The uncertainty in hiring an outsourced worker is aggravated because in Brazil the concept of “real contract” is adopted, whereby the employment relationship can always be recognized if the characteristics of a real employee are confirmed in the specific case, regardless of the existence and regularity of a written contract for the supply of outsourced labor.
It is important to note that the Consolidation of Labor Laws (CLT) defines the concept of employee as any individual (not a legal entity) who provides services of a non-occasional nature to an employer, under their dependence (must observe the employer's rules and determinations) and in exchange for a salary.
Therefore, the existence of an employment relationship may be recognized whenever an outsourced worker personally provides services on a regular basis and under the supervision of the service recipient.
In this context, the outsourcing of the company's core activity may be considered null and void by the Brazilian Labor Court, with the legal consequence that the service recipient will be considered the employer of the outsourced workers.
In other words, in a service outsourcing scenario, even if deemed valid and regular, the service recipient may be held jointly and severally liable for the labor rights of the contracted workers. Conversely, if deemed irregular, the service recipient will be jointly and severally liable for all labor rights to which the outsourced worker is entitled.
This scenario may be on the verge of radical change. On March 19, 1998, a bill was proposed regulating the outsourcing of core and non-core activities. After years of debate, on March 22, 2017, the Chamber of Deputies approved the bill, which allows the outsourcing of core activities. President Temer still needs to sign the bill into law, but he can veto it in whole or in part (in which case, the bill will have to be re-discussed by Congress).
The issue of outsourcing in Brazil has always been very controversial because, on the one hand, it can offer an improvement in services through specialization, on the other, many companies seek to outsource their services to reduce labor costs and, in some cases, defraud the law.
Finally, it is important to highlight that the discussion on the outsourcing of services will hardly be concluded even if the bill is sanctioned by the President due to the strong resistance offered by the Labor Court, always against the outsourcing of core activities.
