Labour law and outsourcing

Author(s): MAGDA BARROS BIAVASCHI

Source: International Union Rights, Vol. 16, No. 3, Focus on precarious, informal and
migrant workers: Unions and NGOs discuss success stories, best practice, and barriers to
organisation for vulnerable workers (2009), pp. 18-19
Published by: International Centre for Trade Union Rights
Stable URL: http://www.jstor.org/stable/41936633
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 FOCUS PRECARIOUS, INFORMAL AND MIGRANT WORKERS

Labour law and outsourcing

autonomous character was not acknowledged
roughly until the end of First World War. The
Labour
Labour unbridled
for unbridled
foritsitsemergence
emergence Lawwere
capitalism. capitalism.
ripeis anback
wereinobstacle
the The The tomaterial
19thripe material conditions
back free in conditions transit the 19th of International Labour Organisation, which
Understanding Century in Europe when capitalism completed its emerged with the Treaty of Versailles in 1919,
formation cycle and capitalists rejected any regu- was a landmark asserting the role of social law.
how to respond to lation. In a society founded on a self-regulated With human dignity as the starting point and
market, capital celebrated its orgies and 'freedom' workers' human conditions at the core of its
outsourcing and
reinvented inequality. objectives, the ILO stood out by bringing togeth-
the growth of In recent decades, several sorts of inequalities er the human, personal element and the social,
are worsened and redefined under the action of collective one, against the tide of a liberalism that
precarious forms
did not account for social issues. New labour
unrestricted capitalism. In order to fulfill a tough
of employment is programme of fiscal adjustment and primary laws sur- introduced extra-market mechanisms for
a challenge for plus, worsened by high interest rates, the compensating inequalities, and consolidated the
Brazilian economy stagnated. Low economic principle of protection. Perhaps no other branch
Brazilian labour growth in the 1980s and 1990s had negative of law has such features. Even though labour law
law and for the impacts on public social policies, causing damage has had such a genesis, different countries have
to those who most needed them. quite unique specific circumstances that have
unions influenced the development of their own labour
Under the rhythm of promises to reduce unem-
ployment and improve competitiveness, the
laws. In Brazil, the systematic construction of
result was fiercer competition, increasing asym-
labour law took place after 1930.
metry, and insecurity. Even though data shows
some growth in the economy and more formali- The Vargas Era
sation of workers from 2005-9 there remain prob- The abolition of slavery by the Aurea Act of 1888
lems that have not been overcome. The justicefreed of the country of its inconveniences, but black
markets, observed Luiz Gonzaga Belluzzo, ispeople not were left to their own fate. Many former-
distributive and the rights born out of commercialslaves remained on the properties. Others would
relations acknowledge no fundamental principles wander and work here and there. Others yet
other than formal equality between producerswere of marginalised in cities. After abolition, the
goods: a situation where the strongest celebrate social needs for labour protection intensified.
their orgies. Nevertheless, material conditions for the birth of
social law would only be ripe after 1930 as indus-
Labour Law: a reaction against liberal order trialisation process.
The Industrial Revolution changed substantially Vargas took power in 1930. He would struggle
the material conditions of life in society. Home- to overcome the characteristics that marked the
based workshops gave way to mills and factories. country's economic, social, and political struc-
On the one side workers were deprived of their ture: the remainders of slavery, patriarchy and
condition as producers and were no longer able monoculture inherited from colonial times; an
to own the means of production: workers were essentially agrarian society; an economy subordi-
forced to become wage workers. On the other nated to a primary exporting model; sparse and
side, employers, as owners of the means of pro- unorganised urban workers; and non-universal
duction, would hire labour, provide equipment, and non-secret suffrage, with no female partici-
supervise its use, trade the end product, pay pation. The project was to industrialise the coun-
wages and make profits. The material conditions try and turn it into a modern nation.
were ripe for the birth of labour law, which Brazil was essentially agrarian. During the
would come later. 1920s, agricultural production represented an
A new mode of production brought new con- average of 58 percent of the GDP while the man-
ufacturing industry was only 23 percent. A
flicts and undeniable social problems. A brutal
recently emerged urban proletariat had a number
inequality constituted capital-labour relations. But
while those circumstances increased exploitation, of demands but not the organic strength to trig-
a homogeneous working class was built. Workers ger a process of effective actualisation of social
and their organisations reacted. protection rules. The material conditions for their
MAGDA BARROS BIAVASCHI
political struggles was not the same as that in
The liberal order was gradually undermined.
is a former labour court judge, Under a false harmony, struggles and tensions
19th-century England, hence the importance of
doctor in social labour
ended up in two great world wars. The first, an the State to foster actualisation.
economy at the University of
unprecedented violent war between world pow- From 1930 to 1943 there was a strong process
Campinas, and researcher at ers, started in 1914, followed by times of high of institutionalisation of workers' social rights.
the Centre for Studies in Trade
economic instability ending in the Great Brazil was the 4th country in the Western hemi-
Unionism and Labour
Depression. The crises generated all over an anti- sphere to guarantee the female vote. Women
Economics
liberal response. Labour law is part of this com- were able to work without permission from their
plexity. husbands. State mechanisms were put in place to
The historical, social, and political conditions inspect and enforce those rules (namely, Joint
for the birth of labour law were ready. Its Committees, Conciliation Councils, Inspection

