Dismissal without just cause: STF may change rules – 05/19/2023 – Market

The STF (Federal Supreme Court) scheduled for this Friday (19) the resumption of the trial of the case that could affect relations between employers and employees in Brazil, especially the future of unfair dismissals.

The ADI (Direct Action of Unconstitutionality) 1625 has been in progress since 1997 in the Court and deals with the legality of a decree signed by then President Fernando Henrique Cardoso (PSDB) canceling Brazil’s adherence to Convention 158 of the ILO (International Labor Organization).

This convention establishes criteria for the termination of employment contracts at the initiative of the employer, that is, for dismissals without just cause.

In its 22 articles, the text provides requirements for dismissal and lists reasons that cannot be used to justify dismissal, such as union affiliation, race, color, marital status, family responsibilities, pregnancy, religion or political opinion.

The STF judgment calendar predicts that the analysis of the topic will resume this Friday in a virtual session, which will end in a week. What is under discussion in the Supreme Court is not the validity or otherwise of dismissal for just cause, but the legality of the decision taken by FHC at the time. The cancellation is called by the legislators a denunciation (the president denounced the convention).

The partial judgment score points to three possibilities of conclusion and that will depend on three ministers, who are Gilmar Mendes, Kassio Nunes and André Mendonça.

Despite the deadline extending until next Friday (26), it is possible that the justices give their opinions before that date and, with that, the result will already be known before the trial ends.

There are three main possibilities at the table.

Minister Rosa Weber and former ministers Joaquim Barbosa and Ricardo Levandowski considered that FHC’s decree would need to have passed through the National Congress to be valid and, by not doing so, the publication is unconstitutional.

If this understanding is majority, the STF will still be able to define a modulation for the scope of the decision, or all the dismissals of two years before would be subject to revision.

Modulation is the procedure by which ministers define boundaries for an understanding, such as the initial expiration date. It is through this procedure that the STF could, for example, exclude the retroactivity of the decision.

The other possibility, for which Minister Dias Toffoli and former Minister Nelson Jobim voted, is the partial admission of the ADI, according to which the decree should have been analyzed by the National Congress, but without the unconstitutionality.

In this case, there would still be doubts about the period that had elapsed since the FHC decree and the analysis of the case by Congress.

On another front, which so far has only the vote of former minister Teori Zavascki, it is understood that the future effectiveness of understanding this type of decree needs analysis by the National Congress.

That is, the cancellation of adhesion to an international treaty depends on the assessment of senators and deputies, but only for new conventions. If this thesis receives the votes of ministers who have not yet voted, the break with Convention 158 would be maintained and the dismissals continue as they are today.

Dismissal with just cause or without just cause

Dismissals for just cause are provided for in the CLT (Consolidation of Labor Laws) in the event of serious misconduct committed by the employee.

For the worker, it also results in the suspension of rights – he loses the right to a 40% fine on the FGTS (Service Time Guarantee Fund), vacation balance and 13th proportional or prior notice. The employee also does not access unemployment insurance.

Dismissal without just cause is the common one, in which the company breaks the contract and pays all severance pay, such as the Guarantee Fund fine and prior notice.

What does ILO Convention 158 say?

The text of Convention 158 was approved at the International Labor Conference held in Geneva (Switzerland) in 1982. It deals with “termination of the employment relationship by initiative of the employer” and, according to a survey by the CNI (National Confederation of Industry) in 2019, has been adopted by 35 countries.

The central point of the rule provided for in the convention deals with the justification for dismissal. In behavioral matters, the employee would need to gain time to defend himself and even change his behavior with regard to productivity and attendance, for example.

On the economic front, the justification would be a little simpler, since it would be enough to demonstrate the financial unfeasibility of keeping that employee.