Government enacts plan to reduce working hours and wages
The measure was signed Monday by President Rousseff following a meeting with ministers and workers' union representatives
As a move to avoid job cuts across businesses in financial difficulties, the federal government passed a temporary presidential decree introducing an Employment Protection Program (PPE in the Portuguese acronym) that will temporarily reduce working hours and wages by up to 30%.
The measure was signed Monday (July 6) by President Dilma Rousseff following a meeting with ministers and workers' union representatives. As part of the program, the government will use the Worker Protection Fund (FAT) to refund impacted workers half of their pay cut. While the program takes immediate effect, the bill must still be approved by Congress.
Employers have until the end of this year to join the Employment Protection Program, which expires on December 31, 2016. The government has also set up a committee with representatives from several ministries to decide which industries and businesses qualify to join the program. The group will announce the entry requirements based on economic and financial indicators.
According to the chief administrative aide to the Presidency, Miguel Rossetto, companies will be barred from dismissing personnel for the duration of the program plus at least two subsequent months. Companies can join the program for six months extendable for an equal period.
“Using public resources to maintain employment is better than funding unemployment. This is a win-win program that is clearly focused on saving jobs in a period of crisis,” Rossetto said, noting that the program is open to any sectors facing job losses and income reductions. The government has initially planned to use $32 million to fund the program, but this can be adjusted as more employers join.
According to the Minister of Planning, Budgeting, and Management, Nelson Barbosa, the program will be less costly than unemployment insurance and temporary lay-offs: “In a scenario with 50,000 workers [impacted], [the government] would spend about $21.6 million less, [because] the program retains government [tax] revenue that would have been lost should these job contracts be terminated,” he explained.
Implementation of the PPE is conditional upon worker approval through a collective bargaining agreement with their employers. According to Paulo Cayres, chairman of the National Confederation of Metalworkers, employee agreement is a key point in the program. “You have to convince them and present a proposal that will be voted by workers,” he said.
Employers were also required to ensure they will not dismiss employees during the program. According to José Calixto Ramos at the New Central Workers' Union, the EPP provides benefits to employees. “A business's first response to crisis is to cut jobs. [The program will] prevent [businesses] from terminating employees, though with small wage cuts,” he said.
Translated by Mayra Borges
Fonte: Government enacts plan to reduce working hours and wages
