BRAZIL Law and Practice Contributed by: Ricardo Barretto Ferreira da Silva and Camila Sabino Del Sasso, Azevedo Sette Advogados
generally apply equally to quotaholders in lim - ited liability companies. Many Brazilian companies offer directors’ and officers’ (D&O) insurance to protect executives from personal liability. Companies may also indemnify officers for costs incurred in legal proceedings, provided there is no misconduct. 4. Employment Law 4.1 Nature of Applicable Regulations The rules governing the employment relation - ship in Brazil are regulated by the Consolidation of Labour Laws (CLT) and the Constitution, as well as other ancillary rules, such as decrees and regulations issued by the Ministry of Labour and Employment. Employment relationships are also regulated by collective bargaining agreements negotiated between unions representing employees and employers or directly between employees and their respective employers. These agreements typically establish salary increases by catego - ry and may also regulate employees’ benefits, which are usually renegotiated on a yearly basis. It is important to note that the terms of offer let - ters, individual employment contracts or amend - ments, labour and social security laws, and the employer’s internal policies must also be com - plied with in Brazilian employment relationships. In addition, direct negotiations between employ - ers and employees with university degrees who earn a monthly base salary equal to or greater than twice the maximum social security benefit are permitted and are treated with the same legal standing as collective bargaining agreements. This type of employee is considered “hyper-suf -
ficient” and has greater autonomy to negotiate the terms of their employment contract. 4.2 Characteristics of Employment Contracts Employment contracts establish the employ - ment terms, which must meet the following requirements: • personal service – the work must be carried out directly by the employee and cannot be delegated to third parties; • subordination – the employee must be sub - ject to employer’s instructions/control; • for compensation – the work is remunerated; and • non-casualness – the work must be per - formed continuously and not occasionally. They are generally executed in writing – although both forms (written and verbal) are permitted by the law. However, in the absence of a writ - ten employment contract, please note that the employment relationship will be governed by the labour laws and the interpretation of such laws will be made by the labour courts. With regard to the duration of contracts, the CLT establishes that they may be indefinite, fixed- term, probationary, temporary or intermittent. Contracts for an indefinite period are the most common type of contract, with no deadline for termination, which may be decided by either party – with or without cause – subject to the legal consequences in each case. Fixed‒term contracts may have a maximum duration of two years with the possibility of extension. Proba - tionary contracts generally have a term of 90 days and may only be extended once, other - wise they are considered to be for an indefinite period. Temporary contracts meet the employ -
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