Supreme Federal Court (STF) overturns Lewandowski’s decision on the need to have unions’ ratification on individual agreements on reduction of working hours

Complementing the analysis of the theme involving the emergency measures implemented by Provisional Measure No. 936/2020, as previously reported, Minister Ricardo Lewandowski had issued an injunction in the sense that individual agreements signed under PM 936/2020 (to reduce working hours and wages) would have no effect until there was active union participation.

However, last Friday (April 17, 2020), during the analysis of the merit of the Direct Unconstitutionality Action promoted against the mentioned provisional measure, the Ministers of the Supreme Federal Court (STF), by majority of votes, considered constitutional the provisions set forth by the rules proposed by the Federal Government that help to maintain jobs and economic activity.

Therefore, the terms of the provisional measure remain in force and without any changes, with a view to preserving employment, continuing business activities and to minimize the social impact resulting from the state of public calamity, being revoked the decision issued by  Minister Lewandowski.

According to the prevailing understanding, conditioning agreements already concluded to the subsequent scrutiny of the unions undermines legal security and puts constitutional values ​​such as social protection of employment and proportionality at risk, in addition to reducing the effectiveness of the provisional measure.

We highlight below the main points of this decision:

  • Individual agreements, based on PM 936/2020, are valid and do not need ratification by the Unions (for reduction percentages of 25%, 50% or 70% only);
  • The obligation to communicate to the Unions remains, observed the 10-day term, but the individual agreements do not depend on the union’s approval to be valid (under the penalty of fines to be imposed by the inspection authorities); and
  • Employee and employer can enter into an adjustment by individual agreement to reduce working hours/wages and suspend the employment contract, observing the rules of PM 936/2020, regarding salary ranges, without the need for union representation.

Therefore, we understand that the decision provides legal certainty for individual agreements already formalized and also for those that are yet to be formalized.

Our Labor Team remains at your disposal to clarify any doubts.