Government attacks labor reform to reinforce state ties

Committed to its interventionist economic agenda, the government of Luiz Inácio Lula da Silva (PT) insists on undoing the liberalizing acts of the governments of Jair Bolsonaro (PL) and Michel Temer (MDB). Although the strategy has yielded some setbacks to the Planalto – such as the defeats in the attempts to change the Sanitation Framework and to reverse the privatization of Eletrobras, which were barred by the Legislature – the intention is now moving forward, with the idea of ​​revoking points of the labor reform, approved in 2017 during the Temer administration.

The reform sought to privilege direct negotiations between employers and employees and inhibit an industry of labor lawsuits that overloaded companies and the Judiciary. The PT government, in the opposite direction, wants to reinforce the State’s constraints on labor relations and reestablish compulsory financing of unions by workers.

At the same time that it seeks to retreat in the modernization of labor laws, the Lula administration wants to lead the task of regulating new forms of work brought about by technological advances. In this discussion, the Minister of Labor, Luiz Marinho, even suggested that Correios could assume the function of transport applications if they leave the country. And it did not include delivery leaders in the working group that discusses the regulation.

Marinho, who had already labeled the labor reform as “a tragedy”, returned to the charge this month against the changes in the Consolidation of Labor Laws (CLT) and the Outsourcing Law. Marinho said, during the installation of the panel of the group that will discuss the regulation of applications, that the changes contributed to “employment precariousness and the disastrous growth of work analogous to slavery”, indicating the prospect of a review for the second half of the year.

Aware of the difficulties in repealing the labor reform in Congress, which has served as a buffer against revisionist onslaughts, the government base acts from the edges and managed, last week, to approve two bills in the Commission on Human Rights and Participatory Legislation that anticipate the purpose of amendment of the law.

Authored by Senator Paulo Paim (PT-RS), the first ends the possibility of terminating the contract by agreement between employee and employer and the second limits the duration of the part-time work contract to 25 hours a week.

Criticism of the labor reform reflects the government’s statist bias

In essence, the criticisms and initiatives reflect the statist perspective of the current government, which wants to link all situations in the labor market to the plastered model of the CLT and the old union structure, the original base of the PT.

The CLT, enacted 80 years ago, in the Vargas era, is still the main indicator of formal employment, with almost 42.8 million contracts, according to the General Register of Employed and Unemployed People (Caged).

Inspired by Italian fascist corporatism, the CLT responded to the need to regulate the capital-labor relationship at a time of rapid industrialization and urbanization. But since then, a lot has changed and the need for flexibility has become a recurring demand of the business community and society.

The reform of the Temer government, in 2017, was the main alteration of the CLT since its enactment. With it, some fundamental points were oxygenated. Collective negotiations between employers and employees gained more weight, which began to prevail over legislation. Also approved was the possibility of dividing vacations and intermittent work, a system in which the employee can work in specific situations, remunerated per hour worked.

Experts say that labor reform helped contain impacts of the pandemic

The Minister Marinho’s criticisms, in addition to going against the expectations of the business community, do not seem to corroborate with reality. Although it is difficult to quantify the benefits of the reform for the labor market, mainly because of the two-year gap between the pandemic, experts consulted by Gazeta do Povo say that the changes in the CLT were important precisely in reducing the impacts of Covid-19 on the economy.

“It can be said with certainty that, without the 2017 reform, the consequences of the pandemic for the labor market would be worse”, says economist Alexandre Chaia, professor at Insper and manager of Carmel Capital. For him, the minister’s criticisms are just “populist”, to please his base.

Chaia recalls that quality employment and remuneration do not depend on laws or decrees, but on countless factors, including economic growth. “The precariousness of employment is a reflection of the government’s inability to create a favorable business environment for generating investment”, she says.

Hélio Zylberstajn, a senior professor at FEA-USP and coordinator of the Salariometer at the Economic Research Institute Foundation (Fipe), sees “distortion and exaggeration” in the criticism. “Analogy to slavery is simply absurd”, says the economist.

He recalls that the International Labor Organization (ILO) itself concluded that the reform did not bring harm to the worker: “The union centrals denounced the country to the ILO twice, once after the enactment of the reform and another after the pandemic. the Brazilian government was acquitted”.

Labor reform discouraged litigation in court and created vacancies, says study

A joint study by economists from USP and Insper, from 2022, measured the benefits generated by one of the points of the labor reform. The new legislation established that the employee must pay the fees to the company’s lawyer, in case of defeat.

According to the study, the change discouraged legal actions, especially in cases where there is no certainty of victory, which reduced the cost of companies to open new vacancies.

