With the end of the validity of Executive Order 927 (MP 927) on July 19, 2020, employers can no longer use its provisions. Within the time frame of 60 days, as of July 20, the Brazilian Congress may issue a Legislative Decree to govern any impacts resulting from the loss of validity of MP 927.

In paragraph 11 of article 62 of the Federal Constitution, the legislator provided that if the Brazilian Congress does not issue a Legislative Decree, "the legal relationships created and resulting from acts performed during its validity shall continue to be governed by it.”

In other words, the legal relationships arising from MP 927 will remain valid until the end of the state of public calamity recognized by Legislative Decree No. 6/2020, in principle, December 31 of this year.

Individual agreements

According to MP 927, during the state of public calamity, employers and employees could enter into individual written agreements to ensure the maintenance of employment. This agreement would control over the law and agreements and/or collective bargaining agreements, provided that constitutional guarantees are respected.

Despite the controversy surrounding this measure and its effectiveness after the loss of the validity of MP 927, we believe it is defensible to maintain the measures agreed upon individually with employees until the end of the state of public calamity, subject to the constitutional provision mentioned above. However, companies will no longer be able to use such measures after the executive order has expired, failing which the act will be null and void.

Acceleration of holidays

MP 927 also authorized the acceleration of holidays unilaterally by the employer in cases of civil holidays or, with the individual consent of the employee, in the case of religious days.

Faced with the loss of validity of MP 927 and the withdrawal of its rules from the legal system, employers may no longer advance the enjoyment of holidays, except, however, per agreement via collective bargaining rule with the labor union of the category. Holidays already advanced may be offset, even if the actual date of the holiday occurs after the loss of effectiveness of MP 927.

Vacations

The rules for granting vacations, both individual and company-wide, have also undergone significant changes with MP 927, such as the acceleration of individual vacation periods, forms of payment, acceleration of the vacation announcements, etc.

After the loss of validity of MP 927, the employer will no longer be able to conduct new acceleration of vacation or disrespect the deadlines for communicating on whether they are granted.

In the case of vacations granted during the term of MP 927 and that had payment of the constitutional one third premium scheduled by the date of payment of the 13th salary, employers will not need to revise the procedure and immediately pay the corresponding amount. Likewise, vacation days advanced will be valid, even if referring to future accrual periods.

Telework

The specific regulations of the Consolidated Labor Laws on the subject had been relaxed by MP 927. We believe it is not necessary to draw up a mutual agreement and record it as a contractual amendment for the maintenance of teleworking employees, although the initiative is recommended to guarantee even more effectiveness on a tailor-made basis, as long as this condition only last during the period of public calamity.

In the case of new agreements aimed at changing the employee's working arrangements to teleworking, individual agreements and the rules established in the Consolidated Labor Laws will have to be applied.

Occupational health and safety

MP 927 also made compliance with occupational health and safety rules more flexible, such as: (i) suspension of the mandatory medical examinations conducted upon hiring and periodically, which may be conducted within 60 days of the end of the state of public calamity; (ii) waiver of the examination upon dismissal in the event that an occupational medical examination has been conducted less than 180 days ago; (iii) suspension of training, which may be conducted within 90 days of the end of the state of public calamity; and (iv) maintenance of the CIPA, even if the term of office are ended, and suspension of the electoral processes in progress.

Unlike the scenarios mentioned in the previous topics, this is not a completed legal act, but possible lawsuits on the grounds of omissions by employers. It occurs that, once the condition that authorized the above-mentioned suspensions no longer exists, that is to say, MP 927 itself, companies must adopt the procedures and legal deadlines established in the Consolidated Labor Laws and in regulatory rules.

As for the CIPA, we believe that the employers who chose to extend the terms of office of the then sworn-in executive board and suspend electoral processes must resume the procedures necessary for the new board to take office.

Hours bank

Considering the impossibility for some establishments to continue their operations, MP 927 authorized the institution of hours bank for offsetting within up to 18 months from the date of the end of the state of public calamity.

Since, according to the rules of MP 927, it would be necessary to sign a formal individual agreement to establish an hours bank, we believe that a completed legal act has been formed that has in its essence a provision for prospective effects: use in the abovementioned period.

Thus, not only because of the constitutional provision presented in the introduction of this article, but also in order to maintain the balance of what was agreed upon, rule regarding use must be preserved.

FGTS

Another measure brought about by MP 927 to relieve companies' cash flow was suspension of FGTS payments related to the March, April, and May 2020 periods, which were due in the immediately following month. It was also established that collection for these periods could be deferred in up to six installments from July of 2020, with maturity on the seventh day of each month.

Faced with the loss of validity of MP 927, employers who have chosen to defer payment thereof may continue to respect the payment dates provided for in the executive order.

Employees' work hours at healthcare facilities

Executive Order 927 also authorized health care professionals, pursuant to a written individual agreement, to work overtime beyond the legal and/or negotiated limit, including in the period reserved for rest periods between work days. The only exception was weekly paid rest of 24 hours, which had to be respected.

With the loss of validity of MP 927, it will be possible to maintain adjustments of these terms until the end of the state of public calamity, due to the completed legal act formed per the constitutional provision, provided that the agreement was entered into before July 20.

New agreements entered into after July 20 must be adapted to the Consolidated Labor Laws. The measures established by MP 927 may no longer be applied.