Last August 26 the Department of Labor and Social Welfare published a document with a guide for natural persons or entities executing specialized services or works within the framework of the reform on subcontracting.
The Guide states that its objective is providing certainty and clarity on the rules for obtaining registration of specialized activities in the REPSE [Registry of Specialized Services or Specialized Works], specifying that natural persons or entities who execute specialized works and wish to provide specialized services to a third party (contracting party) and who, to this end, must put their own workers at disposal of a third party must register.
Unfortunately, the expression of “to this end, must put their own workers at disposal of a third party”, which is so widely used in this guide, as in the Resolution in which the provisions of a general nature for the registration of natural persons or entities for the provision of specialized services or the execution of specialized works are made known, contradicts the prohibition to subcontracting set forth in Article 12 of the Federal Labor Law and the contents of Article 13 of the same Law.
Article 12 is very clear in defining what is prohibited:
“Article 12.- Personnel subcontracting is prohibited, understanding this as when a natural person or an entity puts at disposal of another their own workers to perform a service.
………”
For its part, Article 13 of the Law establishes:
Article 13.- Subcontracting of specialized services or of the execution of specialized works that are not a part of the corporate purpose or of the main economic activity of the beneficiary is permitted, if the contractor is registered in the public registry referred to in Article 15 of this Law.
…”
As can be seen, this last article does not specify, at any time, that to provide specialized services or works their own workers can be made available to a beneficiary, as this would contravene the abovementioned Article 12.
In Section VI of the Guide, under “Aspects to consider”, this contradiction is noted again in Numeral 1.
“1. Putting at disposal one’s workers for the benefit of a third party occurs when one or several workers conduct specialized services at a location or work facility (property of or under the responsibility of the contracting party) different from the party with which that have a labor relationship (contractor) and, therefore, the contractor must be registered in the REPSE and this must be reflected in the legal instrument subscribed between the contracting party and the contractor.”
The foregoing implies that, according to the criterion included in the guide, through the sole fact that the services of a contractor are provided at the facilities of a contracting party, his workers are at disposal to the latter, which is absolutely false, as the workers continue to be subordinated and are at the service of their employer, not at the service of contracting party; if we understood this in any other way, we would fall within the provision prohibited in Article 12 of the Law.
To make things more confusing, the following Numeral 2 states:
“2. In cases in which the workers of a company conduct work at the facilities of another one, it will be considered that personnel is put at disposal of another when the workers of the former conduct their work at the facilities of the latter in a permanent, indefinite or periodic manner and, therefore, in this case, the company that puts at disposal the workers to another must be registered in the REPSE and accredit the specialized nature of the work that its workers conduct at the facilities of the other company, as long as they do not have the same corporate purpose or main economic activity.
The foregoing leads us to the question on if the provision of Numeral 1 takes place, regardless of whether the work is conducted at the facilities of the contracting party, only as long as the services are provided in a permanent, indefinite of periodic manner?
Could we interpret, then, that if an equipment repair is conducted on the facilities of a company by an independent third party, on the basis of parts replacement cost plus labor, which can take only hours or several days, not being permanent, indefinite or periodical, does it fall outside of the provision of Article 15 of the Federal Labor Law and, therefore, it is not necessary to register in the REPSE?
Now, what happens when the service contract consists of auditing activities on the operation of the contracting party, which necessarily entails an independent position by the personnel of the contractor, but which must be conducted at the facilities of the former, for an indefinite period? In this situation it would be absurd for the personnel of the contractor to be at disposal of the contracting party, as this would undermine their purpose.
Numeral 9 establishes:
“9. In those cases, involving the acquisition of goods, regardless of the origin of the contractual legal relationship and in which the contractor has the obligation of making its delivery at the work center, premises, or branch of the contracting party, it is not considered necessary that the registration at the REPSE apply.
This provision is unnecessary, in addition to being technically deficient as, in this case, we are not faced with a service agreement but a sales agreement, which is not subject to Labor Law and the parties are not contractor and contracting party, but seller and buyer.
Lastly, Numeral 10 of this section establishes:
“10. In those cases, in which there is a provision of services, regardless of the origin of the contractual legal relationship, in which workers are put at disposal of another, registration in the REPSE must have been obtained.”
Once again, the Department of Labor has confused the provision of specialized services or works with the condition that the contractor’s personnel has to be at disposal of the contracting party, when the provision of a service does not consist of placing one’s own workers for the benefit of a third party, a provision prohibited by Article 12 of the Federal Labor Law.
We believe that all this confusion has its origins in Articles 13 and 15 of the Federal labor Law, upon its regulation of agreements and legal provisions not of a labor nature, but of a civil or commercial nature, conditioning the provision of these services or activities to a registration that involves a limitation of the freedom of work included in Article 5 of the Constitution.
We, of course, remain at your service in case of any untoward action by the labor authority.
