II. THE GOVERNMENT ACTIONS

 

II.7 Reforming Labor Relations

Another group of Federal Government actions refer to the need of changing labor relations in Brazil. The change is necessary so that these relations adjust themselves to the new standards of negotiation between labor and capital, established by the country's present social, political and economic dynamics. Furthermore, it is indispensable to make the functioning of the institutions that act upon the labor market and also the labor law more appropriate to the requisites of an open, competitive and globalized economy. And, also, stimulate the transition towards a more agile, flexible and democratic bargaining system, in substitution of the present system, characterized as statutory, rigid and authoritarian.

What is intended is the implementation of a new group of regulations, in the context of a less interventionistic State, to regulate the conflicts between capital and labor and the functioning of the labor market.

The labor market institutions and labor relations in Brazil have been characterized historically by an intervenient and corporate state, by decentralization and atomization of the union structure, by the existence of admission and dismissal costs that do not stimulate the job growth and the adherence to juridical norms. The legalism, paternalism and denial of the capital-labor conflict through the State's control constituted strong elements of a regulatory system, that has become obsolete in front of social relations dynamics. The state intervention, by establishing discipline of the payment and employment conditions, reduced the role of the trade unions and induced employers and employees to seek solution to their differences within the State, which assumed the functions of regulating, granting rights and mediating conflicts.

The Federal Government understands that the basic principle for modernization of the labor relations in Brazil has to do with free convergence of interests, that seeks solutions to the conflicts instead of denying them or trying to dislocate them to the State's power. There is a desire for a democratic system that seeks solution to the labor issues through understanding and that extols equilibrium by not attributing excesses, to either the market or the State.

The State will remain with the attribution of reducing the degree of intervention, stimulating free negotiation between capital and labor, conducting the transition to a system of negotiation and assuring that the established rules are respected, guaranteeing the righteousness of the process, the fullfilment of the understanding and safeguarding the parties'rights. The Labor Justice will have a fundamental role in this context.

Free negotiation will permit the conflicts to be resolved directly by those that, due to the knowledge and experience of their realities, have greater conditions of solving them. And it will still give the workers greater control over the level of employment because, by enlarging the negotiation ground, the casting of wages and other labor conditions that result in unemployment can be avoided.

In order to reach these objectives, the Federal Government defined a group of reforms, among which can be pointed out the alterations of the 1988 Constitution and a new statutory labor law (a new labor code in substitution of the CLT). There is an intention of strengthening the labor unions, adopting union pluralism as a way of making employee representation more democratic, eliminating the compulsory contribution and establishing a rhythm and nature of transition to a less statutory system, allowing more negotiation.

The actions — some implemented, others being negotiated or studied — aiming at reforms are the following:

a) to modernize the labor legislation by deregulation of the Ministry of Labor's internal rules. Many of these measures, pertaining to the supervisional area, are already being implemented by the Deregulation of Administrative Labor Rules Program;

b) to introduce new forms of contract, making the labor law more flexible. In this sense, the Federal Government has sent the Congress a bill that foresees the enlargement of the limited duration contract's nature;

c) to promote the concept that less legislation and more negotiation is necessary in the relation between employee and employer. The Government understands that the country needs to break with the statutory tradition and advance in the direction of a negotiation system.

This is the spirit of the bill sent to the National Congress, that suggest changes in Art. 59 of the CLT. According to the bill, overtime will be limited to 120 hours for workers with weekly 44 hour journey. The purpose is to hinder overtime, thus encouraging creation of new job posts. The work journey should be more flexible, with creation of an annual hour bank. Today, compensation is permitted only weekly.

Both reduction in overtime and annual journey compensation can only be settled through collective agreement or negotiation. With this, there is more room for negotiations and, consequent-ly, for discussions on directives that were included in the ordinary law.

In order to stimulate free negotiation and collective contracting, the Federal Government has edited the Provisional Measure no. 1,503, as of June 30, 1995, that caused the expedition of the Decree no. 1,572, as of July 28, 1995, and the Directives GM/MTb, no. 817 and 818, as of August 30, 1995. These normative instruments instituted and regulated the collective negotiation mediation. The opportunities for negotiation were enlarged also with the Provisional Measure on Profits and Results, that is being appreciated by the National Congress.

d) to promote the strengthening of the labor unions as employee-representative entities. The importance of collective negotiation of the new capital-labor relations will demand strong labor unions. This strengthening process requires, however, changes in union organization and financing. It is necessary that the country substitute union uniqueness by pluralism, breaking also with the compulsory contribution, which is one of the major dependency ties of the unions in relation to the State. Union pluralism offers alternatives of employee representation, increasing the efficacy of union actions. In respect to the labor relations, the first proposal of Constitutional amendment shall be in the sense of changes in union organization, forms of financing, level of representation and of negotiation.