STF preserves the possibility of reducing salaries by individual agreement without the need for union endorsement due to the Covid-19 pandemic

Mariana Saroa de Souza
Lawyer at Marcos Martins Advogados

On April 17, 2020, the Plenary of the Federal Supreme Court held an extraordinary session by videoconference to judge the Direct Action of Unconstitutionality (ADI) 6.363 filed by the Rede Sustentabilidade party, which sought the suspension of the provisions of Provisional Measure (MP) 936/2020 that authorize wage reductions and the suspension of employment contracts by individual agreement, making labor rules provided for in the CLT more flexible.

Provisional Measure 936/2020 brought several changes in the labor sphere, providing for some significant changes aimed at preserving employment, such as the possibility of individual agreements between employee and employer to reduce the employee’s working hours and salary for up to 90 days, and the temporary suspension of the employee’s employment contract for a maximum of 60 days, noting that the provision of the emergency benefit for the preservation of employment and income, consists of a monthly payment, funded by the Union, due to employees who fall into any of the situations described above, among other measures brought by the aforementioned Provisional Measure.

The STF decided to rule out the need for the union of the category to agree to the validity of the agreements, which was provided for in article 11, paragraph 4 of Provisional Measure 963/2020, reinforcing that individual agreements signed between company and employee for the temporary suspension of the employment contract or reduction of working hours and wages are valid, regardless of the agreement of the union of the category, in view of the current scenario in which we live, the pandemic.

Justice Alexandre de Moraes pointed out that, given the current situation, the provision for an individual agreement is reasonable, as it guarantees at least a minimum income for the worker, as well as preserving the employment relationship. If the need for the union to act for collective bargaining or manifestation within the legal deadline were maintained, there would be legal uncertainty and an increased risk of unemployment, concluded the Minister.

The decision in question overturned the vote and preliminary injunction of Reporting Justice Ricardo Lewandowski, who had partially granted the injunction on the grounds that it should be interpreted in accordance with the Federal Constitution, with the union having to be notified within ten days, and then being able to assess whether it is necessary to start collective bargaining, thus, for the Reporting Justice of the case, the intervention of the union would be indispensable, voting for the maintenance of paragraph 4 of article 11 of the aforementioned Provisional Measure, however, the opposite understanding prevailed.

The STF therefore ruled that individual agreements for a reduction in salary or temporary suspension of the employment contract made by the employee and employer are valid, with no need for validation or manifestation by the category’s union in order to give speed and quick access to job protection.

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