Brazil Senate panel approves short-term hire bill
Reuters, Wednesday, January 07, 1998 at 17:07
BRASILIA, Jan 7 (Reuters) - A committee in Brazil's Senate approved Wednesday a bill which would introduce new, cheaper labor contracts for short-term workers, a move which the government says is badly needed to combat unemployment.
A Senate official said the bill was approved by the Constitutional and Justice Committee and now advances to the floor of the upper house for a final vote. The bill has already been approved in the Chamber of Deputies.
A spokesman for the Labor Ministry said contracts spelled out in the bill would cut the cost of hiring new, temporary workers for a maximum of 18 months an average of 36 percent.
Brazilian labor legislation is widely considered outdated and among the world's costliest. It does not differentiate between permanent and short-term labor and is seen as a factor behind Brazil's huge informal economy.
"This is an urgent measure given the outlook for the economy this year," the spokesman said.
October's near-doubling of Brazilian interest rates to fend off speculative attack on the real currency is expected to limit economic growth in 1998 to between one and two percent.
Fearing a surge in unemployment, the government recently pushed legislation to boost the construction sector through Congress and has said the temporary labor contracts bill is also essential.
The bill would halve a range of contributions employers currently must pay to funds aimed at improving worker training and welfare schemes and a levy which raises cash for the government's land reform program.
It also would reduce to two percent from eight contributions which must be paid into workers' redundancy funds, known in Brazil as the FGTS.
The Labor Ministry spokesman said employers would only be allowed to offer the temporary contracts to new workers, only after agreement from trade unions in the case of companies with more than 20 employees.
Companies with less than 50 employees would be allowed to increase their staff numbers by 50 percent using the new contract. The ratio falls to 35 percent for companies with between 50 and 199 workers and to 20 percent for any firm with more than 200 staff.
1193;william.schomberg@reuters.com))
Copyright 1998, Reuters News Service |
