Obligation to provide reasons to the employee No Valid grounds (justified dismissal): none

Remarks

Under the CLL, either party can terminate a contract of indefinite duration at will by observing notice requirements. (art. 499 CLL). In addition, an employer who dismisses an employee without cause has to pay a specific compensation (see remarks under severance pay).
The 1988 Constitution provides for the right of rural and urban workers to be "protected against arbitrary dismissal or against dismissal without just cause, according to a supplementary law which shall establish termination pay, among other rights" which is implemented through the FGTS system (Act No. 8036 of 1990). Employee's protection therefore lies in the right to receive termination payment ("verbas rescisórias").
Certain categories of employees enjoy job stability and therefore can only be dismissed for serious reasons (see "workers enjoying special protection").
In cases where the employee has committed one of the grave misconducts enumerated under the CLL, the employment relationship may be terminated by way of "dismissal for just cause" (art. 482 CLL)
The acts entailing dismissal for just cause include: deceit; misconduct; breach of discipline or insubordination; criminal conviction (except if the sentence is suspended), habitual drunkenness or drunkenness while on duty; disclosure of trade secrets; neglect of duty; performance of acts that damage the reputation of the employer or third parties; if it is established by an administrative inquiry that the employee is guilty of acts which are detrimental to national security.
In such cases, notice and compensation requirements shall not be observed.

Prohibited grounds: marital status, pregnancy, maternity leave, family responsibilities, temporary work injury or illness, race, colour, sex, social origin, age, trade union membership and activities, disability, participation in a lawful strike, ethnic origin

Remarks

- Pregnant employees enjoy job stability and cannot be dismissed except for serious reasons from the date the pregnancy is confirmed until five months after confinement (this covers the duration of maternity leave which is 120 days) (art. 10(IIa) Constitution, Transitional Provisions). See also Act 9799 of 1999, which prohibits any form of discrimination against women in employment (including on the grounds of pregnancy).
- Act No. 9029 of 13 April 1995 prohibits discrimination practices on the basis of sex, origin, race, colour, marital status, family status or age, in respect of access to employment or termination of employment.
- Security of employment is guaranteed through reinstatement to employees who, because of an employment accident or occupational disease, were obliged to suspend the employment relationship (Act No. 8213 of 24 July 1991).
-The Constitution prohibits the dismissal of a unionized employee, except on account of a serious misconduct from the moment he or she registers as a candidate for a leadership or representative position in a trade union and for one year thereafter (art. 8(VIII) Constitution).
- Dismissal of workers involved in a strike is prohibited expect in the event of an abuse of the right to strike (Act 7783 of 1989, art. 7).

Workers enjoying special protection: workers' representatives, pregnant women and/or women on maternity leave, workers with a long period of service, workers on temporary leave following an occupational disease or a work injury

Remarks

- The Constitution prohibits the dismissal of a unionized employee, except on account of a serious misconduct from the moment he or she registers as a candidate for a leadership or representative position in the trade union and for one year thereafter (art. 8(VIII), Constitution). If the Court declares the dismissal unjustified, such category of employee has the right to reinstatement.
- The Constitution also prohibits arbitrary dismissal or dismissal without cause of Workers' representatives on the Internal Accident Prevention Commission from the date of registration as a candidate until one year after the end of his or her term of office (art. 10(IIa), Constitution, Transitional Provisions). The CLL also provides that if the employer fails to prove the existence of disciplinary, technical, economic or financial reasons before the Court, those employees shall be reinstated (art. 165 CLL).
- Pregnant workers also enjoy job stability and can therefore not be dismissed except for serious reasons from the date the pregnancy is confirmed until five months after confinement.
(art. 10(IIa) Constitution, Transitional Provisions).
- Until the adoption of the 1988 Constitution, workers with at least ten years of service enjoyed job security and could only be dismissed on the grounds of a serious offense or force majeure upon authorization from the Labour Court. For those workers who have acquired the right of security of tenure after ten years of service before the adoption of the 1988 Constitution (= those hired before 1978), the job security provisions of the CLL are still applicable. Dismissals are prohibited except on account of a serious offence or force majeure (art. 492 CLL). If none of those grounds are proved, they are entitled to reinstatement or compensation in lieu of reinstatement.
- Security of employment is guaranteed through reinstatement to employees who, because of an employment accident or occupational disease, were obliged to suspend the employment relationship (Act No. 8213 of 24 July 1991).

tenure ≥ 6 months: 0 month(s)

tenure ≥ 9 months: 0 month(s)

tenure ≥ 1 year: 0 month(s)

tenure ≥ 4 years: 0 month(s)

tenure ≥ 5 years: 0 month(s)

tenure ≥ 10 years: 0 month(s)

tenure ≥ 20 years: 0 month(s)

Redundancy payment:

tenure ≥ 6 months: 0 month(s)

tenure ≥ 9 months: 0 month(s)

tenure ≥ 1 year: 0 month(s)

tenure ≥ 2 years: 0 month(s)

tenure ≥ 4 years: 0 month(s)

tenure ≥ 5 years: 0 month(s)

tenure ≥ 10 years: 0 month(s)

tenure ≥ 20 years: 0 month(s)

Notes / Remarks

Notes

There is no severance pay as such. However, according to the Guarantee Fund for Time of Service system established in 1966 and now regulated by Act No. 8036 of 11 May 1990, ("Fundo de Garantia por Tempo de Serviço" - FGTS), every month, the employer is required to deposit 8 % of the employee's monthly salary into an account managed by the Federal Savings Bank ("Caixa Econômica Federal") on behalf of the employee. [Note that for the period of employment from 01/2002 to 12/2006 additional 0.5% had to be paid by the employer to the state as part of social benefits]. Deposits are adjusted for inflation.
The employee is entitled to withdraw the balance of the account in several situations, including the following:
- dismissal without cause (= for any reason other than those listed as "just causes" in CLL)
- expiry of a fixed-term contract;
- closure of the undertaking;
- termination due to force majeure;
- termination by mutual agreement;
- death of the employer;
- retirement;
- when the worker or his/her dependent suffers from cancer or is HIV positive.
- in order to purchase a house, settle or amortize the debt or payment of part of housing loan instalments, etc.

