Government issues measure to facilitate rehiring

Work: Brazilian government issues measure to facilitate rehiring

The federal government published a new measure allowing businesses the opportunity to rehire employees within 90 days of dismissal, which will be in place for the duration of the current state of calamity in Brazil. Previous regulations required employers to wait for at least 90 days before being able to rehire employees. This rule was seen by some as a natural deterrent against mass firings during the Covid-19 pandemic, as companies would need to reopen hiring processes once they resumed operations.

Now, however, companies will have more flexibility to fire employees and bring them back in the future once conditions improve, which in turn could lead to employers opting to dismiss workers more often, instead of keeping them on their payroll on reduced salaries.

As previously reported by The Brazilian Report, unemployment rates stabilized in the third week of June for the first time since figures began to rise in April due to the Covid-19 pandemic. Yet, laxer requirements for rehires could see tallies increase once again, with companies able to further cut costs without hampering their ability to reopen in the future.

It could also be argued that the new measure allows companies that already had to fire employees over the first months of the pandemic to now bring them back, as states begin to reopen their economies.

The rehire offer will have to follow the same compensation as the original terminated contract. Employers may also reach collective bargaining agreements for the reduction of salaries among employees.