Outsourcing or "outsourcing" is the act of a company hiring another company or people to carry out a professional activity.
The company or person hired, however, will only have a commitment to the contractor for the duration of the work to be performed.
Law No. 13,429/2017 regulates temporary and outsourced work in Brazil, and has brought significant changes to the Brazilian labor scenario.
Outsourcing of services
Outsourcing in Brazil began in the 70s and became popular with the economic opening that took place in the 90s, during the government of Fernando Henrique Cardoso (1994-2002).
Outsourcing services allows a company to contract the service of a company or worker to perform a specific service, without having to pay their salary and pay for labor rights.
Initially, outsourcing was only allowed when a company or person performed a "middle activity".
Let's look at an example:
A computer company employs technicians, programmers and engineers. Make programs, build networks, etc. is the "core activity" of this company. In other words: this is the purpose for which it was opened.
However, to carry out the cleaning and surveillance functions, which are called "middle activity", you could hire a specific firm to carry out this task.
However, the same company could not hire IT technicians to work, as they are responsible for the "core activity."
2017 Outsourcing Law
Law No. 13,429/2017 is known as the "Outsourcing Law", as it regulates outsourced and temporary work in Brazil.
This law allows any company to hire a worker regardless of the activity they will perform. Thus, it is now possible to have people who carry out the "core activity" of a company, but without characterizing a link with it.
From the bill to the sanction, on March 31, 2017, the law provoked controversy. The business community claimed that there would be more hiring. However, the opposition and unions that defended that the changes would take away more labor rights.
Advantages and Disadvantages of Outsourcing
The Outsourcing Law can bring advantages and disadvantages for companies and employees.
Advantages of Outsourcing
According to liberal thinkers, outsourcing reduces the bureaucracy and allows entrepreneurs to hire more, solving the unemployment problem in Brazil.
- Focus: companies will be more focused on offering better services or products, as they will only be concerned with improving the service for which they were created, etc.
- Simplification: the company will not have to worry about the costs of hiring the worker or his dismissal. Who will do it will be the company that hired him. In fact, the employee is quickly replaced by another if he is not doing his job well.
- Productivity: since the company does not have to worry about services such as cleaning and surveillance, all efforts will be concentrated on finding customers and offering them a good service. In this way, productivity will increase.
Disadvantages of outsourcing
The unions and the opposition to the government, defend that the worker will be more vulnerable and without protection in face of the abuses by the bosses.
Other consequences would be:
- layoffs: In the early stages of law enforcement, many workers will be laid off. Some will be rehired as outsourcers, and others will be replaced by people who will accept to earn less.
- Turnover: employees will have more turnover and thus, bosses will end up losing the bond with their employees and this can be harmful to the company's production.
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