Study predicts end of unemployment insurance and appropriation of FGTS fine

A study commissioned by the Ministry of Labor and Social Security proposes that the federal government appropriate the fine of the FGTS (Guarantee Fund for Length of Service), which today is paid directly to workers fired without just cause.

The proposal is for the money to feed the Guarantee Fund accounts, exclusively, for those who earn up to a minimum wage and a half (R$1,650 currently) per month.

Under the measure, unemployment insurance would be terminated and workers would no longer receive a benefit equivalent to 40% of the FGTS when dismissed without just cause. Instead of paying the fired person, as it is today, the employer would transfer the amount of this fine to the government.

The money would then be allocated to the FAT (Worker’s Support Fund) and, from there, would supply the individual accounts of the Guarantee Fund for employees with a monthly salary of less than a minimum and a half. This contribution to the FGTS of low-income workers would have a fixed period of time: 30 months.

The percentage to be deposited would decrease according to the worker’s salary. For those who earn a minimum wage (R$1,100 today), it would be 16%. In today’s values, the government would deposit, per month, R$176 in the FGTS account of the worker who receives the minimum wage.

To this social contribution would be added the 8% that the employer already deposits in the worker’s account each month. In other words: for 30 months, his individual fund would receive a contribution equivalent to 24% of his salary — 16% from the government and 8% from the employer.

At the end of 30 months, when this worker had the equivalent of 7.2 minimum wages in this kind of savings, the government would no longer deposit. Only the employer would maintain the monthly contribution equivalent to 8% of their employees’ salary.

The correction of this savings would be in accordance with the indices practiced in the market. When the balance reaches the corresponding to 12 minimum wages, the worker will be able to withdraw the surplus. In other words: with 12 minimum wages in the fund, the worker can withdraw the 8% deposited by the employer.

If dismissed, the worker could withdraw monthly the equivalent of the salary he received when he was employed, respecting the ceiling of five minimum wages. As the model foresees a minimum savings of 12 minimum wages, if unemployed, he could withdraw one salary per month.

The proposals are in the report prepared by the Gaet (Grupo de Altos Estudios do Trabalho), at the request of the Jair Bolsonaro (PL) government to subsidize a labor reform. ​Gaet was created in 2019.

The set of proposals was presented by the ministry, on November 29, to the National Labor Council. The text brings together contributions from magistrates, lawyers, economists and academics.

The 262-page document was published in November this year. The works were organized into four committees with thematic axes. The proposal for the extinction of unemployment insurance and the appropriation of the fine in the event of unfair dismissal is included in the “Economy of Labor” chapter.

“With a view to complementing unemployment insurance resources in financing initial contributions to individual funds, the fine for unfair dismissal is no longer appropriated in part by the worker and is now paid in full to the government,” the report states.

The idea, according to the authors, is to encourage job stability. “This provision, in addition to ensuring the possibility of an increase in public subsidies for workers’ precautionary savings, removes from them any possible incentive that the appropriation of the fine may give them to change jobs”, says the report.

The group’s coordinator, Inper professor Ricardo Paes de Barros claims that the proposal reduces social inequality. The intention, according to him, is that all low-income workers accumulate savings of 12 minimum wages, accelerating this accumulation.

“These are parameters that can be adjusted. But low income, for us, is basically between one and a half minimum wage. For these workers, transfers will be made. For high income, nothing,” he said.

Also according to the professor, the idea is to avoid unnecessary antagonisms between employer and employee, because, according to him, workers can encourage their dismissal in order to receive a fine.

“Someone might say: ‘If I get fired, I’m going to get a high fine. I have an offer from another company there, I’m going to force my resignation'”, he justifies.

On the idea of ​​appropriating the fine paid to the worker in the event of unfair dismissal, he insists that the penalty will not cease to be applied.

“We are not removing the fine that the entrepreneur pays. We are simply removing the fine that the entrepreneur pays and giving it to the State to put in the worker’s FGTS”.

In its pages, the Gaet report emphasizes that “the documents do not necessarily have the full or partial agreement of this Ministry of Labor and Welfare or even the federal government. In other words, the reports of the Thematic Study Groups are from sole and entire responsibility of the authors”.

According to the ministry, “the action of the federal government will be based on and built through dialogue with society, its representation in parliament and the economic and social needs of the country.”

“The position of dialogue and construction is the one that guides the government at the present time,” he says.

Report from leaf showed that among Gaet’s suggestions are the release of work on Sundays and the prohibition of recognition of employment relationship between service providers and applications.

Specialists also defend the lockout —a kind of strike by companies—, which is currently prohibited, and the reduction of the power of the Labor Court.