Temer pushes labour reforms despite backlash

Brazil’s President Michel Temer used a speech on May Day to step up an offensive to push sweeping new labour and pension reforms through Congress amid stiffening opposition from Latin America’s most powerful union movement. 

Mr Temer said reforms to Brazil’s complex labour law, which dates from 1943, would lead to equal wages for women and the creation of new jobs for young people even as unions staged protests against his government in central São Paulo. 

“The new law guarantees rights not only for full-time jobs but also for temporary and outsourced work,” he said.

The comments, which follow a general strike on Friday against the reforms, come as the Temer government is attempting one of Brazil’s most ambitious reform programmes in decades. 

Unions on Friday stopped bus services across Brazil and clashed with police after building barricades to block highways leading into state capitals. On Monday, they followed up with rallies in the major cities. 

“The unions and social movements . . . are reuniting to occupy the streets this May 1 against the pension and labour reforms by the Michel Temer government,” said one of the biggest union organisations. 

The group is closely allied with the leftist Workers’ Party of former President Dilma Rousseff, who was impeached last year by a coalition in Congress supporting Mr Temer. 

Opinion polls show the Temer government is deeply unpopular and a majority of people oppose its pension and labour reforms. But analysts say the protests have failed to draw most of the middle class on to the streets.

Businesses says labour reform is necessary to lower the cost of operating in Brazil, which ranked 123rd out of 190 countries by the World Bank in its Doing Business 2017 rankings compared with 47 for Mexico. This was partly because of Brazil’s rigid employment laws. 

A bill containing the labour reforms passed in the lower house of Congress last week with 296 votes in favour compared with 177 against and is set to go before the Senate. 

Rogério Marinho, the congressman heading the labour bill, said Brazil had 17,000 unions compared with 168 in the UK and 100 in Argentina, a country known for its contentious labour relations. 

Brazil’s labour law made it easy for workers to sue their employers while its labour courts were reputedly sympathetic to employees. There were 4m new lawsuits initiated against employers last year, 1m of them demanding damages payment, said Mr Marinho. 

In one of the most notorious cases, Brazil’s second biggest private bank, Bradesco, was ordered in March to pay R$800m in a damages case involving two employees in Brazil’s south. 

Mr Marinho said the new law would force the plaintiff in a labour suit to pay the costs of the defendant if it lost the case. 

“If you make people responsible, they will think twice before entering into lawsuits without just cause,” Mr Marinho told the FT. 

Also controversial, from the unions’ perspective, was an element in the new law that would remove an obligation on all employees to pay one day’s salary in union fees. 

Mr Marinho said the new law would make it optional for workers whether to pay union fees or not, forcing unions to provide better services. 

Another tenet of the new law would be to allow collective bargaining between employees and their bosses. Provided they complied with basic labour rights, such as the minimum wage and working hours, these would have force of law and could not be overturned later in the courts, as is common now. 

In other changes, the bill allows for longer temporary worker contracts and more flexibility on part-time hours.