Contracts in Brazil

Overview by

The Active Population in Figures

Main Indicators 2008
Labor Force 40 960 533
Labor Force (Annual Growth, %) 0.00
Rate of Activity (%) 56.4
Unemployment Rate (%) 8.5

Source: IPEA Data

Employed Persons, by Occupation (% of Total Labor Force)
Fishing and agriculture 20.8%
Mining sector 0.3%
Industry 13.4%
Water, gas and electricity 0.4%
Construction 7.1%

Source: IPEA Data

For Further Statistics
For Further Information About the Labor Market
Ministry of social providence
ILO, International Labor Organization

Management of Human Resources



Method of Recruitment
In spite of the cost of labor in Brazil, the job market is very dynamic especially for managers. Adverts are put in the newspapers, on specialized web-sites, and by word of mouth. For high level management, methods of recruitment are basically the same as those of European or American firms. For less qualified personnel, a simple interview is enough.
Recruitment Agencies
Brazilian and international recruitment agencies are taking a growing place on the job market.
Recruitment Websites
Recruitment website
Manager online
People consulting

The Contract

Type of Contract
Legal measures govern work contracts; collective agreements and individual negotiation complete them.
The formality of work contracts and constraints of dismissal are very rigid, while hiring conditions are rather flexible.
The two types of contract which are mainly used are fixed term and open ended. A variation on the fixed term contract is a contract with no hierarchical relation for carrying out a particular task.
Breach of Contracts
  • Retirement
Workers can retire according to the terms described above.
  • Dismissals
In the case of fixed term contracts the employer can part with an employee without penalty when the contract runs out. In the case of an open ended contract or before the end of a fixed term contract, either of the parties can terminate the work contract with 8 or 30 days' notice, according to whether the worker is paid weekly or monthly. If the employer has no valid motive for dismissal, half of the wages remaining until the expiry of the fixed term contract must be paid. In all cases, the balance of remaining vacation must be paid, as well as the balance of the fund into which the company pays contributions every month for the employee, the FGTS, up to 8.5% of gross salary, increased by 40 to 50% when an employee with an open ended contract is dismissed without a valid motive. The Brazilian Labor Code is very rigid, so a serious motive is necessary to dismiss an employee, or a difficult economic situation must be proved.
  • Other Possible Methods
Direct negotiation with the employee concerned.
Labor Laws
Labor Law in Brazil

Dispute Settlement


Conciliation Process

Cases of Dispute
Disputes regarding working conditions, misuse of power and moral harassment, individual or collective negotiation.
  • Legal Framework
The creation of a conciliation commission ("juntas de conciliação prévia") before which any decision concerning the dispute must be taken. One of the two parties can appeal to this conciliation court whose decisions must be accepted.
  • Procedure
Law 9 985 of February 2000 promotes conciliation in disputes between companies and their employees.

Judicial Structures

  • Competent Legal Body
There are industrial tribunals in each State where disputes not settled by conciliation are heard. There are Magistrates' courts in the four macro-regions of the country and a Higher Industrial Tribunal settles the last appeal procedures.
The Higher Industrial Tribunal
(the Constitution of 1988, title 4, chapter 3, section 5, article 111 governs the role of the Higher Industrial Tribunal).

Social Partners

Social Dialogue and Involvement of Social Partners
The Labor Code prohibits having too many unions for a single profession and in each region. Although the law has not created a central institution, either, representing the unions, four groups have tried to provide this but without legitimacy; they are: the Unitarian Workers Group (CUT), the General Confederation of Workers (CGT), the Força Sindical (FS), and the Democratic Social Union (SDS). Some industrial and mining sectors have powerful unions, and President Lula came from there. However, the unions are more or less absent from the rural areas where the great landowners still hold sway.
Unionization Rate
Union dues are obligatory for all workers in the formal sector, and are set at one working day's income per year.
Unitarian Workers Group
CGT Brazil
Força Sindical
Democratic Social Union
Regulation Bodies
Ministry of Labor

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