Reuters International

BRASILIA (Reuters) - A bill that backers say will modernize Brazil's labour laws and ease employment rules for companies was approved by a lower house committee on Tuesday and was headed for a floor vote in the full chamber on Wednesday.

The committee approved the proposal 27-10, a victory for President Michel Temer, who is trying to pass unpopular reforms aimed at bringing Brazil's budget deficit under control.

The government hoped the labour reform bill would clear the lower house on Wednesday and be sent to the Senate before protests and strikes called for Friday by opponents of Temer's reform plans.

Leftist parties and labour unions fiercely oppose the bill, which would cut business costs by relaxing restrictions on temporary workers and outsourcing and by letting agreements between unions and employers override some rules in the labour code.

Separately, Temer's key proposal to reform the country's costly social security system, which accounts for 55 percent of the budget with generous benefits and easy retirement rules, was expected to face a crucial vote in committee on May 8.

Temer had lunch with governors of Brazil's cash-strapped states on Tuesday to secure their backing for the pension reform and get them to mobilise the support of lawmakers from their states.

"They all know that the social security question has to be resolved," lower house Speaker Rodrigo Maia, who hosted the lunch, told reporters. "If there is no reform, no one will be able to pay their public employees."

(Reporting by Anthony Boadle; Editing by Jonathan Oatis)


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