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 brought significant changes to the Brazilian labor scenario.
Outsourcing Services
Outsourcing in Brazil began in the 1970s and became popular with the economic opening carried out in the 1990s, under the government of Fernando Henrique Cardoso (1994-2002).
Outsourcing services allows a company to hire the service of a company or worker to perform a specific service, without having to pay their salary and pay 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. Making programs, building networks, etc. is the "end 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 perform this task.
However, the same company could not hire computer technicians to work, as they are responsible for the "core activity."
Outsourcing Act 2017
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 who is independent of the activity he 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 project to the sanction, on March 31, 2017, the law provoked controversy. The business community claimed that there would be more hires. However, the opposition and unions argued that the changes would take away more labor rights.
Advantages and disadvantages of outsourcing
The Outsourcing law can bring advantages and disadvantages to companies and employees.
Advantages of Outsourcing
According to liberal thinkers, outsourcing reduces bureaucracy and allows entrepreneurs to hire more, solving the problem of unemployment in Brazil.
- Focus :companies will have more focus to offer 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 firing him. 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 focused on getting customers and offering them a good service. In this way, productivity will increase.
Disadvantages of Outsourcing
The unions and the opposition to the government argue that the worker will be more vulnerable and without protection in the face of abuses by the bosses.
Other consequences would be:
- Dismissals :in the initial phase 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 :the employees will have more turnover and thus, the bosses will end up losing the bond with their employees and this can be harmful to the company's production.
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