We are expanding operations into Brazil. What do we need to know about their complex labor systems?

We are expanding operations into Brazil. What do we need to know about their complex labor systems?

So, you’re opening a company in Sao Paulo and need to know the basic rights of employees. In Brazil, inter-relating authorities create uncertainty when answering this basic question.

First, the Brazilian Constitution has 250 articles, and Article 7, which foresees most of the employment and labor rights, has 34 sections. Next, the Brazilian Labor Code, has 922 articles. After that, Brazil has close to 18,000 unions.

Union representation happens automatically. Neither employees nor employers get to choose their representative unions. Criteria are objective, based upon location and the employer’s main economic activity. Each trade union and employers’ association negotiates general collective bargaining agreements (CBAs), in Portuguese, “Convenção Coletiva de Trabalho,” that set out additional rights for employees.

These apply to all companies and all employees represented by that specific professional category within the union’s area of coverage, which could be a city, several cities, a state, a geopolitical region, or even the whole country. We are not done.

There are also specific CBAs signed between the employees’ union and a specific employer. In Portuguese, these are called “Acordo Coletivo de Trabalho,” and only apply to the workers employed by that company. While not mandatory, these agreements are common.

In many situations, either a general or a specific CBA will prevail over the Constitution and Labor Code, and specific CBAs always prevail over general CBAs. Finally, even though Brazil is a civil law country, binding jurisprudence often prevails over all else. If you’re confused, don't worry. We are your local resource for navigating the mind-bending maze of Brazilian employment laws.