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Law # 13,429 of March 31, 2017 - Outsourced work

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4/3/2017 12:00 AM Demarest News

Law # 13,429 of March 31, 2017 - Outsourced work

Dear Clients,

As widely publicized by the press media, last Friday night, March 31st, 2017, it was published in the Official Gazette the Law #13,429/2017, result of Bill 4,302/1998, with the presidential negatives already included.

Mentioned law confirmed the main changes the bill provided for, in what concern the rules of general outsourcing and temporary work in Brazil.

Among the changes, it is worth to point out the following:

  • The outsourcing, previously disciplined based on case law precedent No. 331 of the Brazilian Superior Labor Court, under which only ancillary activities were deemed to be legally outsourceable, is now regulated by law, with the possibility of outsourcing any activity;
  • The establishment of legal requirements for operation of companies of temporary work and the validity of the agreements executed by them. About this issue, we highlight the need of a capital stock of R$ 100,000.00 (one hundred thousand Reais) in order to constitute a temporary work company, as well as the revocation of the requirement that temporary work companies' partner are Brazilians;
  • Establishment of formal criteria for the operation of services rendering companies in general and validity of the agreements executed with those companies. Among them, we highlight the mandatory minimum capital stock for incorporating services rendering company based upon their number of employees;
  • Creation of obligations for the companies hiring services with respect to the outsourced or temporary workers; and
  • Increase in the legal term for hiring the same temporary worker - from ninety (90) consecutive days, renewable for additional ninety (90) consecutive days, to one hundred and eighty (180) consecutive days, renewable for additional ninety (90) consecutive days.

We reinstate that engaging in temporary and outsourced work services must continue to be surrounded with caution, since the changes brought by the Law # 13,429/2017 do not rule out the subsidiary liability of the services taker and do not authorize outsourcing in an unrestricted manner or contrary to the Labor Code (CLT).

The lawfulness of outsourced work will continue to be subject to the Labor Courts' judgement based upon the effective relationship held between the contracting company and outsourced workers.

Finally, we highlight that based upon Government's statements, it is probable that in a close future there are defined specific rules for the validity of the outsourcing, among which we highlight a possible express prohibition of terminating employees and, right after, hiring them as services providers.

We will keep you informed about any news and remain available for clarification about this issue.

Demarest Advogados

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