Labour & Employment | Edition 29
Key Highlights
Collective Bargaining. Employer’s Standing to Initiate Economic Collective Disputes.
The Federal Supreme Court (STF) concluded the judgment of Case 1563175/RJ, confirming that employers have standing to bring economic collective disputes before the courts, and that such standing is not restricted to labour unions, contrary to the interpretation adopted by the Superior Labour Court (TST). The STF also ordered the TST to review IRDR Theme 1 and align it with the Supreme Court’s understanding regarding the validity of the requirement of “mutual agreement” between the parties as a procedural condition for filing collective disputes. This decision is expected to have a significant impact on collective bargaining departments, requiring employers to adopt a more proactive approach to avoid difficulties in negotiations with unions. Source: TST
Labour Enforcement Proceedings. Enforcement Against Shareholders of a Company Under Judicial Reorganisation.
The Superior Labour Court (TST) established a binding legal thesis under Theme 26 concerning the jurisdiction of the Labour Courts to hear and determine incidents seeking the piercing of the corporate veil (IDPJ) against companies undergoing judicial reorganisation. According to the Court’s interpretation, Labour Courts retain substantive jurisdiction to process and decide such incidents even after the amendments introduced by Law No. 14,112/2020, unless the insolvency court has expressly ordered the suspension of enforcement measures against the shareholders of the reorganising company. The Court also held that piercing the corporate veil to redirect enforcement proceedings against shareholders requires evidence of abuse of the corporate personality under Section 50 of the Civil Code. Mere default, insufficient assets or frustration of enforcement proceedings are not sufficient grounds. Source: TST
Labour Enforcement Proceedings. Invalidity of Court Security Provided by an Insurance Bond that Excludes Payment in Certain Circumstances.
The 3rd Panel of the Superior Labour Court (TST) dismissed an appeal due to irregularities in an insurance bond submitted as a substitute for the appeal deposit. The policy contained clauses exempting the insurer from payment in situations such as intentional unlawful acts committed by the insured, breaches of obligations under the insurance contract and events of force majeure or unforeseen circumstances, which are prohibited under TST case law. As a result, the appeal was deemed invalid, and the company’s obligation to pay the employment entitlements awarded in the judgment was upheld. Source: TST
Occupational Health and Safety. Breastfeeding Facilities in Malls.
The Federal Supreme Court (STF) upheld a decision of the Superior Labour Court (TST) requiring malls to provide appropriate facilities where employees may leave their children during breastfeeding periods. According to the STF, malls bear responsibility for the organisation and administration of common areas, which justifies the application of Section 389 of the Labour Code (CLT). This provision requires establishments employing at least 30 women over the age of 16 to provide suitable facilities for the care of children during breastfeeding periods. Source: TST
Occupational Health and Safety. Commencement of Enforcement of Psychosocial Risk Requirements under NR-1.
On 26 May, the punitive phase of the enforcement of psychosocial risk management obligations under Regulatory Standard No. 1 (NR-1) of the Ministry of Labour and Employment (MTE) came into force. Following the end of the guidance period granted to companies, Labour Inspectors are now actively verifying compliance with obligations relating to the identification, assessment and management of factors such as workplace bullying, excessive workloads, unrealistic targets, exhausting working hours and other elements capable of affecting workers’ mental health. Employers that fail to include psychosocial risks within their Occupational Risk Management (GRO) processes and Risk Management Programme (PGR) may be subject to administrative penalties, fines and, in more serious cases, embargoes or suspension of activities. They may also face employment claims seeking compensation for moral damages and lifelong pension payments arising from occupational illnesses related to mental health. Source: MTE
Occupational Health and Safety. Temporary Employees and Pregnancy Protection.
The Superior Labour Court (TST) established a new legal thesis through an Incident for the Overruling of the precedent set in IAC 2, aligning its position with that of the Federal Supreme Court. The Court recognised the right of pregnant employees engaged under temporary employment contracts to benefit from statutory pregnancy-related job protection, establishing 10 October 2023 as the effective date from which the previous precedent is deemed to have been overruled. Source: TST
Racism. Civil Liability Arising from Employer Negligence.
