Insper’s webinar discusses the impact of COVID-19 on labor and employment relationships

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The first in a series of virtual seminars addressed labor relations’ challenges and paths forward in this new scenario


On April 1st, we held the COVID-19 Labor Aspects webinar. It was the first in a series of virtual seminars whose first phase consists of 10 editions that discuss the impacts of the new coronavirus in several areas. Finance, entrepreneurship, law, and healthcare are among them.

Fernando Peluso and Raíssa Tokunaga addressed the challenges and paths forward for labor relations in this new scenario, considering the immediate impacts and reflexes for when the pandemic has been overcome.

The first issue discussed by Fernando Peluso was related to wage cuts. “Is it possible to apply article 503 of Brazilian Consolidation of Labor Laws (CLT, for its acronym in Portuguese), which states that salaries can be reduced by 25% under force majeure, through individual agreement?

Would this article have legal validity considering Article 7 of the Brazilian Constitution? Our understanding is that it does not. Article 503 was edited in 1943, with the CLT itself, while the Constitution is subsequent. Secondly, the Constitution has hierarchical power over the CLT,” Fernando observed.

Besides, Fernando addressed questions on stability during wage-cut periods, the possibility of reducing hyper-sufficient employees’ salaries through individual agreements, and whether wage cuts affect only fixed compensation or the variable one as well. The professor also spoke about paid leave, postponement of collections for the Brazilian Guarantee Fund for Length of Service (FGTS, for its acronym in Portuguese), and the characterization or not of COVID-19 as an occupational disease.

Raíssa Tokunaga spoke about the concept of Working from Home (WFH) present in Provisional Presidential Decree (MP) no. 927 and the need or not to control working hours in this modality. “We had concluded that the best legally, if possible, is that companies that already control employee working hours keep this control, even if they have implemented WFH. The reason is that it brings increased security”.

The professor also analyzed whether WFH can be invalidated if companies do not discuss with employees, within 30 days, the issue of expense-costing, besides the possibility of cutting vouchers for transportation, meals, and food.

At the end of the presentations, Fernando and Raíssa answered questions sent by webinar viewers.



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