Labour & Employment | Edition 37

06.11.2026

Key Highlights

Workplace Accident. Non-Pecuniary Damages Awarded to Family Members

The Individual Disputes Subsection I of the Superior Labour Court (TST) unanimously upheld a ruling ordering a company to pay compensation for non-pecuniary damages to the sister of an electrician who died after suffering an electric shock at work. The panel applied the binding precedent established under Theme 181 of repetitive appeals, according to which indirect non-pecuniary damage arising from an employee’s death in a workplace accident is presumed in respect of members of the immediate family, including children, parents, siblings, spouses and partners. Although this presumption is rebuttable and allows evidence to the contrary, it dispenses with the need to demonstrate individual suffering. The decision highlights the need to strengthen accident prevention measures, training and oversight of internal safety procedures to mitigate employers’ financial and reputational risks. Source: TST

Sexual Harassment. Assessment of Indirect Evidence

The 8th Panel of the Superior Labour Court (TST) ordered a company to pay compensation for non-pecuniary damages to a female employee who was sexually harassed by her superior during a business trip. Although there were no eyewitnesses, the panel considered other evidence corroborating her account, including testimony from a colleague who had observed the employee’s emotional distress and witnessed subsequent incidents of harassment and embarrassment. In applying the guidelines for adjudication from a gender perspective, the Court emphasised that such conduct generally occurs without third parties being present, making it difficult to obtain direct evidence. In view of the approach adopted by the Courts when assessing evidence, employers are advised to strengthen their reporting channels, ensure that complaints are thoroughly investigated and implement effective measures to protect against and prevent harassment, including in connection with the obligations already established under Regulatory Standard No. 1 issued by the Ministry of Labour and Employment. Source: TST

Homophobia. Discrimination in the Workplace

The 83rd Labour Court of São Paulo ordered a television broadcaster to pay compensation for non-pecuniary damages to a text editor following homophobic remarks made by his superiors. The judgment recognised that the offensive remarks concerning the employee’s sexual orientation, combined with the employer’s failure to adopt preventive and corrective measures, constituted discriminatory conduct and violated the employee’s dignity and personality rights. In this context, non-pecuniary damage was presumed, dispensing with the need to prove actual harm. The decision, which remains subject to appeal before the Regional Labour Court of São Paulo (TRT SP), reinforces the need for companies to review their harassment and discrimination prevention policies, provide training to managers and employees, and strengthen their reporting channels, ensuring that complaints are effectively investigated and appropriate measures are taken. Source: TRT SP

Dismissal for Gross Misconduct. Seriousness of Conduct and Criminal Acquittal

The 5th Panel of the Regional Labour Court of São Paulo (TRT SP) unanimously upheld the dismissal for gross misconduct of an early-years teacher who had forcefully pulled a five-year-old pupil by his jacket. The panel considered that the conduct, which was recorded by security cameras, had undermined the trust necessary for the continuation of the employment relationship, particularly in view of the duty of care inherent in the employee’s role. The disciplinary measure was imposed two days after the incident, thereby satisfying the requirement for prompt action. The Court clarified that the criminal acquittal did not prevent the conduct from being classified as serious misconduct, as the acquittal merely ruled out the criminal intent required to establish the offence of ill-treatment, without denying that the incident had occurred. The Court also emphasised that, as a general rule, Brazilian labour legislation does not require private-sector employers to conduct prior administrative proceedings before imposing disciplinary sanctions. As practical guidance, employers are advised to investigate and properly document misconduct, assess the seriousness of the conduct and the proportionality of the disciplinary measure, and clearly communicate the reasons for dismissal, whilst observing any procedures established under internal policies or collective bargaining agreements. Source: TRT SP

Voluntary Redundancy Scheme Does Not Override Constitutional Guarantees

The 3rd Panel of the Regional Labour Court of São Paulo upheld a decision declaring null and void a clause in a public company’s Voluntary Redundancy Scheme (PDV) that made participation conditional upon employees waiving existing legal claims. The panel upheld the employee’s right to participate in the scheme without prejudice to existing legal proceedings, finding that, in the circumstances, the requirement constituted an abuse of the employer’s managerial authority and an undue restriction on access to justice. The decision emphasised that collective bargaining autonomy is not absolute and must respect fundamental rights, such as equality and access to the courts. The ruling highlights the risk of legal challenges to restrictive eligibility conditions in redundancy schemes, without amounting to a general prohibition on settlement and discharge clauses in such programmes. Accordingly, companies are advised to review eligibility requirements and the scope of waiver and discharge clauses, taking into account applicable collective bargaining agreements and relevant case law, in order to reduce the risk of judicial invalidation. Source: TRT SP

Working Hours. Divisor of 220 Established Through Collective Bargaining Applies to Reduced Working Hours

The Full Bench of the Superior Labour Court (TST) established a new binding precedent under Theme 316, recognising the validity of collective bargaining agreements that establish a divisor of 220 for employees working 40 hours per week, in accordance with Theme 1,046 of the Federal Supreme Court. This interpretation provides consistency on an important issue concerning the calculation of employment-related payments, particularly following the approval of Constitutional Amendment No. 141/2026, which abolished the six-day working week followed by one day of rest (6×1 schedule) and provided for a gradual reduction in weekly working hours from 44 to 40 hours. Source: TST

