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Most recent attack on Brazilian workers will reduce salaries and increase accidents

13 September 2018
On August 30 the Brazilian Supreme court voted 7-4 to legitimize last year´s labour reforms that allow for unrestricted outsourcing. Previous Brazilian legislation had limited outsourcing to non-core activities like property services.

With this confirmation from the Federal Supreme Court (STF), the measure will lead to hiring of professionals in the areas of education, health and culture without public tender.

The most important business association in the country (FIESP) campaigned hard for the unrestricted outsourcing legislation using the same unsubstantiated economic logic as any other employer in any other country around the world. They claimed that ‘cost reductions’ would allow employers to hire more workers, stimulating economic growth and reducing unemployment. In reality, the legislation allows employers to ‘outsource’ risks and costs onto those least able to deal with them.

Recent information published by the national labour research institute Dieese has calculated these risks and costs. Dieese demonstrates that outsourced workers earn an average of 25% less, suffer 60% more accidents and work 12 hours more per month. Turnover doubles with outsourcing. Clearly this legislation was not introduced to improve the lives of workers or allow the state to provide better quality or more accessible public services.

A simultaneous structural change implemented by the same government was a constitutional amendment that freezes all public sector spending for the next 20 years. Local leader in the São Paulo municipal workers’ union Juneia Batista highlights that, "in the context of structurally reduced public spending due to this constitutional amendment, of course public sector employers will outsource everything they can to reduce costs. Both working conditions and public services will obviously deteriorate. It makes our work more difficult so we’ll have to be even more creative and militant in our defense of public sector workers and quality public services."

The erosion of careers in the Brazilian public service combined with broad wage reductions will dramatically reduce contributions to the collective retirement system, effectively sabotaging the system from the bottom up. Additionally, the growing number of workers that are forced to become ‘own-account’ or self-employed don’t even contribute to collective retirement plans.

The legitimation of unrestricted outsourcing by the Brazilian supreme court immediately ended the more than 4000 legal processes that had been initiated. The possibility of using legal or judicial remedies to prevent or limit outsourcing no longer exists. For Batista, “the only way to reverse this setback is to repeal the law.”

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