Reform encourages hiring young people and economic recovery, says entity – 08/31/2021

The proposal for a new labor reform, approved in the Chamber and awaiting a vote in the Senate, will help generate jobs because it encourages the hiring of young people, with a reduction in costs for companies. This statement is made by the president of Abrasel (Brazilian Association of Bars and Restaurants), Paulo Solmucci, in an interview with UOL.

According to Solmucci, the economic crisis resulting from the pandemic requires creative solutions to help companies and workers in the recovery process. According to him, the new hiring modalities are important to guarantee employment for those most in need.

We have 37% of companies with their doors open, but operating at a loss. Any cost savings are important. Hiring this young person who has no qualifications means that there will be lower productivity at work in the first few months. Considering that every dollar saved makes a difference, this is important. But the most important thing is that this employment contract has a maximum term of two years. Afterwards, this worker will move to the CLT labor regime, with all labor rights
Paulo Solmucci, President of Abrasel

Read the main excerpts from the interview below:

UOL – Will provisional measure 1,045, approved by the Chamber and proposing a new labor reform, really generate jobs?

Paulo Solmucci – The proposal needs to be divided into two equally positive parts. In the first, it makes the program that reduces working hours and wages permanent. A survey carried out by our sector shows that 52% of bars and restaurants consider it important to renew this program.

Considering the hypothesis that the program will not be renewed is bad for the sector. If the program is not extended, we estimate that five out of ten companies in the sector will need to lay off 20% of their employees.

Data show that 54% of companies are in arrears with debt, and 16% are unable to pay wages on time.

And the creation of new hiring modalities for young people?

The bar and restaurant sector is the one that generates the most openings for first jobs in Brazil. From March 2020 to April 2021, the sector laid off 1.3 million workers.

Starting in April, we noticed an improvement. We hope to hire 600 thousand people by the end of the year. And we have already noticed difficulties in hiring qualified labor, which migrated to other areas.

These people went into agribusiness and civil construction. As we are a gateway for young people, it is important that the government encourages the hiring of this workforce, which will be trained and qualified.

New forms of hiring for young people are positive and have the potential to generate many jobs.

How does flexibility in labor relations help?

We have 37% of companies with their doors open, but operating at a loss. Any cost savings are important. Hiring this young person who has no qualifications means that there will be lower productivity at work in the first few months. Considering that every dollar saved makes a difference, this is important.

But the most important thing is that this employment contract has a maximum term of two years. Afterwards, this worker will move to the CLT labor regime, with all labor rights.

At a time of crisis, these innovative solutions are important. CLT is not flexible. The world has changed a lot since the law was passed.

Experts say that new ways of hiring young people will encourage school dropouts. How do you assess this issue?

Many young people stop studying because they need to help the family financially, they need to contribute to the family budget. This is a historical problem in Brazil.

But our sector has a flexible work shift that favors these young people. They can combine work and studies.

But wouldn’t it be interesting that this employment contract obliges the young person to be enrolled in a school, technical course or college?

These requirements discourage hiring workers. The conscientious young person, who knows he needs to study, does not abandon teaching to work. He knows that training will be needed down the road.

And companies encourage these young people to keep their studies. Bars and restaurants are increasingly demanding a well-trained and technologically knowledgeable workforce. For this, he needs to be in the classroom.

Are proposals to reduce labor and social security rights a valid way to generate employment?

We are not in favor of reducing rights. But we think the government can change the way some charges are collected.

It could be different, for example, the way in which social security charges are collected. Today we pay contributions that are levied on the salary. This could be a percentage of the billing.

Relieving the payroll is an important proposal to encourage hiring in Brazil. Hiring a worker in Brazil is expensive when compared to other countries.

How do you evaluate the part of the MP that creates a type of work without the right to vacations, 13th salary and FGTS?

Labor rights are important. But this moment of crisis is an opportunity to test paths and solutions that can work.

Brazil has 15 million unemployed and another 15 million who have already stopped looking for a job. We can be creative in creating solutions to employ these people. The time is to guarantee their dignity.

Does flexibility in labor relations really help create jobs?

We were hit by a pandemic that undermined any more consistent analysis of job creation.

The biggest generator of intermittent work are bars and restaurants. Any reform has a maturity curve. And this is the situation with the labor reform carried out under the Temer administration.

The intermittent work has not yet taken off because the STF (Supreme Federal Court) has not yet judged whether the model is constitutional or not. When the STF settles the matter, the intermittent work will take off.

How does the current institutional situation, with President Bolsonaro in tension with other powers, impact economic activity and the service sector?

This institutional tension between the three Powers impacts people’s lives and companies’ investment decisions. The sector of bars and restaurants defends that they put cold water in this boil so that the tempers calm down.

People don’t need to think alike, but the way it is, with a lot of tension, it’s very bad for the country.

Is there a risk of coup or institutional rupture in Brazil?

I prefer to believe not. Brazil has reacted very firmly against any move in this direction. But it gives a little butterflies in my stomach.