STF and the Future of Labor Relations in Brazil: What to Expect?

The Direct Action of Unconstitutionality (ADI) 6142, filed by the National Confederation of Metalworkers (CNTM) with the Federal Supreme Court (STF), calls into question the constitutionality of parts of the 2017 labor reform, specifically with regard to the rule that allows collective dismissals without the need for prior union authorization.

Law 13.467/2017 allowed companies to carry out multiple or collective dismissals without the need for prior negotiation with unions, as well as allowing the assistance of union lawyers in ratifying out-of-court agreements.

However, the STF's decision, handed down in June 2022, in the judgment of Theme 638, upheld the previous decision requiring prior union participation, but applying only to mass layoffs occurring after the publication of the minutes of the judgment on the merits. It also pointed out that this participation is not to be confused with prior authorization or the signing of a collective agreement.

This understanding arose from a case involving the dismissal of 4,400 employees, highlighting the importance of union intervention to guarantee workers' rights and safety, especially in situations with a major social impact.

It is noteworthy that this decision not only brought clarity to the issue but also established a timeframe for the application of the understanding on the requirement for union participation, mitigating, in part, the legal uncertainty that has permeated the labor scenario since the 2017 Reform came into force.

With the Labor Reform generating continuous controversy in the Labor Courts, it is essential that judicial decisions are well defined, guaranteeing predictability and security in labor relations. The lack of clarity and the re-examination of cases that have already become res judicata have contributed to a significant increase in legal uncertainty, negatively impacting business planning and trust in institutions.

Labor litigation tends to grow, and companies must prepare themselves to mitigate risks in an environment of jurisdictional unpredictability. In addition, ADI 6142, which is scheduled for judgment this year, could bring important definitions for the business community, especially on issues such as the constitutionality of intermittent contracts.

At Piva Advogados, we follow these developments closely in order to offer the best guidance to our clients, ensuring that they are prepared to face the challenges brought about by legislative and judicial changes.