Brazil's Senate approves labor overhaul by strong margin

Brazil's Senate on Tuesday approved the country's first major overhaul of labor rules in seven decades in a crucial victory for beleaguered President Michel Temer as he seeks to pull the economy out of its worst ever recession.

The bill, which modernizes some labor laws dating back to the 1940s, was passed in a 50 to 26 vote following approval in the lower house of Congress and will be sent to Temer to be signed into law.

The changes, which were opposed by trade unions, give more leeway to collective bargaining and reduce the scope for legal action in labor disputes in Latin America's largest economy. Remote work will become regulated and companies will get more flexibility to allocate work hours and vacation time.

Approval of the labor reform in the Senate did not necessarily mean Temer held enough support in the lower house to avoid being suspended from office later this month to be tried for corruption.

However, it showed continued support in his multiparty coalition for an economic agenda that investors see as crucial to reviving Brazil's economy.

Under the labor bill, labor union dues, currently mandatory, will become voluntary. The bill also gives more flexibility for part-time work and temporary contracts.

"We've raised our forecasts for job growth in coming years after we started to expect the labor reform approval," said Alessandra Ribeiro, an economist with Tendências Consultoria.


"The changes will make the job market more flexible and above all they will lower the risks associated with new hires."

Unions said the changes reduced job security while weakening their organizing power by eliminating mandatory union dues.

"None of us senators campaigned in our districts in favor of a labor reform," Workers Party senator Gleisi Hoffmann said on the Senate floor Tuesday during a failed opposition attempt to obstruct the vote. "None of you here was mandated to vote this reform."

Some senators within the ruling coalition also opposed some parts of the bill but agreed to pass the proposal exactly as approved by the lower house after Temer vowed to make a few small changes by provisional decree.

Many of Temer's proposals for the economy, including planned auctions for oil licensing rights and transport concessions, have remained on track despite the political crisis.

The government initiative most likely at risk, according to lawmakers, was a proposed overhaul of the social security system. It requires a supermajority of votes in both chambers of Congress to change the constitution.

Temer was charged last month with taking multimillion-dollar bribes, but the lower house of Congress must now vote on whether to allow the Supreme Court to try the conservative leader.

He has repeatedly denied any wrongdoing and refuses to resign despite polls showing his government's approval rating is in the single digits.

Source: Reuters

Brazil senators set final vote on labor reform for July 11

Brazil's Senate has set a final vote on President Michel Temer's landmark labor reform bill for July 11, a sign congressional efforts to help revive a recession-hit economy are on track despite a swelling corruption investigation.

Brazil's Senate on Tuesday evening passed a motion to fast-track the bill in a 46 to 19 vote.

The labor reform bill, the first major overhaul of labor rules in seven decades, has already been approved by the lower house. Trade unions say Temer's plan calls for more temporary work contracts and outsourcing, while weakening their power by eliminating mandatory union dues and other measures.

Temer has heralded labor reform as one of his main initiatives to pull Brazil out from its worst recession since the early 1900s. However, passage has fallen behind schedule after he was ensnared in a major corruption scandal last month.

The bill is widely expected by officials and analysts to be approved by a simple majority in the Senate, despite efforts by opposition parties to obstruct the vote.

Source: Reuters

Brazil's labor reform bill advances in Senate

Brazilian President Michel Temer's proposal to modernize the labor market was approved by the Senate's economic affairs committee on Tuesday, clearing an important hurdle despite a political crisis that has jeopardized the government's reforms agenda.

The committee passed the bill 14-11. The proposal still needs the approval of two other Senate committees before it reaches the floor.

Temer is facing calls to resign due to allegations he took bribes from meatpacker JBS SA. The scandal is threatening to derail his reform agenda that includes an overhaul of the costly pension system.

The labor reform bill has already been approved by the lower house, but faces fierce opposition from labor unions that will lose power over workplaces. The bill allows more temporary work contracts and outsourcing, eliminating mandatory union dues.

The proposal to modernize Brazil's labor laws, some of which date back to the 1940s, is eagerly awaited by Brazilian businesses so they can lower labor costs that undercut their ability to compete in foreign markets.

The senator sponsoring the bill, Ricardo Ferraço, has said he expects the final vote in late June.

Source: Reuters