Priscilla Folgosi
Lawyer at Marcos Martins Advogados
Dealing with labor relations in an appropriate manner is one of the biggest challenges in overcoming the crisis of companies that apply for judicial reorganization. Layoffs are inevitable and most of the time there is no possibility of immediate settlement of severance pay, creating conflicts and legal and union clashes. Employees who have not been dismissed are insecure about the possibility of bankruptcy and the loss of their rights.
The legislator emphasized in art. 47 of Law 11.101/05[1] that
The purpose of judicial reorganization is to make it possible to overcome the debtor’s economic and financial crisis, in order to maintain the source of production, the employment of workers and the interests of creditors, thus promoting the preservation of the company, its social function and the stimulation of economic activity [also providing for differentiated treatment for labor creditors]. (our comment)
Thus, in judicial reorganization, the debtor will have a maximum period of 1 (one) year, as from the approval of the plan, to pay the credits derived from labor legislation or arising from accidents at work, due up to the date of the reorganization request.
The reorganization plan may also not provide for a period of more than 30 (thirty) days for the payment of strictly wage claims due in the 3 (three) months prior to the request for judicial reorganization, whose claim does not exceed 5 (five) minimum wages per worker.
In addition, it should be noted that workers are not obliged to tolerate late payment of their salaries, and may claim indirect termination of their employment contract before the Labor Court (art. 483, d, of the CLT).
It is worth noting that, although less frequent, the judicial reorganization of micro and small companies, as well as extrajudicial reorganization, do not affect labor claims.
On the other hand, claims arising from labor claims only become liquid once the amount of the conviction has been determined by a liquidation decision, which means that labor lawsuits are not suspended when the request for reorganization is granted and will continue before the Labor Court until the amount of the conviction has been determined.
It is only after the Labor Court has determined the claim that the employee will be able to apply to the reorganization court. However, the interested party may previously request the labor judge to send a letter to the reorganization court, requesting a reservation of the amount they estimate to be due.
Although the legislation is clear, conflicts between labor judges and the judicial reorganization court over the form of payment of labor sums are common. It is not uncommon to see labor judges who, not respecting the law, proceed with the execution by seizing assets and values of the company under reorganization. However, these resources cannot be used to individually satisfy the claim that generated the seizure, because during the judicial reorganization process, executions must remain suspended.
Nonetheless, the Superior Court of Justice has curbed the impetus of labor judges, recognizing the jurisdiction of the reorganization court and determining that it should focus on attachment and payment, as determined by law.
Among the means of judicial reorganization provided for in the law, there is provision for salary reductions, compensation of working hours and reduction of working hours, always by collective agreement or convention.
If the approved judicial reorganization plan involves the judicial sale of branches or isolated production units of the debtor, the object of the sale will be free of any encumbrance and there will be no succession of the winning bidder in the debtor’s obligations, including and especially labor obligations.
The constitutionality of this provision has already been affirmed by the Superior Federal Court, and it is in line with the principles of preserving the company, the social function of the company and free enterprise, promoting an environment of legal certainty capable of attracting investment and allowing companies in difficulty to survive, preserving jobs and raising money that will go towards fulfilling the reorganization plan.
In this context, the judicial reorganization regime has been used by companies in crisis to enable the sale of assets in an orderly and secure manner, free from succession to their liabilities in order to raise the funds needed to pay their creditors and/or rebalance their working capital, so as to ensure the continuity of their business activities, albeit on a smaller scale.
Marcos Martins Advogados is prepared to conduct judicial reorganization processes, with the necessary interface with labor aspects and union relations, thus increasing the chances of success and effective recovery of the debtor.
[1] BRASIL. Law 11.101, of February 9, 2005. Regulates the judicial reorganization, extrajudicial reorganization and bankruptcy of entrepreneurs and business companies. Available at: < http://www.planalto.gov.br/ccivil_03/_ato2004-2006/2005/lei/l11101.htm>. Accessed on: 07 May 2017.
