Brazil’s labor reform is being overhauled by the courts

Changes to Brazilian labor laws have been on the agenda ever since the beginning of the Michel Temer government in August 2016, after the contentious impeachment of Dilma Rousseff. In the past three and a half years, these rules have been altered to a greater or lesser extent, from the approval of sweeping labor reform in 2017 to the Economic Freedom Law of 2019, which increased flexibility for employers and gave more power to private contracts.

But the history of workers’ rights in Brazil begins in the 1930s, during the first term of President Getulio Vargas. It was then that the analysis of all labor protection rules began.

In 1943, with Vargas having established a dictatorship, the result of these debates on workers’ rights culminated in the so-called Consolidated Labor Laws (CLT), which unified all the rules concerning labor rights into a single document. According to President Vargas, the CLT represented the “economic emancipation of workers,” as the legislation was designed to protect employees at a time when their employers held excessive power. These rules largely remained in place until recently.

Returning to the 21st century, the idea of a broad labor reform faced a lot of resistance from public opinion and trade unions. However, with the worsening of the economic crisis, changes to legislation were reluctantly accepted under the promise that they would bring employment along with them.

The fulfillment of this promise has been extremely slow. Up to September, Brazil created just over 700,000 jobs. The current unemployment rate is 11.8 percent, meaning 12.5 million Brazilians are out of work.

Since its approval, the 2017 labor reform has been going through several changes and ratifications in...