1 Outsourcing — An Endless Source of Conflict in Brazil By Luis Mendes, Luciano Dequech and Thiago Teno

ACC LEADING PRACTICES PROFILE

5 The Role of General Counsel and Corporate Counsel in Latin America: AN EXCERP T FROM AECOM

By Lillian Moyano Yob

a special supplement to ACC Docket

Outsourcing — An Endless Source
of Conflict in Brazil

By Luis Mendes ( lmendes@pn.com.br), Pinheiro Neto Advogados, Luciano Dequech ( luciano.dequech@odebrecht.com), Odebrecht Agroindustrial S.A., and Thiago Teno ( tteno@pn.com.br), Pinheiro Neto Advogados

ACC recently organised a seminar in Brazil about labour and employment issues related to “outsourcing” in Brazil. It proved to be a success in terms of audience attendance and review. Outsourcing is a hot topic in Brazil and, in some cases, may pose liabilities and litigation for companies.

For illustrative purposes, unofficial data shows that in Brazil there are more than 10 million workers who could be classified as directly or indirectly “outsourced.” Unofficial data also shows there are currently 5,000- plus labour claims revolving around outsourcing in the Superior Labour Court alone.

In this article, “outsourcing” stands for the hiring of an individual ( self-employed worker) or a legal entity (specialised company) to perform certain services for the hiring company (service taker).

The legal framework

Brazil is a civil law country. This means that the rights of employers and employees are set out in two main statutes: the 1988 Federal Constitution and the 1943 Consolidated Labour Laws (known, in Brazil, as CLT). Collective agreements and specific laws on certain matters and ordinances can also establish rights and obligations.

In general, court decisions, however relevant, do not operate as binding precedents (unlike what happens in common law countries). This does not hold true for Brazilian labour courts, though. In the last decades, the Superior Labour Court and the Regional Labour Courts have increasingly issued “statements” that eventually work as binding precedents for want of specific legislation.

For example, the CLT regulates labour and employment relations in its 900-odd articles. The Superior Labour Court alone has issued more “ statements” (at different levels) than the number of articles in the CLT.