Impacts of labor reform: Unions

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Impacts of labor reform: Unions

Table of Contents

Since the sanction of the Labor Reform, we have been publishing texts weekly to help understand and clarify the many controversies that have been generated by it. Last week, we dealt with vacation rights and this week we are going to talk about changes related to unions, so that you can clarify your doubts.

It is worth remembering that the reform came into force on November 11, 2017.

Collective Agreements are worth more than the legislation itself

Last week we dealt with the subject of collective and individual agreements that are worth more than the legislation in some cases, regardless of whether they are more beneficial to the employee than the legislation, as it was until then. See our post here and understand when it happens.

Some issues previously negotiated with the unions can be dealt with directly between the company and employees:


The CLT imposed that employees who had worked for more than a year for the company and were dismissed should have the termination of their contracts approved by the union or the Ministry of Labor. With the reform, this process no longer needs to be done and the employee can only sign his term of termination at the company itself to be able to enter unemployment insurance and withdraw his FGTS.

This change makes the process faster, which is good for both the employee and the company.

Therefore, we recommend that the termination calculations are presented and explained to the employee to avoid any misunderstanding. As there will be no more checking of calculations made by the union, the employee can file a lawsuit simply because he already assumes that he has been cheated. Therefore, explaining the calculation can avoid this type of labor liability.

Mass Dismissal

Although there is no legal determination requiring mass layoffs to be approved by unions, labor lawsuits have introduced this requirement in recent years, making it a common practice to avoid problems with justice.

With the reform, it is clear that mass layoffs do not need to be approved by the union or even by the Ministry of Labor, and must be negotiated directly with employees. This makes it easier for companies that end up needing to make this type of decision, usually at a difficult time, and already have high costs with it.

Despite the flexibility, it is recommended that the company try to think about the social impact that will be caused by a mass layoff and try to alleviate it by collaborating in some way with the employees it is firing, extending its health plans for some time, example.

Positions and salaries

Today's legislation states that jobs of equal value must have the same pay and the same position. Therefore, people with the same function and position could not, under any circumstances, receive different amounts. In addition, the job and salary plans, according to the CLT, must be approved by the Ministry of Labor and the union.

The reform text changes the understanding of what works of equal value are, explaining that from then on they are understood as those made with the same productivity and technical perfection by people who have:

  • No more than 2 years of experience time difference in the role; and
  • No more than 4 years of company time difference.

As a result, the criteria for matching are much more difficult to be validated by those who do not follow the employee's daily work, giving the company the flexibility to establish job and salary plans that adjust to its needs and expectations. These plans will now no longer need to be approved by any body, which also brings an extra facility to the company.

Many controversies have arisen with this issue, as there are those who understand that this can cause companies to lose their criteria in the definition of jobs and salaries, which can even negatively impact the motivation of employees. If the company, on the contrary, develops detailed job and salary plans and career plans that are clear regarding its expectations of skills, competences and productivity, the tendency is that it will be easier to manage this tailor made policy and the employees will have even more motivation to develop, increase their productivity in order to be recognized and grow professionally within the company.

Changes in the payment of contributions

The payment of the union contribution is mandatory by law, in the amount of 1 working day per year. With the reform, this contribution becomes optional, and it is up to the employee who is interested in contributing to his union, to express himself clearly about it.

Of course, at least in the beginning, although the law is clear, it is good to formalize whatever the employee's decision on whether or not to pay the contribution, asking everyone to write letters expressing their interest in paying or their opposition to payment, just to avoid problems later.

The payment of social security contributions remains mandatory only for those who are members of the union, and in order to avoid payment, a letter of opposition must also be made.

This change is beneficial to both companies and employees, since it relieves the payment to unions, which sometimes do not do their jobs well. For unions it is a difficult change as they will likely no longer have much of their annual income. At the same time, it is an incentive for them to strive to make a difference and really fight for the rights of their categories, thus having their importance perceived and guaranteeing voluntary contribution.

Employee representation

Employees will have the right to choose from 3 to 7 representatives – according to the size of the company's staff – to represent them in negotiations with the employer. These representatives do not need to be union members and must continue in the exercise of their functions during their term of office.

They have stability, that is, they cannot be dismissed arbitrarily until one year after their term. The commission of representatives can make agreements with the company, with the participation of the unions.

There is no obligation for this commission to be created; the law mentions it more as a recommendation to facilitate negotiations. Even so, our recommendation is that the company should encourage the creation of this commission so that it is made up of engaged employees who can actually negotiate with the company on behalf of the employees. As there is stability for those who are in this position, this incentive serves to prevent people who are incapable and of no interest from being part of the commission just to gain stability.

Expiry of collective agreements and conventions

Currently, negotiations made in collective agreements or conventions are valid until there is a new rule in relation to the same subject, which replaces it. Therefore, HR and DP professionals must have a broad knowledge of not only labor legislation, but all the collective agreements and conventions of the company in which they work, or at least study hundreds of roles each time specific and unusual situations occur. , to make important decisions regarding that situation.

With the reform, the rules established in a collective agreement or convention will only be valid during the stipulated period of validity, and can no longer be applied until a new rule is negotiated, collectively or individually, for the same subject. This will certainly make HR and DP professionals' daily lives much easier, reducing the need to have to know all the historical decisions on each subject.

What is the result of these changes?

It is clear that the change frightens the unions, which find themselves losing a large part of their income. At the same time, it is important to realize that they will now be encouraged to effectively fulfill their roles, in order to receive contributions from anyone interested or see value in their struggles and achievements. With a dialogue with its affiliates in the search for a more active participation with workers, the unions will need to seek visibility to guarantee resources.

If, on the one hand, they are losing revenue and eventually strength to fight due to the decrease in their income, on the other hand, they have the power to make agreements that are worth more than the law itself and thus, eventually, achieve recognition of their category and as a result, take back part of your income.

Some forms that can be used by unions to ensure greater and more immediate membership membership are associations with educational, health and leisure institutions, in order to offer, through membership, benefits to their members. The creation of social programs, such as training, relocation and family health programs can also help.

For the time being it is still very difficult to know exactly what to expect in relation to these changes on the unions, not least because it is possible that there is a provisional measure to resume the mandatory union contribution. Once again, the reform attempt to establish fairer relations between employees, companies and unions is very clear.


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