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By
Reuters
Published
Feb 23, 2010
Reading time
2 minutes
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Brazil's industry warns on bill to cut work week

By
Reuters
Published
Feb 23, 2010

BRASILIA, Feb 23 (Reuters) - Brazilian business leaders warned on Tuesday 23 February that a bill to reduce the work week by four hours would boost labor costs and make several key industries in Latin America's largest economy less competitive.



The top brass of Brazil's industry federations met congressional leaders to persuade them from voting on the bill. Government leaders in the Chamber of Deputies, the lower house of Congress, are pushing to put it to a vote in coming weeks.

The constitutional reform proposal backed by labor unions would slash the amount of hours employees are expected to work to 40 hours a week from 44 hours, without reducing pay. It would apply to the public and private sectors.

The bill would also increase overtime pay to 75 percent of a regular hourly wage from the current 50 percent.

Business leaders say it would harm Brazil's international competitiveness, already suffering from the heaviest tax burden in Latin America and onerous red tape. They say the proposal is aimed to sway voters before the Oct. 3 general elections.

"As we are in an election year, the real reason for reducing the work week is in doubt," Paulo Skaf, head of the influential Sao Paulo State Industry Federation, or Fiesp, said in a statement.

During a national convention last weekend, the ruling Workers' Party, or PT, included the 40-hour work week in its campaign platform.

The government has a solid majority in the Chamber of Deputies and a narrow majority in the Senate.

Labor Minister Carlos Lupi has said that the bill could generate as many as 3 million jobs.

But critics say labor-intensive sectors, such as the textile and shoe industries, might lose jobs to automation.

"It's proven that the reduction of the work week did not generate jobs in France, Germany and Italy," said Alcantaro Correa, head of the industry federation of Santa Catarina, a state in southern Brazil.

(Reporting by Raymond Colitt; editing by Paul Simao)

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