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Date: November 20, 2019
Posted by: CPDMA Team

MP 905 amends CLT and reduces the power of the Public Ministry of Labor

Provisional Measure (MP) No. 905, which created the green-yellow employment contract and is called the new labor reform, limited the work of the Public Labor Ministry (MPT). The million-dollar fines established for non-compliance with the Conduct Adjustment Terms (TACs) signed with companies have disappeared. Now the highest value will be R$ 100K. In addition, the agreements will be valid for only two years – until then, they were generally valid for an indefinite period.

The rule also requires that all amounts collected in fines and penalties imposed for non-compliance with a court agreement or TAC are directed to the Program for Enabling and Physical and Professional Rehabilitation, Prevention and Reduction of Work Accidents.

The penalties provided for TACs, according to the provisional measure, can only exceed the ceiling if the company fails to comply more than three times with what has been established or in cases where they deal with recognition of an employment relationship - in this situation, the fine can reach to R$ 10 thousand per employee. The text to have validity of law depends on the approval of the National Congress. The purpose of TACs is to correct irregularities committed by companies, before any legal proceedings, which could have amounts even greater than those involved in these agreements.

For failing to comply with a TAC, an electronics company that was investigated for allegations of bullying at its headquarters in the capital of São Paulo was forced to air a campaign worth R$ 5 million against this practice in the main newspapers and TV stations in São Paulo. He still had to pay R$ 5 million in collective moral damages, destined to at least five reputable social institutions, previously approved by the MPT.

On the other hand, a factory suspected of hiring a service provider that would practice labor analogous to slavery, for example, signed a TAC in the amount of R$ 5 million in fines with the MPT of São Paulo for breaching a previous agreement. The amounts were reversed in social projects.

The MP amends article 627-A of the Consolidation of Labor Laws (CLT) and provides for the imposition of fines provided for in article 634-A, both by the Public Ministry of Labor (MPT) and by the labor tax auditors, now linked to the Ministry of Economy. The classification of fines, the classification by economic size and the nature of the infraction must still be defined in an act of the Executive Branch. The values will be updated annually on February 1st.

For lawyer Cássia Pizzotti, a partner at Demarest Advogados, the establishment of deadlines and maximum values for TACs should provide more security for companies. “TACs serve to adjust the company's conduct and should not be used with the intention of punishment”, he says. According to Cássia, many terms were established with millionaire values, with no expiration date and with obligations that were often impossible to fulfill.

On the other hand, he adds, the fines imposed by labor auditors in their inspections were generally very low. They were calculated in Tax Reference Units (Ufirs) and reached a maximum of R$ 400. Now, says the lawyer, the MP grants equal treatment. “The MP brought important criteria for companies to understand penalties and risks”, he says.

The path chosen by the government to make these changes, however, can be questioned, according to lawyer Carla Romar, from Romar, Massoni & Lobo Advogados. “The labor reform, which passed through Congress, was heavily criticized. The MP, which practically promotes a new reform, may suffer even more criticism”, he says. However, he adds, if Congress deems it appropriate, it could be converted into law.

Despite the questionable approach, Carla considers the period of two years for the validity of a TAC to be reasonable. “Today there are companies that have to fulfill a certain obligation forever. The penalty can come at any time. Companies are tied down even if there are changes”, he says.

Regarding the fines, Carla says that “they talk about millions of reais as if it were an amount that could be paid at any time”. For her, companies often “find themselves cornered by the MPT and end up paying extremely high fines”. But perhaps these MP values, according to the lawyer, are not enough to achieve the purpose of the Public Ministry of Labor. “These values that are too low would be a reaction [of the government]”, he says.

Lawyer Juliana Bracks, from Bracks Advogados, considers the changes that limit the MPT's performance to be “very bad”. According to her, there is no need for an expiration date for the TACs. “These are conduct adjustments to comply with the law. So in two years there is no need anymore?”, he asks. For her, the situation would be different in the case of a change in law. It would be necessary, he adds, to readjust the TAC, as there have been changes.

Contrary to the changes, the Public Ministry of Labor issued Technical Note No. 1. In the document, signed by the Attorney General for Labor, Alberto Bastos Balazeiro, and other attorneys, the agency states that it is not possible to discipline deadlines and amounts by provisional measure. of TACs.

According to the note, considering that the purpose of MP 905 was, in fact, to limit the scope and effectiveness of the TACs signed by the Public Ministry, “such a rule would be diametrically opposed to the very objectives outlined in the 2017 Labor Reform, of reducing the filing of demands before the Judiciary, as any attempt to limit the scope and effectiveness of the terms of conduct adjustment signed by the MPT would result in the proliferation of labor lawsuits”.

The Public Prosecutor's Office also emphasizes that, as the TAC has the nature of a legal transaction, “the provisions and obligations contained therein are assumed of their own free will by those who sign it”.

Source: Adriana Aguiar via Valor Econômico.

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