Global Employee Consultations at a glance: Brazil | White & Case LLP International Law Firm, Global Law Practice
Global Employee Consultations at a glance: Brazil

Global Employee Consultations at a glance: Brazil

Welcome to the Brazil page of our Global Employee Consultations at a glance series. To learn more, please visit our Global Employee Consultations at a glance page.

 

TABLE OF CONTENTS

Transfer of Business

Collective Redundancies

Individual Redundancies 

 

Transfer of Business

Trigger point

The below obligations will be triggered on a transfer of an "establishment" between two Brazilian entities. For these purposes, "establishment" means a group of assets that enable a company to operate a business.

In the event that these circumstances occur, the contracts of employment of employees who are assigned to the establishment transferring will automatically transfer to the Transferee.

Obligations

There are no mandatory obligations to inform and consult with employees, but, in practice, the Transferor and/or Transferee may wish to do so.

Timing

There is no mandatory obligation to inform and consult with employees, and therefore no prescribed timeframe if a Transferor and/or Transferee chooses to do so.

Representatives

There is no requirement for employee representatives to be appointed. If a Transferor and/or Transferee decides to inform and consult with employees, existing representatives will play a role in this process.

Information/Notification

There are no mandatory information or notification obligations.

Consultation

There is no mandatory obligation to consult with employees.

Veto rights

Neither the employees nor the employee representatives have any veto rights, and neither can stop a transfer from proceeding.

Penalties

As there is no mandatory obligation to inform and consult with employees, there are no penalties for failing to do so.

Other

The Transferor and/or Transferee must comply with any additional process prescribed in any applicable CBA.

To the extent any information is provided, it is recommended that it is provided in Portuguese.

Business transfers and asset purchase agreements are treated confidentially in Brazil and the employees will not know about the transaction until it has been completed.

Impact of Share Sale

On a Share Sale, employees will remain employed by the same entity under the same terms and conditions on completion. A Share Sale will not itself trigger consultation obligations.

Intra-Group Transfers

The same requirements apply in the event of an Intra-Group Transfer.

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Collective Redundancies

Threshold

There is no legal concept of "collective redundancy" in Brazil and so the obligations set out below will apply regardless of the number of employees proposed to be made redundant. That said, in practice, an employer is more likely to seek to negotiate with a Trade Union or Commission of Employees where the redundancies will impact a significant proportion of its employees, and this will be determined on a case-by-case basis.

Obligations

There is no obligation to inform and consult with the Trade Union or any Commission of Employees. In practice, the employer may choose to negotiate a collective redundancy package with the Trade Union or a Commission of Employees, under which the affected employees would provide a waiver of claims to the employer.

Timing

There is no obligation to inform and consult with employees, and therefore no prescribed timeframe if an employer chooses to do so. If the employer chooses to negotiate with a Trade Union or Commission of Employees, in practice, negotiations can take around two months.

Representatives

There is no requirement for employee representatives to be appointed. However, in the case of companies with more than 200 employees, the employees have the right to create a Commission of Employees, the size of which will depend on the total number of employees per location. If there is such a Commission, the employer may choose to negotiate the redundancy package with it.

Information/Notification

There are no mandatory information or notification obligations. However, in practice, the employer should have a discussion with employees to explain that their roles are being made redundant.

The employer must also notify the Labor Department of the termination of employees by submission of an online form called "CAGED". The notification should include the date of dismissal and data concerning the dismissed employee, including: name, date of birth, date of hiring and date of termination, reason for termination, and number of registration with the social security ("PIS" number). The Labor Department must be informed by the seventh day of the month following that of the employee's termination.

Consultation

Although there is no obligation to consult with employees, in practice, the employer may choose to consult with any existing Trade Union, Commission of Employees or with the employees themselves. The employer may choose to enter into a CBA with a package for the collective dismissal, so that it obtains a waiver of claims from the affected employees.

Penalties

As there is no mandatory obligation to inform and consult with employees, there are no penalties for failing to do so.

Other

The employer must comply with any additional process prescribed in any applicable CBA.

To the extent any information is provided, it is recommended that it is provided in Portuguese.

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Individual Redundancies

Threshold

There is no legal concept of "collective redundancy" in Brazil and so the obligations set out below will apply regardless of the number of employees proposed to be made redundant.

Obligations

There is no mandatory obligation to inform and consult with employees in relation to the proposed redundancies.

Timing

There is no mandatory obligation to inform and consult with employees, and therefore no prescribed timeframe if an employer chooses to do so.

Representatives

There is no requirement for employee representatives to be appointed.

Information/Notification

There is no obligation to inform employees. However, in practice, the employer should have a discussion with the employees to explain that their role may be made redundant and the reasons for this.

Consultation

There is no obligation to consult with employees but, in practice, employers may wish to undertake a limited consultation process to consult on ways to avoid the redundancies, the selection criteria to be used, alternative employment opportunities and the suggested redundancy package.

Penalties

As there is no mandatory obligation to inform and consult with employees, there are no penalties for failing to do so.

Other

The employer must comply with any additional process prescribed in any applicable CBA.

To the extent any information or documentation is provided, it is recommended that it is provided in Portuguese.

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See also:

Global Employee Consultations at a glance ›

Employment, Compensation & Benefits practice group ›

 

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