Memorandum Provisional Measure 936/202015 de April de 2020 | Publications
The Federal Government aiming to promote the maintenance of the employment, enacted Provisional Measure 936/2020, published in the Official Gazette on April 1st, 2020. This Provisional Measure establishes the Emergency Employment and Income Maintenance Program and provides complementary labor rules to deal with the state of public calamity and the public health emergency, which is a result of the pandemic of COVID-19.
The Emergency Employment and Income Maintenance Program foresees the possibility of:
I – proportional reduction of the working hours and salary;
II – temporary suspension of the employment agreements;
III – payment of the Emergency Employment and Income Preservation Benefit by the Federal Government.
Proportional Reduction of the Salary and Working Hours
Only during the state of the public calamity, and for up to 90 (ninety) days, there may be a proportional reduction of the working hours and of employees ´salaries. Said reduction has to be agreed upon by the employer and the employee, agreement that will follow the criteria of the below chart. If implemented, the employee has to receive a prior notice with at least 2 days.
The value of the work/ hour is preserved and said reduction does not modify it.
At the same time that the number of working hours are reduced, and so is the salary, the employee may be entitled to receive the Emergency Employment and Income Preservation, which will be paid for by the Federal Government, according to the following criteria:
|REDUCTION OF THE SALARY AND WORKING HOURS||AMOUNT OF THE BENEFIT PAID BY THE GOVERNMENT||INDIVIDUAL AGREEMENT||COLLECTIVE AGREEMEN / COLLECTIVE BARGAINING|
|25%||25% of the unemployment benefit insurance||Yes, possible, regardless of the amount of the salary. A notice has to be sent to the Union in 10 days counted as from the date of the execution of the agreement.*
|50%||50% of the unemployed benefit insurance||Yes, possible only to the employees who receive equal or less than BRL 3.117,00 or equal or more than BRL R$12.202,12 and in this case have graduated from University. Notice has to be sent to the Union in 10 days counted as from the date of the execution of the agreement. *
|Mandatory to the employees in between (earning more than 3.117,00 BRL and less than BRL 12.202,12). Possible to all the employees.|
|70%||70% of the unemployed benefit insurance||Yes, possible only to the employees who receive less than BRL 3.117,00 or more than BRL R$12.202, 12 and in the latter case have graduated from University. Notice has to be sent to the Union in 10 days counted as from the date of the execution of the agreement. *||Mandatory to the employees in between (earning more than 3.117,00 BRL and less than BRL 12.202, 12). Possible to all the employees.|
*Notwithstanding the possibility of individual agreement, foreseen in the Provisional Measure, as per one Court order in an injunction relief filed at the Supreme Court (Direct Unconstitutional Action 6363), after the notice to the Union, the Union will have 30 days to start the negotiation with the company. That means that the individual agreement will depend upon Union´s approval. However, Union´s silence will trigger the automatic approval. The Report Judge has issued the decision but the Court will judge the action.
The employer must re-establish the working days and the salary previously paid serving the employee a prior notice of two days, counted as from:
– the end of the state of public calamity;
– the date foreseen in the individual agreement as the end of the reduction agreed; or
–the date of the employer’s communication informing the employee about the decision to anticipate the end of the reduction period
In case the employer intends to negotiate different percentages of reduction (other than 25%. 50% or 70%), then it may done so, but only through negotiation with the Union.
The individual agreements signed must be sent and informed to the Union within 10 (ten) days.
The Emergency Employment and Income Maintenance Benefit will be paid according to the following:
I- No right to it in case of reduction of the working days and salary less than twenty five percent;
– twenty five percent on the reduced salary, in case of reduction of working days and salary equal or higher than twenty five percent and less than fifty percent;
– fifty percent on reduced salary in case of reduction of working days and salary equal or higher than fifty percent and less than seventy percent; and
– seventy percent on reduced salary in case of reduction of working days and salary equal or higher than seventy
In case the employer decides to terminate the employment agreement without cause, in addition to the severance payments established for in the Law, employer will indemnify the employee, as follows:
1. 50% of the amount of the salary that the employee would be entitled up to the end of the suspension period, in case the reduction of the salary is equal or higher than 25% and less than 50%.
2. 75% of the amount of the salary that the employee would be entitled up to the end of the suspension period, in case the reduction of the salary is equal or higher than 50% and less than 70%.
3. 100% of the amount of the salary that the employee would be entitled up to the end of the suspension period, in case the reduction of the salary is equal or higher than 70%.
If the employee is the one who decides to terminate the agreement, or it is terminated by cause, employer has no obligation to indemnification.
Temporary Suspension of the Employment Agreement
During the state of public calamity referred to, the employer may on a temporarily basis, suspend the employment agreement of the employees, for a maximum period of sixty days, which may be divided into up to two periods of thirty days. The suspension of the labor agreement shall be the object of individual agreements or collective bargaining, as explained in the above chart.
During the suspension and for the same period in which the agreement was suspended, the employee has job stability. Therefore, the employees who had their employment agreements suspended for 60 days will have job stability for another 60 days.
The temporary suspension of the employment agreement is conditioned upon the mutual agreement with the employee. Such shall be proven by and individual written agreement between employer and employee, which will be sent to the employee ‘analysis at least with two days before the execution date.
With the temporary suspension of the agreement, the employee:
I – is entitled to all benefits granted by the employer; and
II – will have the option to collect for the General Social Security System.
The employment agreement will return to be in full force, with the compliance of the same criteria, as above (two days prior notice).
So as to prevent frauds, the Provisional Measure establishes that during the suspension of the employment agreement, the employee shall not work. If he/she does, the suspension will be null and void and the employer will be accountable for the penalties.
The companies that had in the calendar year of 2019 a gross revenue up to BRL 4.800.000,00 (four million, and eight hundred thousand BRL) may suspend the employment agreement, and the employee will have the right to receive a Benefit from the Federal Government equal to 100% of the unemployed insurance.
As for the companies that had in the calendar year of 2019 a gross revenue in excess of BRL 4.800.000,00 (four millions and eight hundred thousand BRL), they may suspend the employment agreement of its employees but they have to pay to each employee a monthly compensatory aid in the amount of 30% on the employee’s salary. In this case, the employee will be entitled to receive from the Federal Government as Benefit 70% of the amount of the unemployment insurance.
The payment of the monthly compensatory aid does characterizes as indemnification. It is not taxable basis for the social contributions and taxes levied on the payroll; it is not a taxable basis for the Income Tax, which is due by the employee.
The subject is new and quite controversial and the constitutionality of some aspects of the Provisional Measure may be challenged. However, the Provisional Measure is already in force.
We remain at your disposal to clarify any questions.
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