Brazil's Bolsonaro says govt may cut worker protections to boost job creation

Brazil's President Jair Bolsonaro attends the ceremony marking his 200 days in office at the Planalto Palace in Brasilia, Brazil on July 18. -Reuters photo

BRASILIA - Brazilian President Jair Bolsonaro said on Sunday that the government may look at making it less expensive for employers to fire workers, as it seeks fresh ways to stimulate a weak economy.

Employers in Brazil contribute to a fund called FGTS, which employees can draw from in certain circumstances such as buying a home, loss of employment or serious health problems.

Currently, if an employer fires a worker without just cause, they are liable to pay the individual up to 40% of the total contributions made by the company for that worker to date. Additionally, since 2001 employers must also pay a further 10% levy to the government.

"Look, the value (of the FGTS fine) is not in the Constitution," Bolsonaro told reporters. "What I'm trying to offer the worker is this: fewer rights and jobs, or all their rights and unemployment."

Brazil's economy is struggling to emerge from a crippling recession and Bolsonaro's government is focused on passing through Congress a pension overhaul that it has said will prop up public finances and kickstart growth.

Last week, Bolsonaro said the FGTS fine was designed to prevent firms from firing workers, but argued it had instead made them unwilling to hire.

On Saturday, Bolsonaro said Brazil's federal government would need to cut its budget by 2.5 billion reais ($667 million) as weak economic growth continues to squeeze revenue. -Reuters