4/8/2020
Due to the state of public calamity decreed by the Federal Government regarding the pandemic caused by COVID-19, labor relations were severely affected, causing non-essential business activities to be suspended, thus bringing uncertainties as to the maintenance of jobs and income for workers.
To help companies deal with the crisis, the Federal Government instituted through Provisional Measure 936, the Emergency Employment and Income Maintenance Program, with the purpose of ensuring the maintanance of jobs and income by authorizing the proportional reduction of shift or suspension of employment contracts
However, a preliminary decision issued on April 6 by Minister Ricardo Lewandowski, of the Supreme Federal Court (STF), understood that MP 936 would be unconstitutional in allowing individual negotiation (directly with the employee) to reduce wages, by whereas the Federal Constitution requires the Union to participate in this type of agreement.
As a result, the minister determined that “individual agreements to reduce working hours and wages or temporarily suspend employment contracts […] must be communicated by employers to the respective union”, which may initiate collective agreement. If the parties do not reach an agreement, the salary reduction cannot be implemented.
Minister Lewandowski’s decision affects the main aspect of MP 936, which was precisely the authorization so that the salary reduction or the suspension of contracts could be negotiated directly with the employee, without the need for union participation.
The direct action of unconstitutionality is scheduled for April 16, when the ministers will decide whether MP 936 is, in fact, unconstitutional or not.
Until the STF collegiate decision is rendered, the validity of MP 936 is suspended and should not be used as a basis for salary reduction or suspension of employment contracts.
The Labor and Employment team of L.O. Baptista is following all the decisions closely and remains available to advise clients on this and other matters.
