and Biofuels) establishes new procedures for the control and reduction of flaring and losses of oil and natural gas in exploration and production (E&P) activities.

The new regulation replaces ANP Ordinance No. 249, which has been in effect since 2000 and is therefore out of date vis-à-vis the operational reality of natural gas flaring in Brazil in a highly technological field such as the petroleum industry. For this very reason, the ANP had already been adopting complementary norms in response to the constant challenges in the sector. Since 2002, the ANP has signed consent orders with the operators of the fields responsible for the largest volumes of natural gas flaring in order to define targets for use of the input and associated plans for reducing flaring volumes.

The recent changes regarding natural gas in the national and international scenario have significantly contributed to the ANP's revision of this ordinance, which were obviously outdated.

Internationally, natural gas has been seen for years as an oil by-product. Its low sales value, coupled with the complex logistics of disposal, discouraged producers from monetizing it. However, as a fossil fuel with very low carbon emissions, natural gas has recently gained prominence in the transition to a renewable energy grid and in the reduction of greenhouse gases.

In Brazil, the product began to gain protagonism for a number of factors, such as the discovery of pre-salt deposits with large gas reserves, its growing use as a raw material in thermoelectric power generation (especially as of 2013, with the worsening of the water crisis and the impact on hydroelectric energy generation), Petrobras' decision to leave the activities of the natural gas exploration chain, the interest of market agents in the sector, Brazil's ratification of the Paris Agreement, and the CNPE Resolutions[1], which expressly mentioned the need to reduce natural gas flaring in E&P activities.

In this context, the ANP inserted in its regulatory agenda the revision of the regulations applicable to natural gas flaring and started to collect contributions from regulated agents. The result was the new resolution published this year, among which the following points are highlighted:

• The ANP shall annually approve the forecasts for flaring and associated natural gas losses, together with the Annual Production Programs (PAP) approvals and define the quantities that shall not be subject to the payment of royalties;

• The volumes of flaring and losses of natural gas are not subject to the payment of royalties for reasons of security and/or proven operational necessity;

• The flaring or loss of non-associated natural gas and the flaring of oil are prohibited;

• The limits for ordinary flaring have been redefined;

• The flaring or loss of non-associated natural gas may exceptionally be authorized for safety, emergency, testing, or well cleaning reasons; and

• The flaring of oil may exceptionally be authorized for emergency reasons or in well tests with a total free flow time of up to 72 hours.

Resolution 806 also establishes that operators of the activities covered by the standard will have 180 days, as of its publication on January 17, 2020, to implement the necessary adjustments related to maritime production units and fully comply with the provisions contained therein.

At a moment when companies are currently pulling off their process of adaptation to the new design of the sector that is being revealed in Brazil, it is essential to eliminate regulatory gaps such as this. In this sense, the ANP has demonstrated its commitment to the development of the Brazilian oil and natural gas industry.

[1] CNPE Resolution No. 17/2017 and CNPE Resolution No. 16/2019.

Category: Labor and employment

Prejudices and systematic practices of discrimination against people with disabilities in the work environment have motivated international bodies such as the International Labour Organization (ILO) to have this problem covered in their conventions and recommendations.

This is the case of ILO Convention No. 111, promulgated by Decree 62.150/68, concerning discrimination in employment and occupation. This standard encourages the adoption of affirmative action policies, with the cooperation of employers' and workers' organizations and other appropriate bodies as the main instrument. The aim is to promote equal opportunities and equal treatment in employment and occupation by methods appropriate to national circumstances and customs.

In Brazil, the legislator established affirmative action in article 93 of Law No. 8,213/91, providing that companies with one hundred or more employees are obliged to fill from 2% to 5% of their positions with rehabilitated workers or qualified persons with disabilities. It is further established that the unjustified dismissal of these employees may only occur after the hiring of a substitute in a similar condition.

This state protection has limited the employer's power to dismiss without cause employees who are within the legal quota. In order for a discriminatory act not to be presumed or found, employers must be doubly cautious when they need to dismiss an employee with a disability.

