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Employment Contracts

contractBrazilian labour law is governed by the Federal Constitution, the Consolidation of Labour Laws (Consolidação das Leis do Trabalho) and the Civil Code which means that the area is extremely complex. Labour rights may also be regulated by collective agreements within a company. The law essentially favours the employee and workers have basic rights granted by the Brazilian Federal Constitution; for example minimum wage, maternity leave, risk premiums, family allowance and overtime compensation.

Types of work contract

A work contract does not have to be in a written form and an oral agreement is acceptable.

The most common form of contract is the General Work Contract (Contrato de Trabalho) which covers any and every type of job. This establishes that an employee should work eight hours a day, plus four hours on Saturday, to make up a 44 hour working week and that this arrangement should continue for an unspecified period of time.

The contract defines that the employee should have eight percent of their monthly remuneration paid into a government-controlled bank fund called the Fundo de Garantia de Tempo de Serviço – FGTS, upon which they can draw in the event of unemployment, illness or even to finance property purchase. It also ensures the employee the right to thirty days of paid vacation, as well as their monthly salary plus one third again, per calendar year, and a 13th salary on top of the twelve monthly salaries they earn throughout the year.

The Part-Time Work Contract (Contrato de Trabalho de Tempo Parcial) stipulates that the employee can only work up to 25 hours per week. Overtime is prohibited and there are special rules for vacations.

There is also a Contract for a Pre-Established Time Period (Contrato de Trabalho por Prazo Determinado). This contract is applied where the nature or character of the job suggests that the employee’s services will not be required after a certain, pre-established period of time.

This type of contract can also be used to employ someone on a temporary basis in order to decide whether they are suitable or not. The maximum period for which this type of contract can be implemented is two years, unless it is engaged in order to try someone out as mentioned above, in which case the limit is 90 days.

The only real difference between the employee’s rights under a Pre-Established Time Period Contract and under a General Work Contract is that under the first type, the employee suffers no penalty in terms of the amount to which they are entitled to from the FGTS fund upon termination of the contract at the end of the term. The employee’s rights to the 13th salary and holidays are calculated in proportion to the amount of time worked.

Due to the fact that Brazilian labour law tends to favour the employee, theoretically, if someone starts providing a service on a regular basis for another person or company, even though they have not necessarily been invited to do so, they have full employment rights and can demand such under the law, even though no work contract of any sort has been signed. Because of the law’s umbrella coverage and defence of the worker, there is therefore no set list of defined items which have to be included in a contract.

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