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Provisional Measure 1045/2021
28 de May de 2021 | PublicationsThe Federal Government, aiming to promote the maintenance of the employment during the public health emergency situation, which is a result of the pandemic of COVID-19, enacted Provisional Measure 1045/2021, published in the Official Gazette on April 28th, 2021.
This Provisional Measure establishes the New Emergency Employment and Income Maintenance Program, scheduled to end on August 25th, 2021. Such Provisional Measure may be extended by the Government, according to its budget availability. The new Provisional Measure follows the parameters of the former Provisional Measure 936/2020, which last year has been voted for and passed by Congress as Law number 14,020/2020.
A new Provisional Measure was required, since the previous one, converted into Law, established measures of proportional reduction of salary and working hours and the temporary suspension of the employment agreement only while the State of Public Calamity was in course. The State of Public Calamity was recognized by Legislative Decree number 06/2020 and according to such Decree it ended on December 31st , 2020, in spite of the continuous grow of the number of infected people with COVID 19 in Brazil.
The Emergency Employment and Income Maintenance Program foresees the possibility of:
1. proportional reduction of the working hours and salary;
2. temporary suspension of the employment agreements;
3. payment of the Emergency Employment and Income Preservation Benefit by the Federal Government.
Proportional Reduction of Salary and Working Hours
The salary and working hours may be proportionally decreased only for up to 120 (one hundred and twenty) days, as from April 28th 2021. The reduction of salary is valid only until August 25th, 2021, unless some amendment comes into force.
It is possible for the employer to negotiate the proportional reduction of working hours and wages only for some sectors, or departments of the company, comprising part of the employees, or comprising all employees. It is important to note that this may not be imposed, but rather negotiated. The negotiation may be by means of a collective labor agreement, a collective bargaining agreement or an individual written agreement between the employer and employee, as per the below chart. Even if implemented by means of an individual written agreement, the employee has to receive a prior written notice of the reduction with at least 2 days.
The value of the work/ hour is preserved and said reduction does not entail modification. At the same time that the number of working hours is reduced (and so is the salary), the employee is eligible for receiving 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.
|
Possible |
| 50% | 50% of the unemployed benefit insurance | Yes, possible for employees who receive a salary equal to or less than R$ 3,300.00 or equal to or greater than R$ 12,867.14 and, in the latter, has a higher education diploma. It is also possible for employees who receive any salary, provided that the agreement does not result in decreasing the total amount received monthly by the employee, included the Emergency Employment and Income Maintenance Benefit, the monthly compensatory aid and, in the event of reduction of work hours, the salary paid by the employer. A notice has to be sent to the Union in 10 days counted as from the date of the execution of the agreement. | Mandatory for employees who receive more than R$ 3,300.00 and less than R$ 12,867.14, as long as they do not fall under the exception on the table beside. Collective agreement or collective bargaining are possible for all employees. |
| 70% | 70% of the unemployed benefit insurance | Yes, possible for employees who receive a salary equal to or less than R$ 3,300.00 or equal to or greater than R$ 12,867.14 and, in the latter, has a higher education diploma. It is also possible for employees who receive any salary, provided that the agreement does not result in a decrease in the total amount received monthly by the employee, included the Emergency Employment and Income Maintenance Benefit, the monthly compensatory aid and, in the event of reduction of work hours, the salary paid by the employer. A notice has to be sent to the Union in 10 days counted as from the date of the execution of the agreement. | Mandatory for employees who receive more than R$ 3,300.00 and less than R$ 12,867.14, as long as they do not fall under the exception on the table beside. Collective agreement or collective bargaining are possible for all employees. |
The employees who are already retired may not receive the Income Maintenance Benefit and therefore they are a specific case and require a specific negotiation.
We highlight that the electronic signature is accepted in the individual and collective agreements, so it is easier to execute such agreements, without gathering the employees in the company.
In case after the execution of an individual agreement, the respective Union negotiates a collective bargaining or a collective labour agreement, which clauses and conditions are divergent with the individual agreement, the following will apply:
1. the conditions established in the individual agreement will be applicable to the period prior to the collective bargaining; and
2. As from the effective date of the celebration of a collective labor agreement or collective labor bargaining, the conditions agreed in those instruments will prevail over the ones established in the individual agreement, only to the extent that the provision of the collective bargaining/collective labour agreement are in conflict with the ones of the individual agreement.
However, if the conditions of the individual agreement are more advantageous to the employee, those will prevail. The negotiations may never be interpreted as a way to jeopardize the employee´s rights.
