By Israel Cruz

The suspension of the employment contract occurs when, without termination, the employee stops working and the employer stops paying wages. With the onset of the pandemic brought about by the COVID-19 virus (Coronavirus), many business owners have suffered from the sudden and unexpected decline in their businesses, and in some sectors, activity has even come to a standstill.

This creates a crisis in which employers will sometimes not have the means to maintain their employees while the pandemic lasts and for this reason they will have to lay off qualified workers who are already in line with their principles. However, when the pandemic is over and activities resume, it will be necessary to rehire a huge contingent of workers.

Thus, discussions will arise about the possibility of suspending the employment contract for a fixed period, which is currently not permitted by our labor legislation directly with the employee.

It is worth noting that the Minister of Economy Paulo Guedes announced that the government would be analyzing the possibility of suspending employment contracts to avoid layoffs, according to news published by the website O Globo.[1]

However, if the news does not materialize, we understand that it is possible to negotiate a clause for the suspension of the employment contract for the purposes of maintaining jobs in a collective labor agreement.

Due to the major crisis affecting the sector, the Union of Workers in Fast Food Companies of São Paulo has reached an agreement with the Union of Restaurants, Bars and Similar Establishments of São Paulo to amend the collective agreement with a clause that provides for the possibility of suspending the employment contract for up to 120 days upon payment of compensation of 50% on the salary value. Since this is a compensation payment, it will not be subject to the effects of taxes, social contributions, among others.

Therefore, we understand that suspensions of employment contracts could be a great ally for companies to minimize the effects generated by the crisis we are facing.

This procedure may be especially interesting if there is a determination of collective isolation, since under Law 13979/20, the days in isolation will be considered as justified absence, which will burden the employer with the payment of the full salary.

[1]Government evaluates temporary suspension of employment contracts to avoid layoffs, news accessed on 03/19/2020 at 2:30 pm,  https://oglobo.globo.com/economia/governo-avalia-suspensao-temporaria-de-contratos-de-trabalho-para-evitar-demissoes-1-24312652