The recently approved labour reform allows arbitration in individual employment agreements, provided that the employee's monthly salary is twice as high as the cap on social security pensions and the arbitration clause is proposed or expressly agreed by the employee, according to the Arbitration Law. This means that employees with a higher level of education and income can now sign employment contracts for the settlement of any disputes through arbitration.
The Superior Court of Justice has reversed previous Sao Paulo State Court rulings and recognised the validity of foreign ship mortgages in Brazil. Respecting the acts of sovereignty of countries where vessels are registered, the court highlighted the economic importance of acknowledging ship mortgages of foreign states and emphasised that large vessels must be registered in their flag states and that these registrations have extraterritorial effects.
The president recently approved in full a bill passed by Congress that will substantially change the existing punitive rules for crimes and misconduct carried out within the capital and financial markets. The new law introduces some relevant changes to the rules through which the Central Bank and the Securities Commission may punish offences and to the definitions and scope of application of certain financial crimes and wrongdoings, such as insider trading and market manipulation.
The continuity of traditional healthcare models seems unlikely with the breakthrough of disruptive technologies. Historically, the healthcare sector has been slow to implement technological tools that have quickly transformed other areas of people's daily lives. However, a promising solution to address the interoperability, integrity and security challenges presented in the healthcare sector seems to be blockchain technology.
The use of outsourcing has historically been uncertain in Brazil, particularly in relation to the outsourcing of a company's core business. However, once in force, the labour reform will create a scenario of greater legal certainty for outsourcing because it expressly authorises the outsourcing of any activities, including a company's core business.
The full bench of the Superior Court of Justice recently refused the recognition and enforcement of two arbitral awards issued by an arbitral tribunal seated in New York under the International Chamber of Commerce Rules. This decision is historic and important for arbitration, as it is one of the rare cases in which the Superior Court of Justice failed to recognise a foreign arbitral award.
According to a precedent established by the Superior Labour Court, the acquiring company is not liable for the labour debts of other companies within a corporate group that encompasses the acquired company, provided that the entities – at the time of the transaction – were creditworthy or economically viable, except in the case of bad faith or fraud. However, a recent reform to the Labour Code will enter into force in November 2017 and may change the existing understanding in this regard.
The Brazilian National Agency of Petroleum, Natural Gas and Biofuels recently published Notice of Public Consultation and Public Hearing 20 in order to collect input regarding the new rule which will increase the flexibility of the local content rules provided for in concession contracts entered into between the seventh and 13th bidding round for onerous assignment, as well as the first production sharing bidding round of the exploration of oil and natural gas blocks.
The initial expectation from some market analysts with respect to the outcome of Brazil's 14th bidding round was conservative, with Brazil's political turmoil and the downturn in the oil and gas sector clearly inciting this uncertainty. However, it seems that the government's initiative to extend the special customs regime for the import of rigs, vessels and equipment until 2040, as well as its adjustment of the rules in relation to local content requirements, ensured the round's success.
Federal law provides that all vessels registered before Brazil's port captaincies must buy the mandatory insurance for personal injury caused by vessels or their cargo. However, such insurance has been discontinued due to a lack of insurers willing to underwrite the risks involved. Now, after a number of passenger fatalities in recent accidents, industry players and the government are being called on to ensure that policies are offered which soften the burden borne by victims and their families.
The Ministry of Labour recently published Ordinance 790, amending Regulatory Standard 34 on Working and Environmental Conditions in the Shipbuilding and Ship Repair Industry. The amendments also regulate ship demolition activities. According to the Ministry of Labour, this is because the Brazilian fleet is aging and thus the demand for ship demolition activities may increase.
A majority of the Supreme Court recently ruled that the rules and international treaties limiting the liability of passenger airline carriers – in particular, the Warsaw and Montreal Conventions – prevail over the Consumer Protection Code. Among other things, this decision means that the value of compensation for lost luggage will be limited to the threshold set out in Article 22 of the Warsaw Convention and the amendments made by subsequent international agreements.
The need to modernise the procedural rules applicable to the labour procedure has long been a concern in Brazil. As such, it was well known that labour relations were being modernised and that the law did not satisfactorily account for this progress. In light of this, the newly enacted Law 13,467/2017 will introduce, among several changes not seen in prior legislative amendments, equal treatment of litigating parties and greater legal certainty for both litigating parties and Brazilian society as a whole.
Advances in technology and the so-called 'fourth industrial revolution' continue to have an effect on society. For instance, telemedicine has rapidly developed and transformed the services provided by healthcare providers worldwide. Due to the expansion of telemedicine in Brazil, the Federal Council of Medicine intends to review and update Resolution 1643, which will hopefully attract new players to the market.
The National Council of Private Insurance recently submitted for public consultation a draft regulation on the acceptance of retrocession by insurers and its intermediation. Among other things, the draft regulation allows insurers to accept retrocession risks from foreign reinsurers not registered with the Superintendence of Private Insurers (SUSEP) through foreign reinsurance brokers also not registered with the SUSEP, provided that the local insurer is authorised to operate in the lines of risks accepted.
The recently approved labour reform has amended several articles of the Labour Code and Laws 6,019/1974 (temporary employment), 8,036/90 (severance fund) and 8,212/1991 (social contributions). The legislation still protects the constitutional rights of workers. However, it seeks to modernise labour relations by creating rules and defining concepts which allow workers, companies and unions to have more freedom to negotiate their rights.
For the past few months, the Brazilian Aeronautical Registry has experimented with a new electronic filing system that allows parties to file documents electronically 24 hours a day, seven days a week. This system is now operative for documents relating to commercial aircraft. Documents relating to private aircraft, business aircraft and helicopters are still being filed physically. The new electronic system is expected to become available to them during the second half of 2017.
Brazil's complex and inefficient tax system is known worldwide. In addition to a heavy tax burden, the tax compliance costs that companies must bear in order to do business in the country are particularly high. This is also the case for the healthcare sector. However, there are specific cases of tax exemption, 0% tax rates and other exceptions which aim to reduce the final price of pharmaceutical products, devices and equipment. Several of these rules add to the complexity of Brazil's puzzling tax system.
The Sao Paulo State Court was recently faced with a dispute between the contracting parties to a franchise agreement. While the judge rapporteur recognised that the Brazilian legal system provides for competence-competence as a general rule, given the circumstances of this case, he declared the arbitration clause in the relevant franchise agreement to be null.
Struggling against one of the most severe financial and political crises, the government has adopted an agenda that aims to spur an uptick in the economy and reduce the unemployment rate, which hovers around 13%. In this regard, the government has proposed labour and social security reforms. However, some employee unions are urging a general strike across the entire country to obstruct these reforms.