In 2023, the Supreme Federal Court accepted 63% of requests to cancel employment relationships

São Paulo, 11/15/2023 – From January to August of this year, the Federal Supreme Court (STF) granted 204 (63%) of 324 requests from companies to annul Labor Court decisions that recognized employment relationships, according to a study by the Getúlio Vargas Foundation of São Paulo (FGV-SP) obtained by Broadcast.

The decisions have been challenged through complaints. In this type of appeal, there is no analysis of the evidence in the case. The justices merely assess whether the ruling, handed down in a lower court, followed the Supreme Court's jurisprudence.

Regarding the issue of core business outsourcing, or pejotization, the Supreme Court received 167 complaints from companies seeking to overturn Labor Court decisions that recognized employment relationships. Of these requests, 80 (or 48%) were granted by the justices. The cases involve legal entity (PJ) contracts that, in the opinion of labor judges, constitute fraud.

Regarding the hiring of associate lawyers, 75% of Supreme Court decisions did not recognize the existence of an employment relationship and allowed hiring as independent contractors. In cases involving independent freight transport, 84% of decisions found that the jurisdiction of the Common Courts, not the Labor Courts, lies with the courts. Regarding other independent contractors, 54% of Supreme Court decisions allowed hiring.

For research coordinator Olívia Pasqualeto, there's an important distinction between pejotização (private employment) and outsourcing that isn't being addressed in the Supreme Court's decisions. "When the Supreme Court (in 2018) authorized the possibility of outsourcing, a lot of things started to get done, like hiring a legal entity, which isn't the same as outsourcing. As a legal entity, I hire someone directly, which isn't fraud in itself, but in many cases it is. And often, what the Labor Court will do is assess whether or not there's fraud involved."
the researcher told Broadcast.

In 2018, the Supreme Court validated the outsourcing of companies' core activities and established a thesis that "outsourcing or any other form of division of labor between distinct legal entities is lawful." The FGV-SP survey concludes that, among the justices, a broad interpretation of the Supreme Court's precedents prevails. "There is a tendency to validate, with some ease, other forms of...
hiring other than an employment relationship,” Pasqualeto assesses. The survey also observed a spike in complaints against Labor Court decisions between 2018 and 2020. One possible explanation, according to the study, is the start of the labor reform – which
expanded the possibilities for outsourcing. Attorney Daniel Domingues Chiode, partner at the Chiode Minicucci | Littler law firm and Cabify's lawyer in the lawsuits pending before the Supreme Court, believes that the Supreme Court's action on the matter stems from a lack of regulation of new forms of work and the improper application of the CLT by labor courts. "The Supreme Court has recognized that the evolution of production methods does not fit within the CLT," the attorney told Broadcast.

Chiode rejects the criticism that the Supreme Court confuses pejotização (self-employment) and outsourcing. He believes there is a "harmony" between the Court's decisions. "What's binding isn't just the thesis, it's the thesis combined with the underlying reasons," he states. "When I read the decisions in full, I see that the Supreme Court addressed the issue in ways that differ from labor law."

In single-judge decisions, Supreme Court justices have expressed their discomfort with the actions of labor judges. "Ultimately, the social engineering that the Labor Court has attempted to implement is nothing more than a futile attempt to thwart the evolution of the means of production, which has been accompanied by legislative developments on this matter," stated Justice Gilmar Mendes.

In September, the Superior Labor Court ordered Uber to hire all active drivers on its platform under the CLT, in addition to paying R$1 billion in collective moral damages. According to a survey by the legal metrics platform Data Lawyer, there are 15,221 lawsuits (active and finalized) against Uber, 99, and Cabify.

Of these, 5,555 are favorable decisions for the apps, and 2,388 are favorable to the workers. The team of Supreme Court Chief Justice Luís Roberto Barroso is studying a way to unify the case law on this issue. One solution under consideration is a judgment under general repercussion (RG), which affects all cases pending in court. According to Broadcast, there is a possibility that an appeal by Uber against one of its convictions in the Labor Court will be decided by means of a RG.

Article originally published on November 14, 2023 on the Estadão website.