On July 14, 2017, Brazil’s Labor Reform Bill (Law No. 13.467) (the “Bill”) was published after it was approved by President Michel Temer. The new law will go into effect on November 11, 2017.
The Labor Reform Bill will make extensive changes to several provisions of the Brazilian Labor Code. The Bill is significant because it represents the country’s first attempt to modernize and overhaul labor rules that date back to the 1940s.
Most significantly, the Bill offers more leeway to collective bargaining and provides that agreements negotiated between employers and workers on a range of issues override labor legislation unless such agreements extinguish basic labor rights foreseen in the Federal Constitution (such as, for example, minimum wage, prior notice and FGTS). A collective bargaining agreement will prevail even if there is no express consideration. In doing so, the Bill prioritizes direct negotiations between workers and employers over existing labor regulations, thereby reducing employer costs by allowing companies to negotiate contracts freely with employees.
In addition, the Labor Reform Bill provides for the following noteworthy changes:
- Union’s Contribution: Union’s contribution, currently mandatory, will be voluntary and employees’ authorization will be required. Employers’ union contribution also will be voluntary.
- Terminating the Employment Contract by Mutual Agreement: Employees may negotiate resignations with employers and, upon mutual agreement, the parties may terminate the employment contract. In such case, employees may be entitled to: a 50% payment in lieu of notice; a 20% fine on the existing balance in the FGTS account; and a withdrawal of 80% of the existing balance in the FGTS. Although employees will be entitled to other labor funds (e.g., Christmas bonus, vacation, etc.), they will not receive unemployment insurance.
- Vacation Period: Vacation periods will receive more flexibility, as the vacation period may be split in three periods, one of which must be for a minimum period of 14 calendar days, and no vacation may be shorter than five calendar days. This provision applies to all employees, regardless of age.
- Home Office: For the first time, working at a home office will be legally regulated, as employees may work from a home office if agreed to in a written employment agreement (even though employees in a home office may not receive overtime pay).
- Part-Time Job: A part-time job may now comprise up to 30 hours per week (up from 25 hours per week) where overtime work is prohibited or up to 26 hours per week with the possibility to work six additional, pre-contracted, hours of overtime. Part-time workers are entitled to the same amount of vacation time as full-time employees and part-time workers may sell one-third of their vacation.
- Free Negotiation of Employment Agreements: Employees with a university degree and salaries equal to or higher than two times the cap of the social security benefit may freely negotiate employment agreements directly with employers without union participation.
- Ratification of Termination: Regardless of an employee’s time of service, the employee’s termination will no longer require union or Regional Office of the Ministry of Labor ratification.
- Mass Termination: Union authorization will not be required to enter into a collective bargaining agreement to implement a mass termination program.
- Voluntary Dismissal Plan: Unless otherwise specified by the parties, adhering to the Voluntary Dismissal Plan will provide a full and irrevocable release to the employment agreement.
- Court Precedent: Courts, through precedent or other ordinance, will not have the power to restrict legally provided rights or create obligations that are not legally foreseen.
While supporters of the Bill argue that such labor reform will revive and bolster Brazil’s struggling economy, benefit job growth, increase flexibility in the job market and lower the risks associated with new hires, challengers (including unions) decry that the Bill’s changes will reduce job security and weaken organizing power.
We will continue to follow and monitor the impact of this Bill.
On June 1, 2017, the Ontario government introduced the Fair Workplaces, Better Jobs Act (Bill 148). Bill 148 is not yet the law of the province but, if enacted, it contemplates sweeping changes to both traditional labor and employment law in Ontario. Broadly, the proposed Bill would raise the minimum wage in Ontario, change employee scheduling requirements, increase vacation time, make it easier for certain employees to unionize, and expand the use of arbitration during the negotiations for a first contract.
Proposed Employment Law Changes
Bill 148 proposes six broad changes to Ontario employment law:
- Minimum Wage: Raises the minimum wage to CD$14 per hour by 2018, and CD$15 per hour by 2019.
- Part-Time: Prohibits employers from enacting a pay differential based on a “difference in employment status.” This means that employers would be required to pay part-time, casual and temporary employees the same as full-time employees who perform the same job.
- Scheduling: The Bill would amend scheduling requirements, allowing employees to more easily request schedule changes and refuse shifts that are given with less than 4 days’ notice. The bill would also mandate 3 hours’ worth of pay if an employee is required to report for any shift, be on call, or a shift is cancelled with less than 48 hours’ notice.
- Vacations: Employees who have five years of service would now be entitled to three weeks’ vacation and vacation pay of at least 6% of their years’ salary.
- Personal Emergency Leave: Mandates that the first two days of personal emergency leave are given with pay. The bill does not change the 10 day personal emergency leave entitlement, and the remaining eight days would still be given without pay.
- Family Medical Leave: Family medical leave would be increased to 27 weeks in a 52 week period, the bill would create a new leave for the death of a child.
