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Rio Business Opportunity

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Submitted By peishyanlow
Words 1063
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Legal Systems/Issues (Pei Shyan Low 4518416)
3.0 Legal Systems The most common types of legal systems adopted by countries, is that of common law and civil law. Rio de Janeiro is one of the 27 states in Brazil, which happens to be a civil law country. The supreme rule in Brazil is the Federal Constitution (IALS 2014). The Brazilian legal system is established on codes and legislation enacted by the Federal Constitution, and also by the legislatures from the states and municipalities (LOC 2015). Brazil’s judicial system consists of the Federal Supreme Court, the Superior Court of Justice and a range of provincial federal courts (IALS 2014). The municipal government in Rio is made up of executive and legislative powers. The mayor holds the highest position in the municipality, who is elected by the majority vote (LOC 2015). The executive power is held by the municipality (Xavier and Magalhães 2003). The municipal chamber of Rio de Janeiro holds the legislative power (Xavier and Magalhães 2003).

This overview is created for Disney who aim to broaden their knowledge of Brazil’s legal system for the launching of a new theme park in Rio. In order for Disney to ensure success in its expansion in Rio, the legal issues and implications must be considered in order to predict any risks they may face in the future.

3.1 Importance of Legal Considerations The Walt Disney Company has a fairly long record in franchising, and they have produced theme parks all around the globe. Franchising is the license or the common agreement of doing business between two independent forms (Wright, Johnston & Mackenzie 2012). There are many legal considerations to take in account such as the safety of the goods and products that will be sold and served. It is crucial that the products being sold in the theme park is legal and abide by the safety requirements, to ensure the consumer’s safety (Disney 2014). Besides that, Disney must provide team training and safety programs for the park’s employees. The park must be secure for both consumers and employees working at the park (Disney 2014). There are also regulatory approvals when it involves foreign businesses (Amm and Terry 2011).

3.2.1 Workplace Law The Brazilian labour law is controlled by the Federal Constitution, the Civil Code and the Brazilian consolidation of labour laws (Consolidação das Leis do Trabalho or CLT) (Angloinfo 2014). The CLT requires employers to pay for additional costs for workers, such as healthcare, food and grocery expenditure, taxes transportation costs, and a “thirteenth salary” which is also known as additional month’s pay every December (James 2011).
The Brazilian Labour Law does not prevent foreign businesses from hiring employees to work in Brazilian districts or nations. It would be slightly difficult as Disney is required to obtain a Brazilian taxpayer number to comply with Labour and Social Security obligations, to hire employees in Rio (Alves 2015). The laws regarding employment discrimination are mostly influenced by the Federal Constitution (Alves 2015). The most important articles are 5(X); prohibiting an individual’s privacy from violationg and and ensuring the individual with compensation for any material or emotional damages caused, 3(IV); the well-being of all without any form of discrimination and 5(XLI); punishment by law towards any discrimination that are against constitutional rights and freedom (Reichert 2002). Employers in Brazil are cautioned to avoid any discriminatory actions whatsoever as the defense for the violation of discrimination laws is practically non-existent (Baker & McKenzie 2006). Disney can however be protected against these allegations, by implementing a code of conduct with suitable policies that relate to the termination of employees.

3.2.2 Consumer Law The Brazilian Consumer Protection Code (Federal Law 8.078) bans any products that may cause harm to a consumer’s health and safety, along with disingenuous products (Diazreus 2012). Disney should be especially mindful of the three main provisions under the Consumer Protection Code (CPC), which are advertising, product liability, and the contractual issues. Brazil holds a relatively high standard for product qualities especially for foreign products (Diazreus 2012). Article 12 of the CPC requires suppliers to provide the consumer with compensation for any damage caused by the flaws in the product itself (Diazreus 2012). Therefore, Disney would be held responsible for any of its damaged products and would have to give consumers compensation. Aside from that, the CPC also protects consumers against falsely advertised good along with products that do not include important information that consumers should be aware of (Diazreus 2012). In Brazil, false advertising could lead to punishments such as a fine and even jail time (Diazreus 2012). Disney must be aware of this and see that their marketing strategy conforms to the CPC. In the event a consumer chooses to abandon a contract, the CPC allows consumers a weeklong grace period (Diazreus 2012). Disney is recommended to include a binding clause in their contracts to satisfy the CPC. (804 words)

References
Memess, H 2014, An introduction to legal research in the jurisdiction of Brazil, Institute of Advanced Legal Studies, viewed 30th April 2015, http://libguides.ials.sas.ac.uk/brazil (Pei Shyan Low 4518416)

Xavier, H and Magalhães, F 2002, ‘The Case of Rio de Janeiro’, Urban Slums Report, 2002, viewed 1 May 2015, http://www.ucl.ac.uk/dpu-projects/Global_Report/pdfs/Rio.pdf (Pei Shyan Low 4518416)

Gary, J 2011, Business Basics in Brazil, Journal of Accountancy, 2011, viewed 2nd May 2015, http://journalofaccountancy.com/issues/2011/nov/20114143.html (Pei Shyan Low 4518416)

Alves, L 2015, Labor and Employment 2015, Latin Lawyer, viewed 30th April 2015, http://latinlawyer.com/reference/topics/62/jurisdictions/6/brazil/ (Pei Shyan Low 4518416)

Diazreus 2012, Complying with Brazil’s Consumer Protection Code, viewed 1 May 2015, http://diazreus.com/complying-with-brazils-consumer-protection-code/ (Pei Shyan Low 4518416)

Swisscam Brasil 2013, Consumer Law in Brazilian Law, viewed 1 May 2015, http://www.swisscam.com.br/14.-consumer-law-in-the-brazilian-law.html (Pei Shyan Low 4518416)

Botelho, F and Ponczek, V 2006, Segmentation in the Brazilian Labor Market, ANPEC, viewed 2nd May 2015, http://www.anpec.org.br/encontro2006/artigos/A06A020.pdf (Pei Shyan Low 4518416)

Library of Congress 2015, The Legal System of Brazil, viewed 2nd May 2015, http://www.loc.gov/law/help/legal-research-guide/brazil-legal.php (Pei Shyan Low 4518416)

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