Federal Senate converts Provisional Measure No. 936, with modifications, into law

The plenary session of the Federal Senate unanimously approved, on Tuesday (June, 16), the conversion of Provisional Measure No. 936/2020, which allows the suspension of the employment contract and the proportional reduction of hours and wages, during the pandemic of Covid-19, to enable the maintenance of jobs, into law.

It is important, at this point, to highlight that the actions implemented by the companies during the validity of the provisional measure, before its conversion into law, are binding and fully effective.

The original text, for being altered in some points, needs the sanction of President Jair Bolsonaro. The sanction will be necessary because the measure underwent changes when it was approved by the Chamber.

The senators approved the text coming from the Chamber, without changes of merit (content). They made only a few objections and editorial adjustments.

The main change presented by the Chamber and approved by the Senate was the inclusion of Paragraph 3, in Article 7 and Paragraph 6, in Article 8, which allow the government to extend the maximum period for the reduction of hours and wages (90 days) and suspension of the employment contract (60 days), respectively, by an act of the Executive Power, respecting the duration of the state of public calamity.

It is important to note that the extension is one of the main demands of the productive sector, since, as the provisional measure has been in force since the beginning of April, the contracts that were suspended on that occasion have already resumed their validity. However, the entrepreneurs want to suspend contracts for a longer time, since economic activity in the country has not yet returned to normal.

To that end, employers wishing to extend the effects of suspension and reduction will have to enter into new agreements with their employees, establishing new deadlines for suspension or reduction of working hours and wages, once the law is duly sanctioned by the President of the Republic.

Another change suggested by the deputies and maintained by the senators was in relation to the union’s participation in the negotiations. According to the original text of the provisional measure, employees who received a salary equal to or less than BRL 3,135 or who had a salary equal to or higher than BRL 12,202.12 could enter into individual agreements.

As per the text approved by the Congress, individual agreements may be entered into by employees who receive a salary equal to or lower than BRL 2,090, provided that the employer has earned, in 2019, gross revenue higher than BRL 4.8 million, or BRL 3,145, when the employer recorded gross revenue equal to or lower than the mentioned amount. The employee who receives a salary equal to or higher than BRL 12,202.12 can enter into an individual agreement in any case, regardless of the company’s revenue.

For employees not included in these groups, collective bargaining is required, except in case of reduced working hours and wages up to 25%.

The senators also removed from the text two articles of the provisional measure, inserted by the Chamber of Deputies, considering that they have no relation to the original matter, namely articles 32 and 27, which provided for changes in the working hours of bank’s employees and loans to public servants, respectively.

Our Labor Team remains at your disposal to clarify any doubts.