The study calculated, through a sophisticated econometric exercise, a reduction of 1.7 percentage points in the unemployment rate and a 2% increase in the employment rate, which corresponded to the creation of 1.7 million jobs by 2022.

“There was a veritable industry of labor lawsuits that burdened companies and overloaded the Judiciary. The reform did not prevent claims, but it moralized the litigation system”, evaluates Zylberstajn.

For an economist, attacks on the reform are a “smokescreen” to rescue union tax

For Zylberstajn, the insistence in criticizing the labor reform is a “smokescreen” for the government’s intention to rescue the financing of the unions. The reform put an end to the union tax, a compulsory contribution made by all workers to their respective unions, in the amount of one day’s work per year.

To give the dimension of the “loss”, with the end of the compulsory nature of the collection of the unions from R$ 3.05 billion raised only from January to November 2017, before the reform, to R$ 65.5 million in 2021. President Lula mentioned, in defense of the revision, the “financial suffocation” of the unions after the end of the tax.

For Zylberstajn, compulsion would only make sense in a scenario of multiplicity and union democracy, where the worker chooses the union that represents him. This does not happen in the country, because here there is the so-called ‘union unity’ by category of work. “Currently we have a union monopoly with a captive market”, says the professor.

What is under discussion in the government is not exactly a union reform, but a way to continue financing the monopoly. In April, Minister Luiz Marinho told “Folha de S.Paulo” that it is “plausible” the idea that the tax be deliberated in a meeting of the categories, starting to apply to all workers, including non-union members. In other words, a disguised compulsion.

Criticized by the government, the Outsourcing Law gave legal security to companies

Other recurrent criticisms demonstrate the government’s difficulty in living in an environment of greater freedom in labor relations. One of them is the resistance to outsourcing, approved by the Legislature also in 2017, in the wake of the reform.

The law, which allowed companies to outsource any activity, as long as they guarantee the due protections to workers, continues to be distorted by the union narrative as a tactic to circumvent social rights.

The data show, however, that companies do not stop hiring to outsource. According to Fernando Peluso, a lawyer and professor at Insper, anyone who knows business management knows that there are activities that companies do not want and cannot outsource.

The law managed to regularize an existing situation, with visible positive impacts. “There was an endless discussion about the activities that could be outsourced. The regulation brought legal certainty to companies, with a direct impact on investment decisions”, he says.

Government wants strict regime for app workers

At the other end of the discussion of the so-called “precariousness of work” are technological changes, which pose greater challenges to the government than it seems to be able to face. In particular, work through platforms such as Uber and iFood.

There is a reasonable consensus among economic agents on the need to define some regulation of the new modalities. But the task is not simple. One of the paths, according to Peluso, would be a regulation similar to what has been done in European countries, such as England and Spain, where the law recognizes salaried and self-employed work, and adds a third intermediate model, which guarantees social benefits and pensions to the worker.

But, in a meeting on the subject, Minister Marinho said that offering only Social Security contributions to app workers “is too little” and that companies cannot make “extravagant profits” while there is “overexploitation of work”.

Imposing the CLT regime on app workers, however, is not the solution, mainly because the characteristics are different. Peluso recalls that they do not have fixed working hours and, above all, there is no subordination, since the worker can choose the service he wants to perform: “You cannot treat different people the same. That would make business unfeasible”.

Minister Luiz Marinho, meanwhile, considered the possibility of developing a service via Correios to replace Uber if the company decides to leave Brazil in response to regulation in the sector.

Also noteworthy was the fact that, when forming a working group to discuss standards for applications, the Ministry of Labor did not invite a single delivery leader. The 45 members of the collegiate are from the government, employers and trade union centrals.

Government pays little attention to real challenges in the labor market

Other aspects also divide specialists. For Hélio Zylberstajn, the regulation is even more complex. “Technological innovations have blurred the boundaries between production and consumption, which is why labor relations tend to be multilateral”. This means, for him, that in addition to the platform and the worker, the responsibility of commercial establishments and the consumer himself needs to enter into the equation.

Alexandre Chaia, in turn, argues that the government should just be the facilitator of the negotiations, boosting the development of the sector via the regulatory agency, since the dynamics of the job market tends to impose more and more questions to be evaluated.

In addition to technology and applications, Chaia recalls that changes in parameters and conditions, such as the home office – driven by the pandemic and which has become a trend – could also be on the agenda for discussions. “These are real challenges to be faced,” she says. Reality and transformations, however, do not seem to have priority on the government’s radar.