Supreme Court: Gilmar Mendes denies employment relationship to app driver

Justice Gilmar Mendes of the Federal Supreme Court (STF) ruled that a Cabify app driver, which has ceased operations in Brazil, was denied employment. He is the third justice on the court to find that there is no employment relationship in this situation. Justices Alexandre de Moraes and Luiz Fux have already ruled in favor of Cabify.

These Supreme Court decisions overturning Labor Court rulings recognizing employment relationships have sparked dissatisfaction among lawyers, judges, prosecutors, academics, and union members across the country. On Monday, a total of 64 organizations signed a public letter to the justices, defending the constitutional jurisdiction of the Labor Court.

Gilmar Mendes overturned a ruling by the Regional Labor Court of Minas Gerais (TRT-MG). The ruling recognized the employment relationship, which entitled drivers to benefits such as FGTS (Unemployment Severance Fund), 13th-month salary, and a third of their vacation pay. Following the ruling by the TRT, Cabify filed a complaint with the Supreme Federal Court (STF), claiming the ruling violates the Court's binding case law, which recognizes other types of work not governed by the CLT.

In the decision, Minister Gilmar Mendes points out that, in the judgment on the legality of outsourcing (ADPF 324), he had already pointed out that the highest body of the Specialized Labor Court — the Superior Labor Court — “has placed serious obstacles to political options endorsed by the Executive and Legislative branches.”

And that “at the end of the day, the social engineering that the Labor Court has attempted to carry out is nothing more than a futile attempt to frustrate the evolution of the means of production, which have been accompanied by legislative developments in this area,” he highlights.

The minister also highlighted in his decision that, in the global context, he observes an emphasis on the flexibilization of labor standards. "Indeed, if the Federal Constitution does not impose a specific production model, it makes no sense to maintain the constraints of a verticalized, Fordist model, contrary to a global movement toward decentralization." (Reclause No. 63,414)

Finally, he highlighted that the STF has already ruled that there is no irregularity in the hiring of professionals through legal entities or in an autonomous form, the so-called “pejotização” to provide services inherent to the main activity of the contractor, thus concluding that “outsourcing” through “pejotização” is legal.

Justice Luiz Fux has already expressed similar views (Reclauses 61267 and 59404). Justice Alexandre de Moraes has also issued rulings denying the link (Reclauses 59795 and 60347). All cases involve Cabify.

According to Daniel Chiode, a lawyer advising Cabify in the proceedings, from Chiode Minicucci Advogados, the Supreme Court has been taking a leading role in defining the regulatory parameters for app-based work, based on decisions by the Court itself, which already recognized this modality as autonomous and not regulated by the CLT.

He further states that existing working groups to develop proposals to regulate the issue, including the federal government, were unable to reach consensus. "This is precisely why the Supreme Court, within its jurisdiction, has been establishing guidelines for professional activities using apps. The series of STF decisions reveals that the consolidation of labor laws is not suitable for regulating these activities," he says.

For José Eymard Loguercio, a lawyer who advises app drivers and LBS Advogados, this issue shouldn't be judged by complaint. He also points out that the Supreme Federal Court (STF) didn't analyze the matter in terms of general repercussions, which would make it binding. He also states that these cases don't address outsourcing, nor the specific situation of independent drivers—who have their own legislation.

Finally, Loguercio highlights that the then Attorney General of the Republic, Augusto Aras, even asked the STF to standardize the jurisprudence on complaints when the Labor Court identifies fraud in the characterization of the employment relationship (Rcl 60620).

According to Aras, the use of complaints in these cases is unacceptable because the arguments established in the outsourcing ruling do not address the same situation. He also notes that between 2019 and June 2023, more than 780,000 cases involving requests for recognition of employment relationships reached specialized courts, demonstrating the social impact of the issue.

In addition to the complaints, Uber has already filed an appeal to be considered by the Supreme Court. It has been submitted to Justice Edson Fachin, but a trial date has not yet been set (RE 1446336).

The apps have prevailed in these lawsuits. A survey conducted through the legal metrics platform Data Lawyer shows that there are 15,221 (finalized) lawsuits against Uber, 99, and Cabify, and 5,555 favorable decisions for the apps (there may be more than one per lawsuit). For workers, there are 2,388 victories.

At the Superior Labor Court (TST), the 2nd, 3rd, 6th, and 8th Panels decide to recognize the employment relationship, while the 1st, 4th, and 5th Panels deny the requests. In Subsection I Specialized in Individual Disputes, which consolidates the TST's understanding, two cases against Uber are under analysis (E-RR-1000123-89.2017.5.02.0038 and E-RR-100353-02.2017.5.01.0066).

Article originally published on November 14, 2023 on the Valor Econômico website.