/IPS DEVELOPMENT BULLETIN/ BRAZIL: Job Security Under Threat, Unions Say

By Mario Osava Reprint | | Print |

Mario Osava

RIO DE JANEIRO, Nov 23 1996 (IPS) - Trade unions in Brazil have reacted angrily to the proposed introduction of measures that would make it easier for employers to dismiss workers.

They are angry that as companion measure to a series of tax reforms designed to stimulate small business activity, the government has proposed to Congress regulations that would make staff cutbacks easier. And legislators also want to reverse the ratification of Convention 158 of the International Labour Organisation (ILO), which prohibits unjustified dismisals.

The new bill being presented to Congress would broaden the classification of a “just cause” for collective dismissal to include technological advances aiming at increased productivity and economic reasons like a “serious shrinking” of the market.

If the sacking is considered “justified,” the company is exempted from some of the charges they are made to pay when laying off staff. The government is also planning changes in the payments due to workers losing their jobs, which presently amount to 40 percent of the individual’s retirement savings.

Leader of the Central Workers Union, Vicente Paulo da Silva, lodged his objection to the proposed measures by staging a 24-hour hunger strike on Nov. 13 and 14, camping opposite the presidential palace in Brasilia, the capital.

Da Silva accused the government of President Fernando Cardoso of giving in to pressure from the business sector. Rejection of Convention 158 was “shameful” and “damaging to the international image of the country”. He noted that the same measure had been ratified some months ago.

Luiz Antonio de Medeiros, leader of the “Fuerza Sindical”, a leading union group allied to the government until early this year, described the move as “savage backsliding against the workers.”

De Medeiros added that it was now time to stop job reductions rather than increasing the number of unemployed.

Vice-minister of employment, Antonio Augusto Anastasia defended the government, saying Convention 158 had caused “problems” for Brazil’s labour legislation because it was incompatable with the Constitution.

No other Southern Cone Common Market (Mercosur) nation had fully ratified the Convention, he added. Brazil would lose its potential comparative disadvantages if it did so.

Only 25 nations — most of them amongst the world’s poorest — had adopted the convention, with Venezuela and Brazil being the only Latin American nations to have done so.

Brazil’s business sector wants the country’s labour laws to be made “flexible” in order to strengthen international competitivity and attract international investments.

They argue that making dismissals easier, reducing the legal requirements and lowering redundancy payments and fines, will increase the level of employment. The high cost of hiring and firing workers only stimulated the informal sector, the businessmen claim.

Jose Pastore, professor at the University of Sao Paulo, notes that unemployment figures in the “rigidly regulated” economies of Europe were twice those of the United States where legislation was “more liberal”.

It could take up to a year for an unemployed European worker to find a new job — four times as long as one in the United States.

In response top the union criticism, the government said the new bill was still being drawn up, and would not insist on a fixed payment to people losing their jobs.

Anastasia said the proposal would be discussed at all levels before being put before Congress.

But the issue is a time bomb for the nation. While open unemployment is running at under five percent of the working population, the “precariousness” of many jobs has already been pinpointed as a source of future problems.

However, the threat of mass unemployment like that of Argentina and Spain is a growing fear as international interests take a firmer grip on the country’s economy.

Senator Fernando Bezerra, head of the National Confederation of Industry said the industrial sector “will never again be the great employer it was.” The quantity of industrial posts has been shrinking over recent years, especially in Sao Paulo, while production has been going up.

Small businesses now employ most of the workforce. The government has reduced taxes to a single rate of 10 percent on profits while charging nothing on salaries.

This is good news for the 22,000 government employees currently facing the chop in a rash of well-compensated early retirements. The projected annual budget reduction of 500 million dollars will undoubtedly mean more jobseekers needing such assistance.