BRAZIL - THE LABOR REFORM: WILL IT HARM THE WORKER’S CONDITION?

Last Friday, April 28, we had a general strike in Brazil, led by the Central Workers’ Union (CUT) and the Workers' Party (PT). This kind of strike had not been occuring since 1996, and has been another mote of discord between the various societal and political groups.

Firstly, it should be enhanced that this general strike has been used mainly by leftist parties and movements, especially the PT and the CUT, to destabilize political power and preserve its influence on workers.

Secondly, we must remember that this labor reform was passed by a majority in the Chamber of Deputies, but it still has to go through the senate and finally be ratified by President Michel Temer.

Now, the prime question one may arises is what rights will the worker lose? None! Yes, in fact, this whole frenzy about this reform is only an exaggerated hysteria, mainly fueled by the PT and CUT, because they realize their sphere of influence tends to decreasei n the coming times.

The new law will in fact modernize labor relations and follow the trend of other countries, with much more developed labor laws. Nowadays there is the compulsory union contribution (salary withdrawal). This sort of “contribution” has in fact, run its course. Contrary to what common sense may radiate to us and which is publicized by some, the less unionized countries are those in which the workers’ wage are higher.

The vacation issue is an example of how trade-unions and their acolytes seek to mislead citizens. What will happen after this reform comes into force is that the employer and the worker can enter into an agreement to divide vacations. This can be beneficial for both sides.

Wages, vacation, Christmas bonus - there isn’t any change in values, and everything the employer gives extra to the employee (performance bonus for example) can become a bonus, without this being incorporated into the pre-determined wage.

Unemployment insurance remains, except in a situation where there is agreement between the employer and the employee to leave the company, and in which the severance pay fund fine is divided.

With the planned reform, you can still fall short of expectations, but it is necessary. Despite the prospect of improvement, it would have been vital first to promote tax reform.

Miguel Verde - Senior Consultant, Professor of International Relations