According to the prevailing case law of the Superior Labor Court (TST), "the dismissal of a rehabilitated worker or of a disabled worker, without cause, in employment for an indefinite term, may only occur after the hiring of a substitute in a similar condition, with dismissal without just cause being void when the legal requirement is not observed." In other words, according to the majority opinion of the Superior Court, termination of employees hired under article 93 of Law No. 8,213/91, outside the conditions set forth therein, may result in their reinstatement into the post until the requirement imposed by law is met. This reinstatement is considered a provisional guarantee of employment.

The nullity of the termination with reinstatement of the employee to the functions previously performed is not considered job stability, but a guarantee of employment until the employer fulfills the legal requirement to replace the disabled person under the same conditions and with the same level of adaptations.

Doubts arise, however, about the meaning of the expression "substitute in similar condition." Can the legal obligation of substitution be satisfied only if the replacement employee has a disability of the same type and grade as the employee being replaced?

According to this interpretation, the dismissal of an employee using a wheelchair, for example, could be considered discriminatory if the replacement was a worker with a slight disability, to the detriment of maintaining the employment of the one who evidently has less chance of obtaining and keeping a job, since it does not require greater adaptations in the working environment.

The 6th Panel of the TST positioned itself in interpreting the provision in Appeal for Review RR-779-16.2012.5.03.0069. In the case in question, the trial labor court, as well as the Regional Labor Appeals Court (TRT), adopted the understanding that the replacement should be for a person with the same type of disability, ordering reinstatement of the former employee who had been dismissed. However, as the 6th Panel decided, the legal standard does not make any distinction, but only requires the hiring of employees under the same conditions - "person with disability", and not a person who has the same disability. The employer was absolved of the reinstatement and judgment by the trial and regional appeals court.

Another issue that generates discussion on the issue of quota compliance: may a company that exceeds the required percentage dismiss a disabled employee or must it follow the rule imposed by article 93, paragraph 1, of Law No. 8,213/91, according to which dismissal of a rehabilitated worker or of a qualified disabled person at the end of a fixed-term employment contract for a determined period of more than 90 days and the dismissal without cause, in the contract for an indefinite period, only occur after the hiring of a substitute with a similar condition?

The law is not clear on whether such a prohibition should be applied in all cases or only when the company does not meet the legal minimum quota, a fact that has led to many judicial disputes. For years the labor courts have taken the position that the prohibition should be applied in all cases, even when the employer already had the minimum number of disabled persons required by law. The argument was that the intention of the law is the social and professional integration of these people, regardless of whether or not quotas are met.

However, in mid-2017, the TST's Individual Disputes Section I issued a decision in case No. 0010740-12.2005.5.17.0012 recognizing that there is no legal impediment to dismissal of a disabled employee, even without the hiring of a substitute, when the company maintains in its workforce a percentage of employees in this condition above that stipulated in article 93 of Law No. 8,213/91 (minimum quota).

After this decision, the courts have increasingly found that the prohibition of paragraph 1 of article 93 should only be applied when the employer does not comply with the minimum legal quota, although there is still a lot of controversy on the subject.

Faced with legal controversies, the federal government, through the Bureau of Labor Affairs, issued a question and answer booklet to inform and guide employers, employees, and the public in general about affirmative action and to ensure social inclusion and compliance with the rules prohibiting discrimination in labor relations.

If discriminatory practice is proven, the Bureau of Labor Affairs may assess the company with an infraction notice, under penalty of administrative liability, according to article 628 of the Consolidated Labor Laws (CLT).

Also as an affirmative action, the federal government, through Executive Order (MP) 905/2019 (article 19), instituted the Program for Physical and Professional Qualification and Rehabilitation, Prevention and Reduction of Accidents in the Workplace, with the purpose of financing the professional qualification and rehabilitation service provided by the INSS.

There are, therefore, actions by the Brazilian government and the intense internalization of international standards with the purpose of eliminating discriminatory practices against people with disabilities in the work environment, either by adhering to the rules of the conventions and their recommendations, or by promulgating laws and affirmative actions. In this context, employers should adjust their practices and policies to the provisions of law, case law, and international recommendations, implementing affirmative action to eradicate discrimination in the workplace and prevent lawsuits.