For reversing the reduction of working days and the salary, the employer has to serve a written notice to the employee with at least two days, counted as from:
1. the date foreseen in the individual agreement as the end of the reduction agreed; or
2. the date of the employer’s communication informing the employee about the decision to anticipate the end of the reduction period agreed.
In case the employer intends to negotiate different percentages of reduction (other than 25%. 50% or 70%), then it may do so, but only through negotiation with the Union (collective labor agreement or collective labor bargaining). 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 basis:
1. No right to it is granted in case of reduction of the working days and salary lesser than 25%;
2. 25% on the reduced salary, in case of reduction of working days and salary equal or higher than 25% and less than 50%;
3. 50% on reduced salary in case of reduction of working days and salary equal or higher than 50% and less than 70%; and
4. 70% on reduced salary in case of reduction of working days and salary equal or higher than 70%.
If the employee had no right and receives a part of the Emergency Employment and Income Maintenance Benefit, such an amount may be directly discounted from the social securities, like the unemployment aid and the salary bonus.
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. The Provisional Measure foresees only three indemnification parameters:
1. 50% of the amount of the salary that the employee would have received until 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 have received until 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 have received until the end of the suspension period, in case the reduction of the salary is equal or higher than 70%.
On the other hand, if the employee decides to terminate the agreement, if the Labour Agreement is terminated by mutual agreement (according to article 484-A of the Consolidation of Labor Laws) or it is terminated by cause, employer has no indemnification obligation. The Provisional Measure provides a guarantee of employment for the employee during the period in which the working hours and salary are reduced or the employment contract is temporarily suspended. Such guarantee of employment will be counted for the counting of service for retirement.
For a pregnant employee, the guarantee of employment will be counted as from the date of termination of the maternity leave established in article 10, II, “b” of the Transitional Constitutional Provisions Act. The days of reduction of the working days and salary will be added to the maternity leave, or to the days the employment agreement is suspended.
Temporary Suspension of the Employment Agreement
The employment agreements may be temporarily suspended for up to 120 (a hundred and twenty) days, starting on April 28th, 2021. The temporary suspension may not exceed August 25th, 2021.
It is possible for the employer to negotiate the temporary suspension of the employment agreement only for some sectors of the company, or for some departments, comprising part of the employees or all employees. It is important to note that this may not be imposed, but rather negotiated. The negotiation may be by means of a collective labor agreement, a collective bargaining agreement or an individual written agreement between the employer and employee.
Only the employees who receive a salary equal to or less than R$ 3,300.00, or has a higher education degree and receive a salary equal to or greater than R$ 12,867.14 are eligible for the individual agreements. If implemented by individual written agreement, the employee has to receive a prior notice with at least 2 days.
During the suspension of the labour agreement and for that time the employee has job stability. Therefore, the employees who had their employment agreements suspended for 120 (a hundred and twenty) days will have job stability for another 120 (a hundred and twenty) days. During the suspension, the employee may contribute to the Social Security, as an individual.
The temporary suspension of the employment agreement is conditioned upon the mutual agreement with the employee. Such shall be proven by an individual written agreement between employer and employee, which has to sent to the employee analysis at least with two days before the execution date. The above chart explains in which cases a collective labor agreement or a collective bargaining agreement are required.
With the temporary suspension of the agreement, the employee:
1. is entitled to all benefits granted by the employer; and
2. will have the option to contribute with the General Social Security System.
For reversing the suspension of the labor agreement the employer has to serve a written notice to the employee with at least two days, counted as from:
1. the date foreseen in the individual agreement as the end of the suspension agreed; or
2. the date of the employer’s communication informing the employee about the decision to anticipate the end of the suspension agreed.
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 their employees but they have to pay to each employee a monthly compensatory aid in the amount of 30% of 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 is considered to be an indemnification. It is not counted in the 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 and such monthly compensatory aid is considered to be an operational expense, deductible in the calculation of the net profit, which is the taxable basis of the Income Tax for the companies taxed under the Actual Profit System (“Lucro Real”).
The salary reduction and suspension of the employment agreement are applicable only to the employment agreements executed and in force until April 28, 2021, and are also applicable to employment agreements with prior notice in progress, provided that the employer and employee both agree with revoking the notice.
The Provisional Measure 1045/2021 maintains the main aspects of the Provisional Measure 936/2020, since the economic and health crisis resulting from the Covid-19 pandemic are still a reality, but it also brings relevant updates and enable immediate effect, so that the companies have some relief in their costs.
We remain at your disposal to clarify any questions.
BRENTANI RONCOLATTO ADVOGADOS
