Government aims to cut red tape by altering labor regulations

. Aug 02, 2019
Government aims to cut red tape by altering labor regulations Photo: Marcos Corrêa/PR

The Jair Bolsonaro government’s economic team—led by the ultra-liberal Economy Minister Paulo Guedes—set out some fundamental pillars at the beginning of the year around which its work has been centered. The first is to reshuffle Brazil’s macroeconomic environment by way of sweeping reforms to the pensions and tax systems. Another is to reduce the size of the state, selling off public assets in a bid to cut costs. And finally, the ministry seeks to slash bureaucracy for the private sector, to create a “pro-business” environment which could attract investments.

</p> <p>In the latest step toward reducing <a href="">bureaucracy</a>, the government has announced it will make wholesale changes to a set of rules regulating workplace health and safety, theoretically making things easier for employers.</p> <p>Brazil is notorious for its love of red tape. Simple administrative tasks can often be subject to byzantine requirements and inexplicable delays. The typical example is the phenomenon of the &#8220;recognized signature,&#8221; a process which involves paying a notary to attest to the integrity of one&#8217;s own signature for use on official documents. Legislation from last year removed any requirements for recognized signatures by government agencies, but they are still commonplace in commerce registries and courts.</p> <p>Earlier this year, the government presented its so-called &#8220;Economic Freedom Decree,&#8221; which loosened several <a href="">requirements</a> for new companies to obtain operating licenses. Now, the Bolsonaro administration is going a step further in its bid to alter the so-called &#8220;regulatory norms&#8221; (NRs) concerning workplace health and safety, leading some to claim the government&#8217;s efforts to facilitate life for employers will worsen conditions for employees.</p> <p>There are 36 of these regulatory norms, containing a total of 6,800 rules to govern health and safety in the workplace. All companies with employees hired following Brazil&#8217;s Consolidation of Labor Laws (CLT) must abide by these regulations.</p> <p>As its reasoning for changing these rules—which do not require congressional approval—the administration stated that the current situation represented a minefield for businesses, leaving them open to several fines which could &#8220;reduce their competitiveness&#8221; on an international scale.</p> <h2>What has changed</h2> <p>In the first wave of changes, one NR has been scrapped, while another two have been altered significantly. The now extinct norm, NR 2, demanded that all new workplace facilities undergo an inspection from a labor supervisor before they may begin operations. The government claims that removing this requirement will reduce bureaucracy and state intervention in the private sector.</p> <p>NR 1, which includes general provisions for the rest of the norms, was altered to include new regulations on workplace training. Now, employees no longer need to receive paid training in case of changing jobs within the same professional activity, a change which—according to the government—will result in savings of BRL 25 billion over ten years.</p> <p>Another alteration to NR 1 involves the removal of obligations for small and very small businesses to have programs of environmental risk prevention and workplace health. Exceptions are made for companies which pose &#8220;chemical, physical, and biological&#8221; risks, defined by NR 4.</p> <p>By far the most controversial of changes came to NR 12, which contains safety rules for work with machinery and equipment. Eight million workplace accidents were registered in Brazil between 2006 and 2017, with machinery being the principal cause.</p> <p>NR 12 has not been updated since 2010, and the government believes that it is too complicated and hard to follow in its current state, as well as being out of line with international standards. The Economy Ministry foresees savings of up to BRL 43.4 billion for industries with the new changes, as well as an increase of between 0.5 and 1 percent in production. The animal protein sector alone has calculated cuts in expenditure of over BRL 5 billion.</p> <h2>What will change</h2> <p>According to the Special Secretary of Pensions and Labor, Roberto Marinho, reglementary norms 3, 9, 15, 17, 24, and 28 are the next on the agenda for changes. These cover a wide range of subjects related to workplace health and safety, including environmental risk prevention, the definition of insalubrious working conditions, oversight and penalties, and sanitary conditions at workplaces.</p> <p>Mr. Marinho cited NR 15—which governs insalubrious workplaces and activities—as one which is in great need for alteration, claiming that bathrooms in working facilities are subject to 42 different types of fines.</p> <p>Lawyer Caroline Marchi, of Machado Meyer Advogados, agrees. She told newspaper Valor that &#8220;some details are impossible to be followed,&#8221; such as the stipulation that bathrooms in rural workplaces must be of at least one square meter, with one bathroom to be made available for every 20 workers.</p> <p>&#8220;Companies need to get creative in order to try and follow the rules, and even so, many end up getting notified [of having committed violations],&#8221; she said.&nbsp;&nbsp;</p> <h2>Cutting the Brazil cost &#8230;</h2> <p>The government is adamant that labor regulations are stifling the competitiveness of Brazilian businesses on the international stage. The so-called &#8220;Brazil Cost&#8221; is a widely known phenomenon among global businesspeople, referring to the increased operating expenses of doing business in Brazil, which often reflects on the price of goods in the country.</p> <p>Roberto Marinho demanded change in norms, saying Brazil could &#8220;no longer live with anachronistic, bizarre rules which hinder and inhibit us.&#8221;&nbsp;</p> <p>According to the Labor Prosecution Office (MPT), the social security costs on workplace accidents added up to over BRL 100 million per year between 2012 and 2018.&nbsp;</p> <h2>… at the expense of workers</h2> <p>While Mr. Marinho has stressed that the regulation changes do not increase any risks to employees, associations of labor prosecutors are more skeptical.</p> <p>The National Association Labor Court Judges (Anamatra) and of Labor Prosecutors (ANPT) blasted the changes as &#8220;regressive.&#8221; &#8220;Any push toward revoking rules to prevent accidents and illness in the workplace, to the benefit of reducing production costs, is a step backward.&#8221;

Euan Marshall

Originally from Scotland, Euan Marshall is a journalist who ditched his kilt and bagpipes for a caipirinha and a football in 2011, when he traded Glasgow for São Paulo. Specializing in Brazilian soccer, politics and the connection between the two, he authored a comprehensive history of Brazilian soccer entitled “A to Zico: An Alphabet of Brazilian Football.”

Our content is protected by copyright. Want to republish The Brazilian Report? Email us at