Introduction
'Dirty' list
Comment
Latest news


Introduction

Two important public banks – the National Bank for Economic and Social Development and Caixa Econômica Federal – recently resumed the financing of employers that were administratively condemned for maintaining employees under working conditions equivalent to slavery.

Slavery has been one of the biggest historical and cultural issues faced by Brazil since its founding. While the country was discovered in the 15th century, slavery was forbidden by law only in 1888. Since then, huge changes have been made. Although Brazil has become a modern and high-tech country, some employees are still working in oppressive environments – particularly in the textile and sugar cane industries.

Brazil supports many international covenants and human rights campaigns against working practices that are considered hazardous, unhealthy and injurious to mental or physical health. Further, Brazilian law has several provisions that embrace human rights and seek to end any working conditions that are considered exhaustive or harmful to the health of employees.

'Dirty' list

One of the measures taken to make these provisions effective was the drafting of the 'dirty' list (Ordinance 540/2004) by the Ministry of Labour and Employment. The dirty list contains the names and information of all employers found by labour authorities to have employees working in conditions akin to slavery.

One consequence of an employer being on the list is that it cannot participate in any public bidding process or receive financing from public banks. However, the list has received significant criticism due to the lack of objective criteria and legal guarantees (eg, due process of law) for those that are administratively assessed.

In December 2014 the Superior Court approved a collective preliminary injunction to suspend the terms of Ordinance 540/2004 that partially regulated the dirty list (Ordinance 2/2011). The Superior Court stated that as neither ordinance was based on an existing law, their provisions were unconstitutional. As this was only a preliminary decision, changes may occur once the matter has been considered in relation to controversial political issues.

Comment

In any case, now that the effects of the resolutions are suspended, many financial institutions will resume their support of employers that were assessed by the Ministry of Labour and Employment, but that did not have the opportunity to defend themselves or appeal before the courts. The National Bank for Economic and Social Development and Caixa Econômica Federal were the first to take this step.

Latest news

The Ministry of Labour and Employment recently issued a new ordinance suspending the effects of Ordinance 2/2011 as a legal alternative to circumvent the Superior Court's decision. The new ordinance provides more legal guarantees for those being assessed by labour authorities.

Thus far, the National Bank for Economic and Social Development and Caixa Econômica Federal have not altered their decisions. However, more information regarding this matter may be revealed in the coming weeks.

For further information of this topic please contact Vilma Toshie Kutomi or José Daniel Gatti Vergna at Mattos Filho, Veiga Filho, Marrey Jr e Quiroga Advogados by telephone (+55 11 3147 7600) or email (vilma.kutomi@mattosfilho.com.br or jvergna@mattosfilho.com.br). The Mattos Filho, Veiga Filho, Marrey Jr e Quiroga Advogados website can be accessed at www.mattosfilho.com.br.

 This article was first published by the International Law Office, a premium online legal update service for major companies and law firms worldwide. Register for a free subscription