Approved by the National Congress in 2017, during the government of former President Michel Temer, the labor reform should return to the agenda this year, this time being debated by the ministers of the Supreme Federal Court (STF). Five years after its entry into force, the legislation that has made the labor market more flexible and less bureaucratic could undergo important changes in the Supreme Court of Justice.
Overall, 11 lawsuits filed against amendments to the Consolidation of Labor Laws (CLT) – legislation created in the early 1940s, sanctioned by Getúlio Vargas during the Estado Novo period (1937-1945) are being processed in the Supreme Court. The trials address seven issues relating to labor reform.
The number of appeals presented to the STF against the points approved in the reform has reached 40, but most of them have already been deemed unfounded by the Court. The 11 still pending judgments concern seven main issues, including the intermittent employment contract, questioned in the Direct Actions of Unconstitutionality (ADI) 5826, 6154 and 5829.
“The Judiciary is called upon to make decisions when the legislator has not acted clearly. Labor reform is a good example of this”, assesses Cássio Faeddo, partner of Faeddo Advogados.
The volume of discussions in the STF and the multiple possibilities for decisions generate an environment of legal uncertainty for employers, who hire them according to the changes approved as part of the reform.
“Legal uncertainty made us suffer for a long time. It is not yet possible to know what the contracts in force will be like, in the face of the decisions of the Supreme Court. Current employment contracts will have to be revoked or modified, which will generate administrative consequences within companies. This too is part of the cost of Brazil, the cost of administering labor legislation”, criticizes Eduardo Fayet, vice president of the Brazilian Association for Institutional and Governmental Relations (Abrig).
Intermittent work
Current Brazilian legislation permits the type of contract for sporadic work, in which there is an alternation between periods of service performance and periods of inactivity. Under this model, the employee is only paid for the time actually worked, and labor entitlements (such as holidays and 13) are paid pro rata. Last year, according to data from the Employed and Unemployed General Register (Gabbiati), over 276,000 workers were hired in this way.
The trial on the intermittent contract began in December 2020 at the STF, but ended up suspended following a request for an opinion from Minister Rosa Weber, current president of the Court. In November 2021, the case moved to the virtual plenary of the Supreme Court, but is expected to be re-examined by the collegiate in the physical plenary of the court this year.
Four ministers have already voted on the matter. The rapporteur, Edson Fachin, considered that intermittent contracts could cause legal uncertainty and do not guarantee employees’ labor rights “sufficiently” – he was accompanied by Rosa Weber. Nunes Marques and Alexandre de Moraes, in turn, disagreed with the two magistrates, understanding that the modality brings benefits to employees and employers.
“When this type of hiring was entered into the CLT, there was a lot of talk about something that would come to formalize the ‘beak’. What has been discussed is that this contract does not provide many guarantees for the worker. For this employee to earn a significant income, he needs to have several intermittent contracts with different employers,” reflects Priscila Moreira, labor lawyer at Abe Advogados.
According to Faeddo, it is possible that STF will not completely revoke temporary work, but will establish new conditions for this type of hiring. According to the attorney, there may be limitations of industries that may open intermittent job openings, such as events and commerce. Furthermore, the law could provide for a minimum number of hours worked, as well as a minimum threshold for pay and contributions.
Calculation of non-pecuniary damage and travel 12 by 36
Another point that should be analyzed by the STF concerns the calendar of compensation for moral damages to the Labor Court, envisaged by the reform. So far, only Minister Gilmar Mendes has voted on the matter, maintaining the provisions of the legislation passed in 2017, which links the amount of compensation to employee remuneration. The process was halted by a review request from Nunes Marques.
STF ministers will also have to decide on the possibility of agreeing the so-called 12 by 36 working day (12 hours of work for 36 hours of rest) through individual agreements, without the intermediation of trade unions. This format, in general, is adopted in industries such as hospitals and security, which need activities during the day and night.
The National Confederation of Healthcare Operators (CNTS) has filed a lawsuit against the STF arguing that the law violates the Constitution – which, in paragraph XIII of article 7, speaks of working hours not exceeding eight hours a day and 44 hours a week.
Already retired from the STF, the rapporteur of the case, former minister Marco Aurélio Mello, voted for the unconstitutionality of the device approved in the labor reform. Gilmar Mendes requested a viewing and halted the trial.
“Although at first the 12-hour by 36-hour working day seems contrary to what the Constitution preaches, if we look at the weekly and monthly pattern, we end up with an even shorter working day than an 8-hour daily contract. It is a path that is consolidating in some areas, in which this 12 by 36 contract is already customary”, defends Moreira, of Abe Advogados.
Cássio Faeddo believes that many employers have used individual negotiation to establish longer working hours, which do not respect the rest period. Justice monitors the work of workers who work 12 hours a day for 36 hours and who have been forced to join an hour bank to credit the overtime period worked in the 36-hour window that should be suspended.
collective agreements
Another issue to be decided in plenary by the Supreme Court concerns collective agreements and conventions. The court will have to decide whether what was collectively agreed can prevail over the legislator. Article 611-A of the CLT allows agreements to take precedence over the law.
In this case it is not a question of ADI, but of an extraordinary appeal with a precautionary appeal filed with STF. Gilmar Mendes, the rapporteur, voted in favor of respecting the agreements, even if they ultimately limit workers’ rights. An important request from Rosa Weber suspended the process.
The ministers of the Supreme Court have yet to deal with an action involving the waiver of unions from unjustified individual or collective dismissals and the ratification of labor contracts in court. The process has not yet begun: the rapporteur is Minister Edson Fachin.
The specific case that reached the STF is prior to the labor reform, which equates collective dismissal to individual dismissal and renounces negotiation. This is an episode that led to the collective dismissal of around 4,000 Embraer employees in 2009.
The Court is still dealing with an Argument of Non-compliance with a Fundamental Precept (ADPF) also relating to collective agreements. The action discusses the maintenance of the effects of these acts after the end of their effectiveness.
The appeal was filed by the National Confederation of Educational Institutes (Confenen), which opposes the previous 277 of the Superior Labor Court (TST), which allows the inclusion of collective clauses in individual employment contracts. For the institution, the court would validate collective agreements or contracts, despite this being vetoed by the reform.
There is also litigation challenging new minimum requirements for filing a lawsuit, including the need for detailed disclosure of the value of claims in labor claims. According to the experts, in practice this would mean that the worker himself would have to calculate the values of all orders – which would probably only be possible with the support of an accountant.
Court ministers also need to analyze the changes brought about by the reform in the edition of labor precedents. Until 2017, these precedents were approved by a simple majority in the TST, made up of 27 ministers (so 14 votes were needed). With the reform, two thirds of the votes are now required (18). The only one to vote was the rapporteur, Ricardo Lewandowski, who understood that the new criteria are unconstitutional.
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