Daily News

View All News

Brazil – After a long delay, vote on outsourcing legislation expected next week

17 April 2015

After more than 10 years of legal uncertainty, Brazil’s Trade Union of Human Resources, Temporary Work, and Outsourcing (FENASERHTT) and the Trade Union of Outsourced and Temporary Employment Services for São Paolo (SINDEPRESTEM) have voiced their support for the adoption of a regulatory framework for the outsourcing sector.

Vander Morales, President of FENASERHTT and SINDEPRESTEM, commented: “Outsourcing can no longer live with the absence of a regulatory framework. The legislative vacuum affects the entire production chain, including the workers.”

This outsourcing legislation is very important to staffing firms operating in Brazil given that, because temporary assignments are limited to three months (with one extension permitted for no longer than an additional three months), many staffing firms supply complementary outsourcing services to clients alongside their temporary staffing services.

The basic text of bill PL 4330/2004, which was first tabled in 2004, was approved earlier this week. A final vote has been set for 22 April 2015, as there are still parties and social partners who want to make amendments to the bill.

The bill looks to overturn existing legislation (Precedent 331) that limits the use of outsourcing to non-core business functions.

FENASERHTT and SINDEPRESTEM estimate that there are currently 12 million Brazilian workers employed in an outsourcing capacity.

While opponents of the new bill disagree, the unions are confident that the legislative changes will provide extra protection for workers, as client companies become jointly liable when outsourcing companies fail to meet labour standards. 

The unions also feel that the legal uncertainty caused by the absence of a regulatory framework is the primary cause of the high churn rate in the sector. With unclear interpretation surrounding what constitutes “core business” functions, companies have been able to break contracts and dismiss workers with no legal consequences.

The new legislation will also ensure that outsourced workers have the same rights and benefits as workers covered by collective bargaining agreements. The level of remuneration will be linked to the worker’s specialism/skill level.