Until November 11, 2017, Brazil concentrated absurd 95% of all labor lawsuits of employees against former employers in the WORLD. Stupidly, that was considered as one of the “advances” of the ultra-protectionist labor legislation of the country, called CLT (Consolidation of Labor Laws, a large size book, over 500 pages).
The Temer administration, with its extremely low public opinion approval (around 9%) took the opportunity and decided to modernize the legislation, which was lauded by the business community and execrated by the unions and labor lawyers (as well as left-wing parties). It finally came in force as of November 11th.
Since then, the number of labor lawsuits in Brazil fell astounding 85%. The reason is simple to explain: new legislation introduced “innovations” such as the necessary presentation of evidence for the lawsuit to be considered by courts (believe it or not, it was not necessary before, and companies should bear the burden of proof) and the obligation of the losing part to bear the costs of the lawyers.
The previous legislation made the labor lawsuits a national sport, for the employees in Brazil. If you want a fast buck, go to court without evidence, and ask the most outrageous indemnities. Say that you worked 18 hours a day in semi-slavery conditions, under rough supervision, that you were morally harassed, etc. Pick a couple of ex-colleagues to back your word and voilà! Companies would settle just to avoid paying their lawyers. It was not uncommon to see lawsuits of $ 100,000 settled at $ 3,000. No risk. But no more.
The legislation also modernized the employment relations. This is fantastic for business and is having its repercussions. As of today (Feb 5), Circuit Labor Court (TST) decided against an “employee” (a former Uber driver) in recognizing a “labor employment” relationship under the CLT, as a regular payroll employee. That is fantastic, not only for Uber, but for the whole new economy of Apps and, at the end of the day, for all employees and employers. This gives more certainty for investors and leaves the labor force also certain of its place in the market, and the fact that self-employed is not employed… but NOT unemployed either. Meaning, naturally, more work for the average Brazilian.
Unions talk about the “precariousness” of the employment, leading to a worse quality of average wages and labor conditions. Well, tell it to the unemployed guy with a car sitting in the garage and no job whether he thinks best to be doing cab work and collect some money.
Let Brazil continue to modernize its labor legislation. One can only hope.
Fonte: Wesley Figueira | Sócio Diretor