University of São Paulo: Bill aims to reduce compensation on FGTS in cases of unfair dismissal

There is a bill in progress that aims to reduce the fine on FGTS in case of dismissal without just cause, the compensation received by the employee would fall from 40% to 25%. The proposal is still under review by the committees and should be discussed by the House and Senate. With this, professor Otávio Pinto e Silva, from the Department of Labor Law and Social Security at the USP Law School, examines the first steps of the project in an interview with Jornal da USP in Ar 1st edition .

The Brazilian Constitution provides that the worker has protection against arbitrary or unfair dismissal. Therefore, the teacher understands that the proposal is not adequate. “The Constitution protects the worker against dismissal and this protection needs to be regulated by law. So far, what the law provides is the 40% of the FGTS. Why reduce this protection, to facilitate dismissal? We already have an easy layoff, the employer who wants to break the contract has to pay to break or provide compensation to the worker. It will make the dismissal even easier, our market is already so flexible, why this ease?”, he asks.

The impact on reduction is significant. An abrupt drop from 40% to 25% in the value of compensation can further complicate the life of the worker in a moment of economic crisis, as Pinto e Silva indicates: “The FGTS already represents a way for him to be able to face difficulties at a time of unemployment, in addition to unemployment insurance itself, which is not paid by the employer, but by the government. [He] will already lose out, because he will have a less effective guarantee during that period in which he will face this unemployment”.

In the 1960s, the CLT (Consolidation of Labor Laws) rule was changed, which provided for job stability for workers who spent ten years in the same company. The change took place because of the interest of businessmen, who sought to make labor legislation more flexible and were against job stability. The Guarantee Fund, which seeks to guarantee the worker’s length of service, “was created as an option to the ten-year stability regime that was provided for in the CLT. In practice, the fund ended up being a form of general contracting from its creation, because this option for the fund or for the previous system of the CLT proved to be an imposition on the worker, it was not his personal choice, and with the Constitution of 1988 became mandatory. So every worker, when he is admitted to the employment regime, he is entitled to the Severance Indemnity Fund, and if he is dismissed, he is entitled to a 40% fine. It is the regime that was implemented in 1988”, comments the professor.

For Pinto e Silva, reducing the compensatory indemnity is only facilitating the dismissal and making the worker vulnerable to the entrepreneur. “If Brazil approves a project like this, it goes against the grain of the international community. Because there is an international convention of the ILO (International Labor Organization), the convention number 158, which says that it is up to the States to establish mechanisms to protect workers against dismissal without cause. What the ILO preaches is that precisely for a company to be able to dismiss a worker, it needs to have a reason, an economic, financial, technological reason or even one related to the worker’s own, an issue that justifies the termination of the employment contract. .”


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