Migrant Workers. Vulnerability in Contractual Discussions

The 1st Panel of the Regional Labour Court of Paraná (TRT PR) ordered a company to pay compensation for non-pecuniary damages to a Venezuelan worker who had been pressured into signing a dismissal document for gross misconduct without adequately understanding its contents. The employee, who faced language difficulties, was prevented from taking the document away for external review and, after refusing to sign it, was dismissed without cause the following day. The panel found that the employer’s conduct breached the duties of good faith, loyalty and disclosure, considering that linguistic, legal and cultural barriers had increased the worker’s vulnerability. The absence of a signature did not prevent the employer from being held liable, as the attempt to exert undue pressure was itself considered unlawful. Source: TRT PR

Use of Employees’ Images. Promotional Videos

The 3rd Panel of the Regional Labour Court of Minas Gerais (TRT MG) upheld a ruling ordering a retailer to pay compensation for non-pecuniary damages to a sales assistant who had been required to record promotional videos wearing tight-fitting and low-cut clothing that caused her embarrassment. Although the employee had authorised the commercial use of her image, the authorisation did not provide for an obligation to produce videos, specify their content or establish the frequency of recordings, nor was this activity included in her employment contract. Witness evidence confirmed that participation was compulsory and that the clothing used differed from what had initially been communicated. The Court found that the requirement violated the employee’s personality rights. Accordingly, employees’ participation in advertising campaigns should be agreed in advance with the employer, with clear information provided regarding the recordings and the clothing to be worn, avoiding compulsory participation and mitigating the risk of embarrassment and harm. Source: TRT MG.

Social Security Contributions. Signing Bonuses

The 2nd Panel of the Superior Chamber of the Administrative Council of Tax Appeals (Carf) upheld, by casting vote, the levy of social security contributions on amounts paid to employees as signing bonuses (hiring bonuses). In its ruling, the prevailing interpretation was that such payments, even when made before the commencement of the employment contract, could constitute an advance payment of remuneration for future services and should therefore be included in the social security contribution base. The majority position rejected the reporting member’s interpretation, which considered the payment to be non-remunerative in nature because it had been made before the employment relationship began. The decision reinforces the importance of assessing the nature and payment conditions of bonuses and similar awards, particularly their connection with the provision of services. Companies are therefore advised to review their remuneration policies and contractual arrangements to mitigate the risk of tax assessments. Source: Carf

Social Security Contributions. Absences Deducted During the Notice Period

The 1st Panel of the Federal Regional Court of the 3rd Region (TRF3) unanimously ruled that employers’ social security contributions should not be levied on amounts corresponding to employees’ absences during a worked notice period, provided that such amounts were effectively deducted from their remuneration. The panel held that the absence of payment or salary credit in respect of days not worked excludes those amounts from the social security contribution base, including contributions intended to fund Occupational Accident Insurance (SAT/RAT) and contributions payable to third-party entities. The decision also recognised the right to offset, through administrative procedures, amounts unduly paid during the five years preceding the filing of the lawsuit, adjusted by the Selic interest rate. The Court distinguished these absences from the statutory reduction in working hours during the notice period, provided for under Article 488 of the Consolidation of Labour Laws (CLT), in which case full remuneration remains payable and subject to contributions. The ruling highlights an opportunity to review procedures for calculating contributions on termination-related payments. Companies are therefore advised to examine records of employee absences and the corresponding payroll deductions, as well as assess the possibility of recovering amounts unduly paid. Source: TRF3

Social Security Contributions. Funrural Contributions for Individual Rural Producers Ruled Unconstitutional Until 2018

The Full Bench of the Federal Supreme Court (STF), in its judgment of Direct Action of Unconstitutionality (ADI) No. 4,395, ruled by majority that social security contributions levied on the gross revenue arising from the sale of agricultural production by individual rural producers, in lieu of contributions on payroll, were unconstitutional in respect of the period prior to 1 January 2018. The ruling also covered the statutory substitution mechanism under which purchasers of agricultural production, such as meat-processing companies and cooperatives, were responsible for collecting and paying the contributions. The decision represents a departure from the Court’s previously established position, whilst preserving the constitutionality of the levy from 2018 onwards. At the time of the judgment, the Court did not determine whether the effects of its decision should be limited in time, leaving that issue for subsequent consideration. The outcome may affect tax assessments and legal disputes concerning periods prior to 2018. Potentially affected companies are therefore advised to review their historical contributions, the existence of administrative or judicial proceedings and the possible financial implications, taking into account applicable time limits and procedural restrictions. Source: STF

Social Security Contributions. Interest on Equity Paid Through Investment Funds

The 2nd Panel of the Superior Chamber of the Administrative Council of Tax Appeals (Carf) upheld a decision excluding social security contributions from amounts paid to employees as Interest on Equity (JCP), through Private Equity Investment Funds (FIPs), under a talent retention programme (partnership). By seven votes to one, the panel declined to hear the appeal filed by the National Treasury, which argued that the payments constituted disguised remuneration, on the grounds that there was no sufficient divergence in case law to justify its examination, given the differences in the evidence presented in the cases being compared. In the decision upheld, the employees’ acquisition of shares was considered to have been duly proven, which was a relevant factor in excluding the payments from being classified as remuneration. The ruling highlights the importance of employees’ genuine equity participation and proper documentation of transactions under partnership programmes, particularly regarding the acquisition of equity interests for consideration, voluntary participation and the assumption of risks by participants. Companies are advised to reassess the structure and documentation of such programmes in order to mitigate the risk of tax challenges concerning the nature of the amounts distributed. Source: Carf