Monique Vieira Lessa
Lawyer at Marcos Martins Advogados
In a recent decision involving Embraer, the Supreme Court ruled by a majority of votes that prior collective bargaining is mandatory for mass layoffs of workers. As the issue has general repercussions, the decision will have to be applied by the other labor courts that hear cases involving this issue.
This means that, from now on, companies that need to make a collective dismissal must first seek out the union of the workers’ professional category, in order to find measures to mitigate the social effects caused by the collective dismissal.
This dialogue does not mean, however, that the workers’ unions will have to authorize collective dismissals, but they should thoughtfully engage in a negotiation that benefits both sides (company and workers) and reduces the impact on society.
Measures such as opening a voluntary redundancy program (PDV) or reducing working hours and salaries are alternative solutions that could be brought up in this negotiation, as well as others that could reduce the impact of the layoffs, if they can’t be avoided.
In other words, the STF introduced the requirement for prior negotiation before mass layoffs take place, so that the parties have the opportunity to develop alternatives that are less drastic and damaging than laying off a large number of employees at the same time. The measure gives companies more security, as it shows that there has been a search for dialog with the union of the category involved.
Mass dismissal, also known as collective dismissal, is when a company dismisses a group of employees at the same time and for a single reason, which is usually related to an economic or technological issue or a change in the company’s structure.
Financial crises, production line closures or even company mergers are used as justifications for a collective dismissal, and there are no objective criteria as to the number or percentage of workers dismissed to presuppose the occurrence of a mass dismissal.
Before the labor reform promoted by the Temer government, mass layoffs were only valid if there had been prior collective bargaining with the union of the professional category, by means of a collective bargaining agreement. With the advent of the reform, this prior authorization from the union was dispensed with and companies could, according to the law, carry out mass layoffs without the intervention of the union.
With the current macroeconomic scenario, aggravated as a result of the Covid-19 pandemic, many companies have used this alternative as a means of reducing the negative impact on their turnover and avoiding the closure of their activities.
As a practical consequence, many unions have started to sue the Labor Courts, claiming that the new rule brought in by the reform is unconstitutional. As a result, the discussion in the Labor Courts about the need for collective bargaining in cases of mass dismissal of workers took the debate to the STF, which ruled that: “prior union intervention is an essential procedural requirement for the mass dismissal of workers, which is not to be confused with prior authorization by the union entity or the signing of a collective agreement“(RE nº 999.435).
Thus, observing this new understanding, as well as the difficulty that many companies encounter in dealing with unions, specialized legal assistance becomes essential to help companies, not only with negotiation, but with guidance that seeks to minimize the impacts of this process.
