Salary reduction program and suspension of employment contracts comes to an end this Wednesday; see how the workers are | Contests and Employment

The so-called Emergency Employment and Income Preservation Benefit (BEm), which was relaunched at the end of April, ends this Wednesday (25). Thus, companies must terminate the agreements made with employees, whether to reduce working hours and wages or suspension of contracts.

According to labor lawyers, companies will have to return to the normal journey from this Thursday (26), unless the program is extended by the federal government.

On August 10, the Chamber of Deputies approved the basic text of a provisional measure that institutes a new round of the program to reduce working hours and wages or suspend employment contracts during the pandemic.

Deputies will still have to analyze the so-called “highlights”, specific suggestions for changing the text, which include changes in the Consolidation of Labor Laws (CLT). For this reason, the MP is being called a mini-labour reform. There is no date for this new vote. Then, the proposal is sent to the Senate for analysis.

Chamber includes 'mini-labour reform' in pandemic MP;  understand the proposals

Chamber includes ‘mini-labour reform’ in pandemic MP; understand the proposals

The provisional measure is valid from the moment it is published in the Official Gazette of the Union (DOU) and needs to be approved by the plenary of the Chamber and Senate to become definitive law.

“Under the labor law, the suspension or reduction of working hours and wages are not allowed, but they were authorized due to an exceptional situation created by the pandemic and the state of calamity”, explains Daniel Moreno, partner at Magalhães & Moreno Advogados.

He highlights that employees who had their contract suspended or salary reduced are entitled to job stability for the same period in which they had their contract suspended or salary reduction – unless they are fired for cause.

Danilo Pieri Pereira, a specialist in Labor Law and Procedure and a partner at Baraldi Mélega Advogados, gives an example with a worker who had his contract suspended for 60 days: in this case, he had the right to remain in the job during this period and will have another 60 days after the re-establishment of the contractual relationship. If there is a reduction in working hours for 3 months, the worker is entitled to remain in the company for another 3 months.

According to Ricardo Pereira de Freitas Guimarães, doctor and master in Labor Law and professor of postgraduate studies at PUC-SP, the employer who dismisses the employee without just cause during the period of temporary stability will be liable for compensation ranging from 50% to 100 % of salary, depending on the case:

  • 50% of the salary to which the employee would be entitled in the period of temporary employment guarantee, in the event of a reduction in working hours and salary equal to or greater than 25% and less than 50%;
  • 75% of the salary to which the employee would be entitled during the period of temporary employment guarantee, in the event of a reduction in working hours and salary equal to or greater than 50% and less than 70%;
  • 100% of the salary to which the employee would be entitled during the period of temporary employment guarantee, in the event of a reduction in working hours and salary by a percentage higher than 70% or of temporary suspension of the employment contract.

Workers who haven’t made these deals can usually be fired, notes Moreno.

According to the lawyer and professor of Labor Law, Fernando de Almeida Prado, a partner at BFAP Advogados, after the period of temporary stability, companies that decide to dismiss employees must pay the severance and indemnity amounts normally, with the same amounts provided. before joining the government program (prior notice, FGTS fine, overdue vacations, proportional 13, 40% FGTS fine).

Prado emphasizes that the Constitution requires a collective agreement to reduce working hours and wages.

Employees should return to normal working hours and wages. It is possible that there will be a reduction in the wage journey through collective agreements, with authorization from the company and union, even if the federal government does not provide any emergency aid”, he says.

If the company decides to keep the contracts with reduced hours or suspended after the deadline, Pereira recommends that employees seek clarification from the employer to resolve any impasses. “If there is no success, the worker can always go to the Labor Court in order to obtain the reparations he deems appropriate”, he says.

“We do not believe in the hypothesis that the company insists on maintaining the chances of suspension or reduction after the end of the period, under penalty of contravening the legislation, and may suffer administrative and judicial consequences, either by the actions of the Public Ministry of Labor, tax auditors, unions or even individual actions”, says Ricardo Pereira de Freitas Guimarães.

“After the 25th of August, the normal working hours or the employment contract must be resumed within 2 days, in the manner prior to the pandemic signed between the parties”, he says.

How are payments during the program?

In the case of suspended contracts, salaries are covered by the federal government up to the limit of the unemployment insurance ceiling (R$1,911.84) for employees of companies with gross income of up to R$4.8 million. On the other hand, those who had their work hours reduced receive the company’s proportional salary and a supplement related to a part of the unemployment insurance amount.

  • FGTS, INSS, vacation and 13th: what changes with the reduction of working hours and suspension of employment contracts

In both cases, workers are entitled to tenure for a period equivalent to suspension or reduction.

  • Suspension of employment contract: receives 100% of the unemployment insurance installment, which can range from R$1,100 to R$1,911.84 (except in the case of employees of a company with gross income exceeding R$4.8 million – in this case case: receives 30% of salary + 70% of unemployment insurance installment)
  • 25% reduction in working hours: receive 75% of salary + 25% of unemployment insurance installment
  • 50% reduction in working hours: 50% of the salary + 50% of the unemployment insurance installment
  • 70% reduction in working hours: receives 30% of salary + 70% of unemployment insurance installment
  • No worker should earn less than minimum wage
  • There is no change in the grant or in the amount of unemployment insurance if the worker is dismissed in the future. Thus, nothing changes in the rules for applying for unemployment insurance.

Number of workers in the program

The government estimate was to preserve 10 million jobs with the program last year. Balance sheet showed that the BEm reached 9.8 million workers.

Almost half of the agreements signed included the suspension of employment contracts. The service sector, the most affected by the pandemic, accounted for more than half of the agreements signed.

This year, between April and June, 2.55 million workers entered the job preservation program, formalizing a total of 3.07 million agreements – 1.3 million for contract suspension (42.2%) and 1 .77 million for workload reduction (57.8%).

The Services sector accounted for 50.3% of the agreements, followed by Trade (24.62%) and Industry (22.26%).