The 1st Panel of the Superior Labour Court (TST) ordered a company operating in the food services industry to offset a waitress who was subjected to racist abuse by a customer. According to the Court, after the employee was verbally abused, the employer failed to intervene, did not remove the aggressor from the premises and neglected to contact the competent authorities, despite having a legal duty to do so under civil law. The reporting Justice held that the company’s negligence constituted subjective liability in relation to damage caused by a third party who was not entirely unrelated to the employment relationship, given that the aggressor was a customer being served by the employee. Consequently, the defence of sole fault of a third party was held not to apply. Source: TST
Social Security Contributions on Payroll. Modulation of the “20 Minimum Wages” Limitation Applicable to the S System
The Special Pannel of the Superior Court of Justice (STJ) concluded the judgment of Special Appeal No. 1905870/PR, the leading case of Theme 1079, which had rejected the application of a ceiling of 20 minimum wages as a limit on contributions payable to third parties SESI, SENAI, SESC and SENAC (the S System) based on payroll. In its recent decision, the Court upheld the modulation previously adopted by the STJ’s 1st Section, preserving the 20-minimum-wage limitation for companies that had filed judicial actions or administrative claims before the commencement of the judgment of Theme 1079, provided they had obtained a favourable court decision. Although the substantive ruling was unfavourable to taxpayers, the Special Pannel’s confirmation of the modulation protects companies that secured favourable decisions before the judgment of Theme 1389, thereby safeguarding legal certainty and taxpayers’ legitimate expectations. The case now awaits further appeals from the National Treasury. Source: STJ
Variable Compensation. Performance Bonuses Do Not Form Part of Salary.
The 15th Panel of the São Paulo Regional Labour Court (TRT 2) upheld an employer’s appeal and acknowledged that bonuses granted voluntarily in recognition of employee performance exceeding expectations do not form part of salary, even when paid regularly, maintaining their indemnity nature. The reporting Justice also emphasised that the employee had failed to provide any evidence of fraud and that the revised concept of performance bonuses introduced by the Labour Reform was therefore applicable. The payments at issue were not considered commissions. Source: TRT 2
Working Time. End of the 6×1 Work Schedule.
The Chamber of Deputies approved a substitute text for Proposed Constitutional Amendment (PEC) No. 221/2019 to reduce the standard working week in Brazil, without salary reduction, from 44 to 40 hours per week, spread over 5 working days with 2 rest days, one of which should preferably be on Sundays, thereby ending the 6×1 work schedule. The text provides for a transitional rule: a reduction to 42 working hours per week after 60 days from the amendment’s entry into force, and a further reduction to 40 working hours per week after 12 months. During this transition period, collective bargaining agreements may extend the normal daily working hours (beyond 8 hours per day) to facilitate the transition to the 42-hour week, provided that the entitlement to two paid rest days is maintained. The amendment provides an exception for employees holding a college degree and earning more than 2.5 times the Social Security contribution ceiling (currently equivalent to BRL 21,188.87), as well as for outsourced workers engaged under labour supply contracts with the public administration. It will also be possible for ordinary legislation to establish specific working time arrangements and compensatory regimes, provided that the applicable limits are respected, including uninterrupted 6-hour shift systems. Individual Microentrepreneurs (MEIs), micro-enterprises and small businesses are excluded from the new rules and are expected to benefit from alternative provisions that are still under negotiation. The amendment now proceeds to the Federal Senate, where it will be considered alongside other proposals on the same subject before being voted upon and subsequently promulgated by the National Congress. Source: Chamber of Deputies
Workplace Harassment. Cameras Installed in a Male Changing Room.
The 2nd Panel of the Superior Labour Court (TST) ordered an employer to pay compensation for moral damages to a machine operator due to the installation of surveillance cameras in the company’s male changing room. Although the cameras were directed towards the lockers, the Court considered their presence intrusive and unlawful. The panel held that surveillance equipment installed in areas associated with personal privacy, regardless of its positioning, infringes individuals’ rights to privacy, private life, honour and image, giving rise to presumed moral damage and an obligation to compensate. Source: TST
Workplace Harassment. Discriminatory Dismissal Based on Weight Discrimination.
The 3rd Panel of the Superior Labour Court (TST) ruled that the dismissal of an employee with Grade II obesity, who had already scheduled bariatric surgery, was discriminatory. The Court found that the dismissal, motivated by weight-based discrimination in conjunction with the employee’s health condition, created a risk of stigma and prejudice. The reporting Justice further observed that the World Health Organization (WHO) acknowledges obesity as a chronic disease resulting from complex interactions among genetics, neurobiology, eating behaviours, limited access to healthy diets, market forces and environmental factors. Particularly in more severe cases, obesity is not a neutral clinical condition but one frequently associated with social stigma, negative stereotypes and prejudice, leading to social exclusion and reduced access to employment opportunities for individuals with obesity, thereby directly affecting equality of opportunity. Source: TST
This newsletter is for informational purposes only. For further clarification, please contact our Labour & Employment team. Machado Associados. All rights reserved.
