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Labor rehiring on economic recovery: find out what Ordinance No. 16.655 says

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In July, the Secretary of Social Security and Labor authorized, via Ordinance n 16.655, that companies that dismiss workers without just cause during the pandemic (edited through Legislative Decree No. 06 of 2020) as a result of the coronavirus, may re-hire these professionals without facing penalties.

The Ordinance states that the re-hiring, within 90 days, of workers previously dismissed will not be considered fraud, as long as the previous salary, position and benefits are maintained.  Re-hirings with any changes will only be allowed through collective bargaining agreements with unions in the category.  That is, if a company wants to dismiss and rehire an employee with a lower salary, it will need permission from the union.

With the Consolidation of Labor Laws – CLT, in cases of dismissals without just cause, a company could not rehire the worker for 90 days under penalty of fraud.  However, at this time of high dismissals, as a result of the coronavirus pandemic and to motivate companies to rehire, the government has decided to ease this rule for the duration of the pandemic, or until the end of the 2020 year. 

Weverton Coutinho, personnel department analyst at Drummond Advisers, analyses how the new measures will affect the current corporate market in Brazil, “with the heating up of the economy we have identified in this law a solution for entrepreneurs, who want to maintain previous work-flow, without having to retrain employees and develop them according to the company’s DNA”.

 “Employees who already know the company would come back to their positions knowing how to deal with products and services. Thus, meeting the immediate need to resume billing, leveraging this quick return to the market”, added Weverton.

Another initiative from the government to maintain jobs and income came in August with Decree 10.470/20, that extended the duration of work-contract suspension and proportional reduction of wages and hours.  With the new extension, employers have the ability to suspend a work contract and reduce an employee’s wages and hours for up to 6 months – 180 days-, or for the length of the pandemic.