It is common knowledge that the Government has reported several changes to be made in the labor area. One of them, which we think has a great impact on companies, is the provisions of collective barganing, in the granting of labor benefits or agreements. Prior to the reform, the provisions of the Conventions had no term pursuant to Precedent 277 of the Labor Appellate Court, and would only be modified by a new collective bargaining agreementand/or, in many cases, the benefits were considered to be incorporated into workers’ rights. Since the reform, the provisions are valid for two years, remaining in force until a new convention is reached, and in case they are not ratified, concessions or benefits cease. The reduction of costs and expenses as well as litigation were the benefits of this change brought about by labor reform. The theme has been discussed under the so-called Ultrativity of collective norms, which allows the agreement between the parties to overlap legislation.
We invite you to understand some more about the subject, and the requirements of human resources, people management and other related areas, to be prepared for future discussions with the unions, in case there is eventual labor change.
Is Ultrativity of the collective norm an advantage or disadvantage for employees and company?
Much is debated about the temporal efficacy of collective norms. Such discussion is ancient and also permeates the realm of law terms because the application of a collective rule provides for specific rights of a particular category; that is, the collective rule is intended to complement rules already provided for by the law or to provide for specific rules that are not delimited by law. What does that mean? Is the employer not subject to the application of the collective rules? Obviously, every employer is subject to the application of the provisions provided for in a collective rule, and there is even supervision as to compliance with such rules.
But how long can the employer be required to abide by such rules?
According to article 614, §3 of the CLT – The Brazilian Labor Law Decree – ultractivity and collective rules may not be in force for more than two years. However, the Federal Government has submitted a proposal for a change in labor reform to admit collective norm ultractivity.
The fact is that there are impediments to assign collective rule for more than two years. It is so due to the fact that a law effect would be attributed to the collective rule, for its validation for an indefinite period; another aspect would be the definitive inclusion of rights to labor contracts; that is, to grant the guarantee that, even after the end of the term of the collective rule the employee remains entitled to negotiated rights.
It so happens that collective norms are drafted after discussions between unions and companies of a certain category; therefore, they are the result of adjustments between employee and employer representatives in the face of a financial legal reality at that time and not of a past situation.
Remarkable is the risk of loss to the employer, which may even discourage new collective agreements. Fact is that the hiring of labor by companies is directly linked to the economic political scenario of the period, involving not only Brazilian but also global issues and, precisely in this context, ultractivity of the collective norm is regarded as unfeasible, and may even cause an increase in the number of layoffs.
On the other hand, employees may also be harmed by collective standard predictions that are no longer part of their current reality and that are also not consistent with the provisions of law. The transience of the collective norm must be preserved to ensure that the parties have the freedom to maintain adjustments made there or discuss them again.
We may provide an instance: some clauses of collective norms were rediscussed with the change of the modality of face-to-face to the remote work settings, in several segments. The inalterability of the norm in such a condition is proven detrimental to the parties.
Ultractivity in a rigid way does not represent an advantage, nor does it provide assurance to the employee and the employer, because the objective of labor legislation is at all times to avoid abuse by the employer and the protection of employment, which does not occur when the validity of a standard that does not reflect the current context of work is maintained.
Eventually what could be accepted is the conditioned ultractivity; that is, the extension of the term of a certain collective rule would be allowed, in specific cases and for a specified period, aiming at the minimum imbalance in the relationship between the parties.
For more information or assistance in the preparation of topics to be considered at the discussion table with the unions, or even for internal planning on possible concessions and benefits to be regulated by the conventions, contact our labor team who are available for meetings and to assist in the working groups involved with such theme.
For further information, contact Juliana Cerullo, Leading Attorney in Labour Law at Ronaldo Martins & Advogados: email@example.com.