INTERNATIONAL union rights Page 1 8 Volume 16 Issue 3 2009

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Departments, and the industrial courts of the does not pay labour-related duties, the hirer is
Labour Justice) and norms on workers' organisa- liable. This included the State's direct adminis-
tion were established. In 1946, the Labour Justice, tration agencies, public foundations, state-
which had been regulated in 1939 and estab- owned companies, and government-controlled
lished in 1941, was integrated into the Judiciary. corporations.
This process culminated in 1988, with the new In 1998, the Executive presented the Bill PL
Federal Constitution. 4302-B/1998. This Bill established parameters for
the functioning of service-providing companies
In fact the 20th Century is marked by the intro-
duction of several major Constitutions. The and for contracts with the hirers, accepting tem-
Constitutions of Mexico [1917] and of Weimar porary labour both in core business activities and
Germany [19191 systematised the global frame- support activities up to nine months, or others
work of social rights, opposing liberal concep-established in collective labour agreements.
tions about the role of the State. They influenced Favouring institutional conditions for labour
many legal orders, including Brazil's. In the case intermediation and allowing outsourcing in activ-
of Weimar, just like in Brazil [1988], the right toities of any sort, the Proposition is subject to
A bill based on
substantive equality expresses the need for theappreciation by Congress. The trade union centre
State to guarantee to all citizens concrete access CUT expressed its positions against the Bill
strategies
to collective material assets. Both give social because there are other Bills in Congress dealing
value to labour and property. In both the eco-with outsourcing. Bill 3127/2004, for instance,
developed by
nomic order has to guarantee a dignified exis-proposed by Congressman Eduardo Valverde,
tence under the principle of social justice. providing for the cancellation of labour contractsunion centre
trade
But a liberal wave has flooded the country.that include intermediation of labour, was reject-CUT is currently
Policies of adjustment and structural reform that ed at the Labour, Administration and Service
were intended basically to reduce the public Committee on June 20, 2007. being put forward
deficit opened to the private sector pathways that On October 26, 2004, Congressman Sandro for discussion
were until then walked only by the State. Mabel presented Bill 4330/2004. It covers vicari-
ous liability of the service hirer, both regarding
Outsourcing labour-related duties in their strict sense and
This article sees outsourcing as one of the those regarding workers' safety and health.
expressions of the liberal response to the crisis. Approved by the Congressional Economic
Being one of the forms of flexible hiring that Development, Industry and Trade Committee, it
advanced the most in Brazil from the 1990s on, it justifies outsourcing for 'granting foundation and
is now common practice in nearly all public and legality to a situation included in Brazilians'
private economy segments. Expressing an inter- everyday lives'. Sent in 2007 to the Labour,
nal or an external phenomenon and adopted by Administration, and Service Committee, it awaits
companies to reduce costs, share risks, and its appraisal.
increase organisational flexibility, it deepens Congressman Vicentinho proposed Bill
inequality between workers and weakens their 1621/2007, which provides for outsourcing in the
organisation. private sector and in government-controlled com-
Brazil has no specific regulation for outsourc- panies, based on proposals by CUT's Working
ing yet. Workers and their national labour unions Group on Outsourcing. It is currently at the
have been debating its importance. This issue is Economic Development, Industry and Trade
controversial. While one stream by and large Committee.
opposes the regulation, fearing it might con- In May 2008, the Ministry of Justice, through its
tribute to legalise a system that makes capital- Judiciary Reform Secretariat, formed a 'High Level
labour relations more precarious and increase the Commission' aimed at making projects to reform
divisions in workers' organisations, another one of labour law, seeking to increase the scope of
advocates it in order to block frauds and to guar- tutelage and protection. The committee present-
antee more equal treatment among those who ed a bill to be sent to Congress based on the fol-
work for hirers and outsourced companies. In lowing premises:
1974, Law 6019/74 ('Law on Temporary Labour')
opened doors to outsourcing, allowing compa- Definition of the hirer's joint liability.
nies to hire qualified labour with no direct Acknowledgment of direct employment rela-
responsibility for those who carry out the activi- tion with the hirer when simulated hiring is
ties. In 1983, Law 7102/83 extended such forms evident.
to security services. Wages of outsourced workers should be
On September 22, 1986, the Supreme Labour equal to those of workers hired directly by
Court [TST] introduced Precedent 256 the impli- the hirer, who carry out the same activities
cations of which were that it would be illegal to Application to employees of outsourced com-
hire workers through an intermediary company panies of all rules, including collective, guar-
and implied direct legal employment relations anteeing the same union representation.
between the worker and the hirer. Such an
Final remarks
understanding guided a large part of later judicial
decisions that declared the existence of direct Brazil has a social Constitution based on princi-
employment relationships between the hirer and ples of human dignity and the social value of
the worker. labour. Nevertheless, these principles did not turn
From 1990 on, however, the power of the out reality as yet. Beyond a doctrine that inter-
movement for labour outsourcing had clear prets the Constitution's social content, economic
impacts on legal decisions. Precedent 256 was growth emerges as a premise for job creation and
reviewed by the Court: first, in 1993; later on,for
in structuring the job market. But growth alone is
2000. The Court has now approved the current not enough: substantive equality has to become
text of Precedent 331, which basically allows concrete; land, wealth and incomes have to be
outsourcing for services not related to the hirer's
distributed; and universal public social policies
have to be sustained and increased.
support activity and states that if the employer

Page 1 9 Volume 16 Issue 3 2009 INTERNATIONAL union rights

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