Retroactivity of the labor reform on current employment contracts

In a scenario marked by legislative transformations, Law No. 13,467/2017, better known as the labor reform, has emerged as a watershed, catalyzing changes in Brazilian labor relations. It is important to explore the challenges related to the judgment of the Superior Labor Court (TST) regarding the retroactivity of this reform, analyzing the elements that govern the new labor landscape in contracts signed before the new legislation came into force.

The Superior Labor Court will rule on Incident of Repetitive Appeal No. 23, which discusses whether the employer must comply with the obligations imposed by the labor reform in contracts with measures altered or suppressed by the law that came into force after the employment contract began.

The labor reform introduced strategic changes, encouraging collective bargaining and promoting greater flexibility in relations between employers and employees. The possibility of retroactively applying these changes to old contracts opens up space for more agile and adaptive management of labor relations, in line with market needs.

In addition, not retroacting would create a division in the group of employees that would certainly violate the principle of equality, generating legal uncertainty and more risks to business operations.

The controversy comes down to whether the rights acquired and paid to workers still remain after the implementation of the new law in relation to ongoing contracts or whether, with the entry into force of this law, these rights would cease.

The main changes brought about by Law No. 13,467/2017 deal with the strengthening of collective bargaining, allowing agreements to prevail over legislation in certain situations, providing more autonomy to the parties involved. It also changed the rules on working hours, offering new possibilities such as intermittent working hours, allowing employers and employees to adjust their agreements according to the specific demands of each sector. It also changed the issue of commuting hours, so that travel time is no longer considered time at the employer’s disposal.

In this sense, the discussion about the retroactivity of the labor reform could have repercussions on all these changes, for example:

  • In the employees’ own commuting time;
  • Any and all changes made to the intra-workday break;
  • The right to incorporate bonuses for employees in a certain position; and
  • The 15-minute rest period for women before working overtime.

Clearly, the rights both suppressed and granted by the reform to employees and employers are subjectively applied in the current scenario without a pacified understanding by the TST, since employers have generated a great deal of legal uncertainty when applying the terms of the reform to employees who were hired and had acquired rights under the previous law, in which these employees may eventually be able to claim in court for more beneficial situations previously granted to them under the aegis of the reform.

Thus, the discussion about the retroactivity of the labor reform not only faces challenges, but also offers strategic opportunities for companies. Gradual adaptation to these changes can be seen as an investment in improving labor relations, promoting more efficient and competitive work environments.

The development of judicial precedents around retroactivity, following the TST judgment, will be crucial for companies seeking to operate in accordance with the new rules. The joint analysis of legislation and market practices will provide valuable insights for court decisions that will directly impact the conduct of business in the coming years.

As such, the court’s decision can directly influence companies’ practices and strategies, impacting costs, legal compliance, employee relations and, ultimately, the ability to thrive in a constantly evolving business environment.

For a better understanding, let’s look at a hypothetical situation. A company that, before the labor reform, practiced acts provided for by the old legislation, offering employees specific conditions during the contract, such as, for example, the granting of chartered transportation for the employee to go to work and, with the change in legislation, the company would need to ensure that the changes did not harm the acquired rights of employees with a contract signed before the new law came into force, since commuting time was understood to be at the company’s disposal.

However, this provision was removed in the reform, so the employer must consider maintaining chartered transportation or making adjustments to comply with the new labor guidelines, as well as employees who received performance bonuses and had this amount incorporated into their salary, among other situations.

This strategic approach allows organizations to adapt effectively and thrive in a work environment that promotes agility and sustainability, depending on the decisions made.

Therefore, the search for a balance between the principle of isonomy and respect for workers’ rights will be essential for the judgment of the Superior Labour Court, so that by facing these challenges strategically, organizations can prosper and minimize labour claims, as well as preventively aligning the obligations provided for in previous legislation, and adapting to current legislation without major financial, productive and sustainable impacts.

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