Brazil: Modernization of Employment Laws Continues After the Labor Reform

After the important changes implemented to Brazilian employment laws by the November 2017 labor reform, the Brazilian government is in the process of updating, simplifying, and consolidating hundreds of employment regulations. This process is expected to be concluded by November 2019.

Brazilian rules governing health and safety at work, for instance, have remained almost unchanged for over 30 years. A complete overhaul of such rules was long overdue, and the business community welcomed the government’s initiative.

The first revised health and safety regulations (also known as normative regulations, or NRs) were adopted on July 31, 2019, and will become effective as of September 14, 2019.

The most significant changes were made to NR1, which provides guidance for the enforcement of all NRs on health and safety at work, and to NR12, which addresses safety concerns associated with the use of machinery and equipment in the workplace.

Among other important changes, NR1 now contains rules allowing for the use of distance and blended learning in the context of safety at work training and permitting employees who have been previously trained to receive credit for that training when they change function or start working for another employer in the same function.

As to NR12, it has been revised to allow imported machinery and equipment manufactured in compliance with international rules to be used as is. Before this change, companies often had to adapt imported machinery and equipment to make them compliant with Brazilian laws, which resulted in additional costs and, in some circumstances, the loss of warranties granted by manufacturers.

In addition to these important changes to NR1 and NR12, the rules adopted on July 31 also resulted in the revocation of NR2, which required a workplace inspection by employment authorities as a condition to the start of the business activities, and in the elimination of outdated and/or burdensome requirements from various other NRs.

The changes already implemented and the ones still underway are expected to simplify the process and reduce the costs of setting up and running businesses in Brazil from an employment regulatory standpoint. That should make Brazilian businesses more efficient and competitive, and make Brazil more attractive to investors, thus fostering employment and income generation.

According to the Brazilian government, the July 31 changes alone should result in cost savings more than £14 billion GBP over a 10-year period and produce a 0.5 percent to 1 percent increase in Brazilian industrial production.

Drafts of other regulations expected to be enacted by November 2019 are currently under public consultation and can be found (in Portuguese) at http://participa.br/secretaria-de-trabalho.

Written by Patricia Medeiros Barboza of CGM Advogados and Roger James of Ogletree Deakins

© 2019 CGM Advogados and Ogletree, Deakins, Nash, Smoak & Stewart, P.C.