Browse through brief employment and labor law updates from around the globe. Contact a Littler attorney for more information or view our global locations.

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Restriction on Waivers of Rights

New Legislation Enacted

Authors: David Carvalho Martins, Partner and Head of Employment, and Maria Beatriz Silva, – DCM | Littler

With the termination of an employment contract, there was a common practice where parties could agree to waive certain rights (remuneration, vacation days, allowances, etc.) by stating that “there is nothing more to receive or to be paid from X or Y.” With the enactment of the Decent Work Agenda (DWA), which is effective as of May 1, 2023, such practices seem to have been limited. Under the DWA, such waivers of rights are no longer generally allowed, unless through an agreement approved by the court. However, the law is ambiguous as to whether the restriction applies before or after termination.

New Regime for Trial Period

New Legislation Enacted

Authors: David Carvalho Martins, Partner and Head of Employment, and Maria Beatriz Silva, – DCM | Littler

On May 1, the Decent Work Agenda was enacted, which amongst other things, introduced new provisions concerning the trial period. Specifically, the employer is required to inform the employee about the duration and conditions of the trial period. If the employer fails to do so within seven days from the execution of the contract, there will be a presumption that the trial period is excluded from the contract, unless the parties specifically stipulated otherwise.

Additionally, the 180-day trial period for first-time job seekers and the long-term unemployed is reduced or excluded, depending on whether the duration of the previous fixed-term employment contract with a different employer was equal to or greater than 90 days. However, the trial period is reduced depending on whether the duration of the professional traineeship with positive evaluation for the same activity and different employer was equal to or greater than 90 days during the last 12 months. (The employee must provide evidence of the positive evaluation.) Finally, if a contract is terminated after more than 120 days and during the trial period, it must be made with a minimum notice of 30 days.

A New Prohibition on Outsourcing?

New Legislation Enacted

Authors: David Carvalho Martins, Partner and Head of Employment, and Maria Beatriz Silva, – DCM | Littler

With the enactment of the Decent Work Agenda, which is effective as of May 1, 2023, outsourcing services (seemingly) are prohibited where such services were being provided by an employee whose contract was terminated in the previous 12 months due to a collective dismissal or the elimination of the position. However, the law is not clear whether outsourcing is lawful before the termination. For example, a service provider is hired under an outsourcing regime and, while working with the remaining employees, the company determines that such employees may be subject to redundancy. It has been argued that such prohibition of outsourcing may be deemed unconstitutional. In such regard, we must wait and see.

Workers Compensation Fund - Suspended or Extinguished?

New Legislation Enacted

Authors: David Carvalho Martins, Partner and Head of Employment, and Maria Beatriz Silva, – DCM | Littler

The Decent Work Agenda created a new rule on workers compensation funds. As of May 1, 2023, employers are no longer required to (i) provide for admission to the funds, (ii) communicate such admission, nor (iii) pay into the workers compensation fund (1% of base remuneration on a monthly basis). Such obligations are suspended and will be extinguished in 2023. Employers should be on alert, however, on how they will be reimbursed of such payments made. A new law is expected.