September 5, 2019 / 4:04 PM / 3 months ago

Brazil faces 'extraordinary' but crucial challenge on labor reform: government official

FILE PHOTO: Brazil's Secretary of Social Security Rogerio Marinho is seen before ceremony to presentation of the 2nd phase of the advertising campaign of the pension reform bill at the Planalto Palace in Brasilia, Brazil May 20, 2019. REUTERS/Adriano Machado

BRASILIA (Reuters) - Brazil faces an “extraordinary” but essential challenge in deepening labor market reforms, a process that should make the workforce more flexible and help create jobs, work and pensions secretary Rogerio Marinho said on Thursday.

Unemployment in Latin America’s largest economy has been edging lower in recent months but remains stubbornly high at 11.8%, even though Brazil emerged from recession nearly three years ago.

The introduction of more flexible labor laws will not bring unemployment down on its own, Marinho said, but will be part of the right-wing government’s broader free market reform agenda of deregulation and increasing competition.

“The idea here is to consolidate a process that is already underway. What we are advocating is to modernize labor legislation,” Marinho said in Brasilia, noting that fundamental shifts are taking place with formal employment falling and the proliferation of self-employment.

“The world is changing,” Marinho said.

The government will consider its options, which will include trade union reform, over the coming weeks in discussions with lawmakers and the public at large, before putting forward its proposals to parliament within three months.

Marinho said the power and bureaucracy of trade unions in Brazil has “destroyed” the relationship between employer and employee, and the way some unions are structured has been a “source of corruption.”

“We have to look (at) how unions are going to sit at the negotiating table,” in the future, Marinho said, adding that he would like to end the system that allows for only one union per employment category in any given geography, although this will require a constitutional amendment.

In 2017, under the presidency of Michel Temer, Brazil passed the first meaningful reform of labor laws since the 1940s. The changes diluted collective bargaining, reduced the scope for legal action in labor disputes, regulated remote work and gave companies more control over workers’ hours and vacation time.

Reporting by Marcela Ayres; Writing by Jamie McGeever; Editing by Jonathan Oatis

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