- If an employee is dismissed without cause (which includes economic reasons), in addition to the total amount deposited in his/her FGTS account, he or she will be entitled to an additional indemnity of 40% of the updated value of deposits in the FGTS account. Extra 10% shall be paid by the employer directly to the government (not the worker) (= see compensation for unfair dismissal).
Workers under a fixed-term contract who are dismissed without cause are also entitled in addition to the aforementioned amount, to the payment of sum equal to half the remuneration to which he or she would have been entitled on the expiry of the contract.
These sums are payable upon dismissal together with any other employee's entitlements, and there is no need for a Court decision acknowledging the absence of just cause.
- If the employee is dismissed for a just cause, once the serious misconduct has been acknowledged by the Court, the employee forfeits the right to the aforementioned compensation and to immediate withdrawal of his or her FGTS deposit.

Compensation for unfair dismissal - free determination by court: No

Compensation for unfair dismissal - Are there legal limits?: Yes

Compensation for unfair dismissal - Legal limits (ceiling in months or calculation method): - If a just cause is not recognized by the Court, the employee is entitled to compensation for dismissal without cause = 40% of the total amount deposited in the FGTS ("Fundo de Garantia por Tempo de Serviço". This amounts to: 40% x 8% x length of service (in months). This compensation for termination of employment is not payable until one year of employment has been completed.

-Workers under a fixed-term contract who are dismissed without cause are also entitled in addition to the above mentioned amount, to the payment of sum equal to half the remuneration to which he or she would have been entitled on the expiry of the contract.

Remarks

- See art. 18(1) of the Act No. 8036 of 11 May 1990, consolidated version and art. 478 CLL.

Compensation follows different rules in the following situations.
- For those workers who had acquired the right of security of tenure after ten years of service before the adoption of the 1988 Constitution (= those hired before 1978), the job security provisions of the CLL are still applicable. Dismissals are prohibited except on account of a serious offence or force majeure (art. 492 CLL). If none of those grounds are proved, the employer shall reinstate the employee or be ordered by the labour court to pay compensation in lieu of reinstatement equivalent to 2 month's salary per year of service (art. 495-497 CLL).
- Workers who had less than 10 years of service when the constitution was adopted (= those workers hired between 79 and 88) under a contract of indeterminate duration and who did not opt for the FGTS system prior to October 1988 still remain governed by the severance pay provision of the CLL. They are entitled to 1 months' for each year of actual service or any fraction of a year exceeding six months in the event of cancellation of the contract (termination at will). This means that in the event the court does not acknowledge a just cause for dismissal (disciplinary dismissal), the court will order the employer to pay such severance payment to the dismissed employee (art. 477, 478 and 497 CLL, and art. 14(1), Act No. 8036 of 1990).

Reinstatement available: Yes

Remarks

Compensation through the FGTS system is usually the only remedy for unfair dismissal.
However reinstatement is available in the following situation:
* Dismissal of workers who had acquired the right of security of tenure after ten years of service before the adoption of the 1988 Constitution (= those hired before 1978). If a serious offence is not duly established, they shall be reinstated or be awarded compensation if the Court declares that reinstatement is not advisable (art. 495 CLL).
* The same rules apply to those categories of employees enjoying job stability (i.e. pregnant women, member of a trade union board and workers' representatives on the Internal Accident Prevention Commission (CIPA)). If serious reasons for dismissal are not recognized by the Labour Court, they have the right to be reinstated.

Preliminary mandatory conciliation: Yes

Remarks

Art 764 CLL: All labour disputes, whether individual or collective, which are referred to a labor court shall be submitted to conciliation proceedings before the labour judges.

Competent court(s) / tribunal(s): labour court

Remarks

Art. 643-645 CLL: disputes arising out of labour and employment relations between employers and workers should be settled by the labour courts. The Superior Labour Court, Regional Labour Courts and Labour Courts of first instance or the courts of ordinary jurisdiction have jurisdiction.
- The competence of Labour Courts was amplified by the Constitutional Amend No 45/2004. In localities which do not fall within the jurisdiction of the conciliation and arbitration boards, the judges of ordinary jurisdiction shall be responsible for the administration of justice in labour matters (art. 668 and 669 CLL).

Existing arbitration: No

Length of procedure: 6.5year(s)

Remarks

The Superior Labour Tribunal provides statistics on average duration of labour procedures in Brazil (http://www.tst.jus.br/web/estatistica/jt/prazos).

Burden of Proof: both

Remarks

Art. 818 of CLL provides that the burden of proof is on:

I - the claimant, as to the constitutive fact of its right;

II - to the defendant, as to the existence of an impediment, modification or extinction of the claimant's right.