The Declaration of Rights of Economic Freedom and its labor impacts

In the last month of September, Federal Law nº. 13.874/19, which establishes the Declaration of Rights of Economic Freedom, resulting from the conversion of Provisional Measure (MP) no. 881/2019.

This law was also known as “Mini Labor Reform”, due to the changes brought about in the CLT, aiming especially at reducing bureaucracy and boosting the activity of companies, as employers.

Let’s look at the main changes:

Digital CTPS: the physical work card will be replaced by the digital card, which, by the way, took a long time to happen. In an increasingly computerized world, in which the Union, through the Federal Revenue of Brazil, Bacen, and the moribund eSocial, has access to our most important data, it makes no sense to oblige a worker to carry a block of papers with him with old and often illegible information.

The information will be maintained electronically, through e-Social and the system that replaces it. However, it is recommended that employment contracts currently registered in the physical CTPS also have their closure noted on the physical medium.

Use of the CPF as identification of the worker: for the same reasons mentioned above, the use of the CPF, which is a unique identification number for the citizen, currently conferred from birth, makes the control of information even more agile and easier for the employer and the Government Public.

Mandatory shift control: formerly provided for when the company had 10 or more workers, today the mandatory control is attributed to companies with 20 or more employees.

Pre-resignation of the rest period: prior notice of the rest period is expressly permitted. That is, the company may exempt the employee from signing the exit for the rest and meal break and his return.

Point by exception: the law now provides for the possibility that the worker only records the point in exceptional situations, such as delays or overtime, which was already provided for in some collective agreements. But you need to be very careful: to adopt such a practice, you need a written individual agreement, collective agreement or collective bargaining agreement. Although we understand that, in principle, the law grants greater autonomy (and consequently more responsibility) to the employee, the burden of proving the employee’s working hours, including the aforementioned rest period, must remain with the employer. Therefore, the company must ensure that the record is always in line with reality and ensure that overtime only occurs when really necessary.

Extinction of eSocial: the Law provides that eSocial should be replaced by a “simplified digital bookkeeping system for social security obligations”, which had not yet been defined at the time of writing this article.

Stricter rules for disregarding legal personality: Although this change does not reach the CLT, but the Civil Code, this is one of the most sensitive issues related to Labor Law for entrepreneurs in Brazil. The law provides that the mere existence of an economic group does not authorize the disregard of legal personality, which can only occur when there is abuse of legal personality, which is characterized by confusion of assets or misuse of purpose. Such a prediction, by the way, was already included in the Civil Code, but now we have the definition of what is confusion of assets and misuse of purpose.

It is also foreseen that the disregard can only reach the administrators and the partners that directly or indirectly have benefited from the abuse.

At this point, one cannot fail to mention that the CLT provides that companies forming the same economic group may be jointly and severally liable for labor debts. In any case, according to the CLT rule, only the companies forming the economic group could be held responsible and, in order to reach the equity of the partners, it is necessary to verify the requirements explained in the previous paragraph so that the company’s legal personality is disregarded.

These main changes demonstrate the legislator’s intention to modernize legislation and labor relations, bringing a little more legal security to investors and entrepreneurs, thus generating more wealth for Brazil.

Author: Roberta Valiatti Ferreira (Lawyer, partner at Lima e Valiatti Advogados, which specializes in the legal structuring of businesses in Portugal. Specialist in Business Law from FDV and Master in Legal and Private Sciences from the University of Porto – Portugal). – roberta@limaevaliatti.com