Proposed Labor Law Changes
Bill 148 also proposes ten broad changes to Ontario labor law:
- Expanded Scope: The Ministry of Labour will review whether employees working in agricultural, horticultural, architectural, legal, dental, medical and surveying professions should continue to be excluded from coverage of the Ontario Labour Relations Act (LRA).
- Employee List: Employers would be required to provide the union with a list of employees in an appropriate proposed unit, so long as the Ontario Labor Relations Board (OLRB) determines that at least 20 percent of the employees in the proposed unit are members of the union. This is a broader right of access to a list of employees as compared to the analogous Excelsior list provided before an election under United States labor law.
- Remedial Certification: The proposed changes significantly expand the right to remedial certification and would require the OLRB to certify a union as a bargaining representative if the agency is satisfied that the employer’s breach of the LRA resulted in the union being unable to reach 40 percent support. This is a much broader protection than the bargaining orders (also known as Gissel orders) issued under United States labor law.
- Card–Check Certification: In the building services, home care, community services, and temp-agency industries the LRA would now allow unions to be certified based on a card-check of members of the proposed unit. This has been on the wish list of unions in the United States for many years and represents a major boon for unions in Ontario. Under this proposal, the OLRB will dismiss an application if fewer than 40 percent of the employees in the proposed unit are members of the union but will certify the union if it is satisfied that more than 55 percent of employees are members of the union. If the OLRB finds that more than 40 percent, but less than 55 percent, of employees are members of the union, then the OLRB will hold a representation election.
- First-Contract Arbitration: The bill would expand use of arbitration during negotiations for a first contract, and either party would be able to apply for a mediator. The appointment of a mediator would prevent any lockouts or strikes for a period of 20 days, after which time either party may apply to the OLRB for mediation-arbitration.
- Successor Employer: The bill would expand successor rights to apply to any services provided by or to a building owner. This would mean that any purchaser of a building, or building services work, would likely be considered a successor employer.
- Appropriate Bargaining Units: The bill would give the OLRB expanded powers to review, amend or consolidate bargaining units in order to promote collective bargaining.
- Employee Return from Strikes: The bill proposes to remove the six month limit during which an employee on strike must apply to return to work. Instead there would be no time limit, and an employee will have the right to request reinstatement at the end of a strike or lockout, whenever that occurs.
- Just Cause: The bill would expand the right to only be disciplined or terminated for “just cause” from the date of certification until the date of the first contract. Considering the length of time a first contract may take, this significantly expands the right to employees to be protected by a just cause standard, even before it is enshrined in an agreement.
- Elections: Voting would be permitted electronically or by phone.
As is evident from the length of this post, Bill 148 will make sweeping changes to Ontario’s employment and labor laws. The bill will be discussed in hearings over the summer and there is not yet a defined schedule for when Bill 148 will be put up to a vote. Nonetheless, employers may wish to participate in the hearing process in order to ensure that they are able to present their positions and concerns to the government while Bill 148 is still open to amendments and changes. We will continue to monitor the progress of Bill 148 and will provide updates on this blog with any new information.
Proskauer has released a white paper on “What Employers Need to Know about Europe’s General Data Protection Regulation.” As you may know, on April 14, 2016, the European Parliament approved the General Data Protection Regulation (“GDPR”), which will replace the EU’s current data privacy standard and begin to apply on May 25, 2018. This paper provides a broad overview of the ways in which the GDPR will change data protection regulations across the EU, focusing on employee data and how it is treated differently from consumer data. This paper also highlights key areas of change from the current state of the law and suggests proactive steps an employer may take to better prepare for May 25, 2018. This is meant as a guide to assist employers with planning for and achieving compliance before the May 25th deadline. EU data privacy is an enormous challenge for multi-national companies, and many U.S. based companies doing business in the EU are struggling with what they need to do in order to get into compliance with the GDPR with respect to collecting, processing and transferring employee data. To read Proskauer’s full white paper titled, “What Employers Need to Know about Europe’s General Data Protection Regulation” please click here.
India’s Parliament has officially passed an increase to maternity leave in India. The new law entitles most mothers to 26 weeks of paid leave.
We last reported that India’s Upper House of Parliament approved the increase in August, 2016. However, India’s lower house held off approving the legislation until last week. The new law provides mothers with the following protections:
- Leave may start up to eight weeks before the expected delivery date.
- The introduction of 12 weeks of paid leave for mothers adopting a child younger than 3 months old, and for women having a child through a surrogate.
- All employers with 50 or more employees must provide a crèche (day nursery), and allow the mother four daily visits to the nursery;
- Allows new mothers and their employer to agree to a period of time for the new mother to work from home after the 26 week leave ends; and
- Employers must inform women of their right to maternity leave at the time of hire.
Nonetheless, the new provisions only apply to a mother’s first two children. The increase to 26 weeks does not apply to mothers with 2 or more children. For those mothers, the leave continues to be 12 weeks.
