Bloomberg Law for HR Professionals is a complete, one-stop resource, continuously updated, providing HR professionals with fast answers to a wide range of domestic and international human resources...
By Ed Taylor
Oct. 17—For the second time this year a Brazilian supreme court justice has issued an injunction suspending a labor court ruling that raised the costs for companies appealing labor court rulings.
It is common for companies in Brazil to appeal labor court rulings that go against them, and these appeals can drag on for years. Over this period, the courts correct the charges the companies are appealing for inflation. In August 2015, Brazil's superior labor court replaced the inflation index that had been used to adjust company labor court debts (the “reference rate”) with another tied to the consumer price index. This amounted to a significant increase in the cost for companies: in 2015, for example, the reference rate rose by 1.1 percent, the consumer price index by 10.70 percent.
Attorney Daniel Chiode of Mattos Engelberg Advogados told Bloomberg BNA that he has six cases in which he is challenging the use of the new indexer, including one where the extra cost for his client is over $1 million.
In October 2015 and July 2016, supreme court justice Dias Toffoli issued injunctions suspending use of the new inflation index.
Regional labor courts, however, have ignored the supreme court injunctions and have continued to use the new indexer with a resulting 40 percent increase in the costs to companies with labor court debts. Among the courts ignoring the injunctions are the labor courts of Brazil's two most important states, Sao Paulo and Rio de Janeiro, home to a majority of the multinational firms present in Brazil.
On Oct. 4, Toffoli issued yet another injunction for one of Brazil's largest food companies, Brazil Foods (BRF). This time, however, the justice said that all labor courts at all levels must use the old indexer.
“Toffoli's injunction emphasized the extent of his previous decision, stating that all judges at all levels, including labor court judges, must follow his 2015 injunction,” said BRF's attorney Mauricio Pessoa of the law firm Pessoa Advogados in an e-mail to Bloomberg BNA Oct. 11.
According to attorney Andre Villac Polinesio of the firm Peixoto & Cury Advogados, however, some labor court judges have partially circumvented Toffoli's injunction by claiming they can apply the new indexer in cases that began before Toffoli's first 2015 injunction.
To contact the reporter on this story: Ed Taylor in Rio de Janeiro at firstname.lastname@example.org
To contact the editor responsible for this story: Rick Vollmar at email@example.com
For more information on Brazilian HR law and regulation, see the Brazil primer.
Copyright © 2016 The Bureau of National Affairs, Inc. All Rights Reserved.
All Bloomberg BNA treatises are available on standing order, which ensures you will always receive the most current edition of the book or supplement of the title you have ordered from Bloomberg BNA’s book division. As soon as a new supplement or edition is published (usually annually) for a title you’ve previously purchased and requested to be placed on standing order, we’ll ship it to you to review for 30 days without any obligation. During this period, you can either (a) honor the invoice and receive a 5% discount (in addition to any other discounts you may qualify for) off the then-current price of the update, plus shipping and handling or (b) return the book(s), in which case, your invoice will be cancelled upon receipt of the book(s). Call us for a prepaid UPS label for your return. It’s as simple and easy as that. Most importantly, standing orders mean you will never have to worry about the timeliness of the information you’re relying on. And, you may discontinue standing orders at any time by contacting us at 1.800.960.1220 or by sending an email to firstname.lastname@example.org.
Put me on standing order at a 5% discount off list price of all future updates, in addition to any other discounts I may quality for. (Returnable within 30 days.)
Notify me when updates are available (No standing order will be created).
This Bloomberg BNA report is available on standing order, which ensures you will all receive the latest edition. This report is updated annually and we will send you the latest edition once it has been published. By signing up for standing order you will never have to worry about the timeliness of the information you need. And, you may discontinue standing orders at any time by contacting us at 1.800.372.1033, option 5, or by sending us an email to email@example.com.
Put me on standing order
Notify me when new releases are available (no standing order will be created)