Brazil's new government, in office since May, has promised a major overhaul of the country's antiquated and highly bureaucratic labour legislation.

Labour Minister Ronaldo Nogueira said on 20 July that the government would release a labour reform proposal to legalize outsourcing, which is restricted and frequently rejected by labour courts. 

The law currently prohibits outsourcing for anything other than “non-essential” jobs, such as cleaning and transportation services. And there is huge legal uncertainty surrounding the definition of “non-essential” activities, with many legal challenges resulting in differing judgments from regional courts. Failure to comply with the law results in the presumption of an employment relationship between the worker providing outsourced services and the service user — except in the case of “temporary work” as defined by Law 6019 of Jan. 3, 1974.

With the labour reform, the Government of Michel Temer aims to bring more legal certainty for labour contracts and simplifying legislation, avoiding multiple interpretations. The Minister of Labour indicated that he would submit a package of proposals for labour reform, including outsourcing, to Congress by December.

The entities that represent the service sector in Brazil support the move. In the opinion of Vander Morales, President of the Fenaserhtt and the Sindeprestem, the National Federation and Union of Outsourcing and Temporary work in the State of São Paulo, respectively, the news is good for the country. "We can reduce the informality to expand the number of hires in this sector, eradicate precariousness, reduce turnover, increase the expertise of businesses and workers" said Morales. He also stressed the importance of maintaining labour rights: "Any benefit gained by workers must be preserved. We are in favour of a law to bring legal certainty and to respect the commitments between the unions and outsourced workers. From this, we have businesses and skilled workers and, consequently, better wages. It is the progress that the country needs. "

A previous Bill 4330/04, reforming the law on outsourcing, took ten years to be passed by Congress and stalled in 2014 when it went to the Senate, as the president of the Senate opposed it.