Labor Newsletter – April

Posted: 04/19/2021

Madrona News – Newsletter Labor

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STF ruling on adjustment for inflation of labor debts published

The Brazilian Supreme Court (“STF”) issued, on 12/18/2020, a decision of partial grant of claims in direct actions of constitutionality and unconstitutionality, establishing a new applicability of the index of inflation adjustment in labor lawsuits. The decision generated several legal questions, as well as conflicting decisions in the Labor Courts. The opinion was only published on April 7, 2021, clarifying part of the questions.

Possibility of companies with judgments against them to recover amounts in the labor courts via redress

Two recent decisions opened up space for discussions involving the possibility of redress under labor law and the recovery of amounts disbursed by companies with judgments against them, as a result of actions taken by their employees.

TST en banc decision: vacation payment in double is not due if made on the first day of enjoyment

In an unprecedented decision, published on 04/08/2021, the full TST (all Justices of the Court), understood, by majority of votes (15 x 10), that the 2 or 3 day delay when settling the values related to vacations does not generate the obligation of the employer to pay double the amount and that imposing the judgment against the employer for delay considered as insignificant violates the principles of reasonableness and proportionality.

Bill that reinstates measures to reduce hours and wages may pass until the end of April

Law No. 14,020/2020 (“Law 14,020”) was one of the main governmental labor measures in 2020 to mitigate the economic impacts caused by the pandemic resulting from COVID-19. The main consequences of its enactment were the possibilities of proportional reduction in working hours and wages, suspension of employment contracts and the payment of the emergency benefit (“BEm”). After the end of the effects of Law 14,020, with the non-extension of the state of emergency in 2021, the expectation of companies in Brazil is that the Senate will pass, as soon as possible, a new measure that will allow the provisional cut of wages and hours, since the pandemic has shown no signs of lifting up.