Still, the increase goes far past the protections in most other countries, and notably exceeds the 12 weeks of unpaid leave provided to parents in the United States under federal law. The law still requires Presidential assent and must be published in the Parliament’s Official Gazette in order to be fully enacted. However, these procedural steps should occur within the next few weeks.
April 3, 2017 Update: The law was published in the Official Gazette on March 27th and officially went into effect on April 1st. The provision regarding allowing new mothers and their employees to agree to a period of time for new mothers to work from home after the 26 weeks of leave will not go into effect until July 1, 2017.
What 2016 lacked in employment law changes, it made up with political surprises (Brexit) and sweeping data protection changes (the GDPR). Due to these dynamic changes and in anticipation of what lies ahead, our UK employment team published the Top Ten Things to Know About the UK Employment Law Landscape in 2017. In this briefing, we highlight recent legal developments, look ahead to what’s coming in 2017 and provide practical steps companies can proactively take to respond to this ever-changing landscape.
An Employment Tribunal in the United Kingdom ruled that a bicycle courier for CitySprint, a delivery firm, was a worker rather than self-employed and therefore entitled to paid leave. This is the most recent decision in a string of UK cases dealing with the “gig economy,” namely, repeated short-term work such as ride-sharing or courier services.
In the most recent case, Margaret Dewhurst worked as a bicycle courier for CitySprint, a company that organized and supplied courier services. Ms. Dewhurst took two days of vacation and brought a claim against CitySprint requesting pay for those two days of leave under the United Kingdom’s Working Time Regulations. Importantly, UK legislation differentiates between individuals who are “self-employed” and workers. While workers are not entitled to the same rights as employees, they have certain rights which are not enjoyed by self-employed independent contractors, including the right to be paid the minimum wage, protections under whistleblowing legislation and the right to receive paid annual leave.
Turning to whether Ms. Dewhurst was a worker or self-employed, the Tribunal noted that she had signed a series of computer-based agreements on her first day, including that she is “a self-employed contractor” and that she is “an independent business….” The agreements were not explained to Ms. Dewhurst. Therefore, the Tribunal discounted these agreements, noting they had likely been “generated by the ‘army of lawyers’” and that they “illustrate[d] the inequality of bargaining power” between Ms. Dewhurst and CitySprint.
The Tribunal instead looked to the “true situation” of the work relationship, ruling that the while the express terms of the contract were a “key piece in the jigsaw,” they were ultimately not dispositive. Ruling that Ms. Dewhurst was a worker rather than a self-employed contractor, the Tribunal focused on her day to day work. Specifically, the Tribunal noted that:
- Ms. Dewhurst tended to work established days and hours;
- Ms. Dewhurst did not work for other businesses;
- Ms. Dewhurst received training about how to perform her courier duties;
- Ms. Dewhurst had to wear a uniform;
- Ms. Dewhurst did not have full control over accepting or declining jobs;
- CitSprint handled billing client; and
- CitySprint allocated the jobs.
The Tribunal concluded by noting that “[o]verall, [couriers] have little autonomy to determine the manner in which their services are performed and no change at all to dictate its terms. In public, in dealings with their controllers and between themselves[,] the couriers regard themselves as part of the CitySprint family, for better and for worse.” Therefore, the Tribunal ruled that Ms. Dewhurst was a worker and entitled to paid leave.
While this decision is technically tied to the facts of the case, its reasoning will likely apply to other workers in the “gig economy” who are part of a strong corporate structure with clear requirements and oversight. In particular, it highlights the potential risk of misclassifying individuals as independent contractors when they are in fact workers. We will continue to monitor the rapidly developing law in this area.
We wrote about the Draft Gender Pay Gap Regulations in the April 2016 edition of A Month in UK Employment Law. In December 2016, the UK Government published a revised version of these Regulations which are expected to come into force on 6 April 2017.
As a reminder, the Regulations require private sector employers in the UK with at least 250 employees to publish certain information about the differences in pay between men and women. It is anticipated that 7,960 employers and around 11 million employees will be affected (34% of the total UK workforce).
A new law, called El Khomri law, passed on August 8th, 2016 in France providing a right to disconnect for employees.
Such right is entered into force on January 1st, 2017
According to the law, it belongs to the employers and the unions to negotiate this new right to determine its modalities of application and of control. Such negotiation should take place in companies having at least 50 employees and should provide for the implementation of mechanisms of regulation regarding the use of the new technologies in order to ensure the compliance with rest times and holidays and the familial and personal life of the employees. Continue Reading
The High Court ruled on December 1, 2016 that Northampton Recruitment Limited was not liable when a manager punched an employee twice in the head after a Christmas party. While the Company was not held liable, the case is a cautionary tale for companies during the holiday season.
In Jeffrey v. The British Council 2016, the Employment Appeal Tribunal (“EAT”) ruled that an employee who had an “exceptional degree of connection” with the United Kingdom could bring claims in the UK even though he had been working outside of the UK for over 20 years. This provides an important exception to the general rule that employees have to be working in the UK to bring employment claims there.