Senate rejects MP that created programs with flexible rules for hiring young people | Policy

On Wednesday (1), the Senate rejected the proposal that created three new programs, with more flexible labor rules, to try to encourage the hiring of young people. There were 47 votes for filing the MP, and 27 for approval.

The programs aimed at first job and professional qualification had been included by the Chamber in a provisional measure, sent by the government in April, which dealt only with a new round of the workload and salary reduction program or suspension of employment contracts during the pandemic.

The text was part of government initiatives to try to avoid layoffs during the period of health crisis caused by the new coronavirus.

Senators opposed to the programs say that the initiatives inserted in the Chamber, to generate more jobs, ended up taking away labor rights;

A provisional measure is valid from the moment it is published in the “Official Gazette”, but needs to be approved within 120 days by the Chamber and the Senate to become permanent law.

Understand what changes with MPs that make labor rules in the pandemic more flexible again

Understand what changes with MPs that make labor rules in the pandemic more flexible again

With the rejection and shelving of the MP, according to technicians from the General Secretariat of the Senate, Congress must prepare a draft legislative decree to “modulate” the relations that have already been signed.

In this case, the draft decree would serve to give legal certainty to the agreements already signed in the new phase of the program for the reduction of hours and wages or temporary suspension of the employment contract (BEm).

In general, however, this draft decree is not even analyzed by the Legislature. If that happens, in practice, the rules of the MP will apply to the relationships that were signed within the foreseen 120 days – term that ended on April 27th.

The Priore, Requip and the volunteer programs were introduced by the Chamber and, therefore, never came into force. As there are no contracts entered into in these programs, the filing has no legal impact.

Initially, the provisional measure issued by the federal government had only 25 articles and it dealt only with the New Emergency Program for the Maintenance of Employment and Income, with rules similar to the workload and salary reduction program created in 2020.

In Congress, however, the proposal was expanded with the support of the Ministry of Economy. 94 articles and started to be called by opposition parliamentarians of “mini-labour reform”.

According to the Brazilian Institute of Geography and Statistics (IBGE), the unemployment rate in the second quarter of 2021 was 14.1% and reaches 14.4 million Brazilians.

According to the MP, the New Job and Income Maintenance Program is valid for 120 days from the publication of the MP, on April 27th. According to the proposal, the measures of the program are:

  • payment of the Emergency Employment and Income Maintenance Benefit;
  • the proportional reduction in working hours and wages;
  • the temporary suspension of the employment contract.

The text establishes the payment of the emergency benefit to those who have a proportional reduction in working hours and wages, and the temporary suspension of the employment contract.

According to the proposal, the benefit is paid monthly, from the date of the start of the reduction of the working day and salary or the temporary suspension of the employment contract, subject to the following rules:

  • the employer informs the Ministry of Labor and Welfare of the reduction of working hours and wages or the temporary suspension of the employment contract, within ten days, counting from the date of execution of the agreement;
  • the first installment is paid within 30 days from the date the agreement is signed;
  • the Emergency Employment and Income Maintenance Benefit is paid exclusively for the duration of the reduction in working hours and wages or the temporary suspension of the employment contract;

The amount of the benefit is based on the amount of the portion of unemployment insurance to which the employee would be entitled. For example, a worker whose hours and wages were reduced by 50% is entitled to half of the unemployment insurance portion.

When editing the MP, the government predicted an expense of about R$ 10 billion to fund the program.

Once the period of work and salary reduction or contract suspension has ended, the worker has a provisional guarantee in employment for the period equivalent to that agreed for the reduction or suspension.

According to data from the General Register of Employed and Unemployed Persons (Caged), the contract suspension or workload reduction program has ensured, since last year, job stability for around 9.2 million workers.

First job and reintegration

One of the new actions that would be created by the MP and were canceled with the rejection in the Senate is the First Opportunity and Reintegration into Employment Program (Priore), aimed at young people aged 18 to 29, in their first job with a formal contract, and for people over 55 who have been without a formal employment contract for more than 12 months.

Defended by the economic team, the modality included by Congress in the MP rescued ideas from the green and yellow workbook, which was sent to the Legislature in 2019, but did not prosper.

In order to encourage companies to hire through the program, the payment of employees in Priore’s Employment Guarantee Fund (FGTS) would have lower rates than those applicable to normal employment contracts. The rate, which is generally 8%, would drop to 2% in the case of micro-enterprises; 4% for small businesses; and 6% for other companies.

The text said that the hiring of workers through the Priore will be exclusively for new jobs. And the company could only hire 25% of the total employees through this modality.

In addition to the remuneration paid by the company, the workers hired by the Priore would primarily receive professional qualification bonuses. The employer, according to the text, must ensure initial training or professional qualification of at least 180 hours per year or its monthly equivalent, if the contract is less than one year in duration.

The text also allowed the use of Priore in rural work, except for the harvest contract. The Ministry of Labor and Welfare will be responsible for coordinating, executing, monitoring, inspecting, evaluating and editing complementary norms to the program and, within 60 days, the regulation necessary for the implementation of the measure.

The proposal allowed for hiring through the Priore within a period of 36 months from the enactment of the law.

Another action provided for in the MP and rejected by the Senate was the Special Regime for Incentivized Work, Qualification and Productive Inclusion (Requip). The program would be aimed at:

  • young people from 18 to 29 years old;
  • unemployed for more than two years;
  • or low-income people coming from federal cash transfer programs.

As there would be no formal employment relationship, the program provided for the payment of a scholarship (half paid by the company, half by the government), which will be up to R$550. The amount would also vary according to the workload.

The working day could be up to 22 hours per week, and companies would have to offer professional qualification to the scholarship holders.

The text would also create the National Program for the Provision of Voluntary Social Service, aimed at:

  • young people from 18 to 29 years old;
  • people over 50 years of age.

The program, which would allow city halls to hire people for temporary services, would last for 18 months. The maximum workday for the selected person to perform the activities would be 48 hours a month, limited to 6 hours a day, on a maximum of three days a week.

There would be a monthly pecuniary benefit, which could not be less than the hourly value of the minimum wage, around R$ 5. The Union could help with the payment with up to R$ 125 per month.

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