Executive Order No. 936 (MP 926/20), published on April 1, instituted the Emergency Program for Maintenance of Employment and Income, with the objective of reducing the social impact of the public calamity declared after the covid-19 pandemic.
One of the measures brought in by MP 936/20 is the federal government's supplementation of the income of workers in the private sector, through the payment of the Emergency Benefit for Preservation of Employment and Income, in the cases of proportional reduction of work hours and salary or temporary suspension of the employment contract.
Employees who have received the emergency benefit will have temporary job security for as long as the reduction in work hours and salary, or suspension of employment, lasts, and for the same period after the reestablishment of work hours or resumption of the employment contract.
As an example, employees who have their work hours and salary reduced for three months cannot be dismissed without cause during the reduction period and the following three months, totaling a guarantee of six months.
The temporary employment guarantee does not apply to employees who resign or are dismissed for cause due to the commission of any of the serious forms of conduct described in article 482 of the Consolidated Labor Laws (CLT).
In the event of dismissal without cause during the period of stability, the employer must pay severance pay and compensation for the remaining period of the guarantee, in the following percentages of the salary to which the employee would be entitled:
- 50%: reductions in work hours and wages of 25% or more and less than 50%;
- 75%: reductions in work hours and wages of 50% or more and less than 75%; or
- 100%: reductions in work hours and wages of more than 75% or temporary suspension of the employment contract.
The provisional guarantee is initially aimed at maintaining existing jobs, since the increase in the unemployment rate is one of the inevitable repercussions of the coronavirus crisis in the Brazilian market.
The government estimates that layoffs could reach 12 million people without the measures provided for in MP 936/20, while, as a result of the emergency program instituted, the official estimate is that this number will be reduced to 3.2 million workers.
Moreover, the protection against dismissal without cause is a true counterpart to the sacrifice of the worker. After all, the proportional reduction of work hours and salary or temporary suspension of the employment contract, even with the receipt of the Emergency Benefit for Preservation of Employment and Income, will lead to a reduction in remuneration, which may prevent employees from honoring their personal commitments.
The government's objective with the payment of compensation in lieu of the provisional guarantee period is also to inhibit the unrestricted use of proportional reduction in work hours and salary and temporary suspension of employment contracts, since there will be considerable costs with dismissing employees who are fit within these two scenarios.
On the other hand, the setting of percentages that limit the replacement compensation by MP 936/20 may be seen as a way to prevent companies from feeling discouraged from adopting the measures instituted in the government's emergency program, unlike the other provisional employment guarantees, such as those arising from workplace accidents or those to which pregnant employees are entitled: both guarantee employees full payment of the remuneration that would be due.
Considering the economic impacts of the coronavirus and the uncertainties regarding the normalization of activities in Brazil, it is likely that imposition of a single form of compensation would lead companies to lose interest in implementing even the most moderate alternatives provided for in MP 936/20, due to fear of receiving such an aggressive penalty.
With the relaxing of the compensation according to the percentages of the reduction in salary and work hours or temporary suspension of employment contracts, companies may structure their contingency plan according to their capacity to bear the consequences of any dismissal without cause during the course of the provisional guarantee period.
It is important to mention that the CLT, in paragraph 3 of article 611-A, already established the need to provide for the protection of employees against dismissal without cause during the term of the collective bargaining agreement when a provision is agreed upon that reduces salary or work hours. However, in the event of a reduction in work hours and salary through collective bargaining, with the supplementation of salary through the receipt of the Emergency Benefit for Preservation of Employment and Income, the provisional guarantee provided for in MP 936/20 should be observed, as it is a more specific and more beneficial rule for the worker, which extends the protection ensured in the CLT for the same period of time after the term of the collective bargaining agreement.