Labour Prosecutor's Office enforces employer social responsibility - International Law Office

There has been much debate over the extent of employers' social responsibility. Companies are being urged to increase their level of commitment towards the communities in which they operate if problems arise.

An employer's role is deemed to go beyond merely paying salaries punctually; it also comprises joint responsibility for employees' quality of life and for social issues. This aspect of responsibility derives from the Constitution, which states that economic policy is based on the appreciation of human work, so as to guarantee a dignified existence to all. The imposition of quotas for hiring disabled employees and apprentices is an example of employers' increased social responsibility, as they must incur the costs of inclusion and training.

In this context, the Labour Prosecutor's Office has been inspecting companies to ensure compliance with labour legislation and adequate working conditions. Excessive working hours (even if correctly paid) and the absence of basic hygiene and safety conditions frequently trigger investigation proceedings – or even class actions – that impose formal commitments on employers to rectify unlawful actions.

Surveillance carried out by the prosecutor's office is not only focused on employees. An employer is also deemed liable for irregularities concerning contractors (eg, suppliers and service providers) that are part of a company's production chain. Major companies have been engaged in debate with the prosecutor's office over their alleged obligation to supervise contractors. The prosecutor's office imposes daily fines on companies that hire outsourced parties in a manner that breaches labour laws (especially occupational health and safety rules).

Among the most frequent claims in class actions is the payment of (sometimes substantial) compensation for collective moral damages and 'social dumping', by which entrepreneurs eliminate labour rights with the aim of reducing production costs. To the prosecutor's office, such indemnifications do not aim to penalise entrepreneurs for irregularities (as this is the purpose of administrative fines), but rather seek to avoid the prioritisation of private interests over public interests, as well as serving as a deterrent to further breaches.

This is evidenced by the allocation of these resources to finance social projects and a specific fund for workers' support maintained by the Ministry of Labour for funding employee and unemployment assistance programmes, and for creating jobs and income.

The prosecutor's office encourages the disclosure of formal commitments to remedy unlawful actions and decisions that are favourable to its cause in order to serve as an example to others, and also as a means by which communities can demand socially responsible management from entrepreneurs.

Thus, companies should apply best practice beyond their doors - not only to avoid labour contingencies, but also to uphold their reputation.

For further information on this topic please contact José Carlos Wahle or Carolina Tavares Rodrigues at Veirano Advogados by telephone (+55 21 3824 4747), fax (+55 21 2262 4247) or email (jose.wahle@veirano.com.br or carolina.rodrigues@veirano.com.br).