Toffoli orders suspension of labor lawsuits in the collection phase

The measure is valid until the trial that discusses the inclusion, in the execution phase, of a company that allegedly belongs to the same economic group as the convicted employer.

Minister Dias Toffoli, of the Federal Supreme Court (STF), suspended all proceedings that discuss, in the execution (collection) phase, the inclusion of a company that allegedly belongs to the same economic group as the convicted employer.

In general, these are cases in which the main company was convicted and no money or assets were found to satisfy the debt. Currently, 49% of cases heard by the Labor Court are not finalized due to non-payment. The congestion rate is included in the Justice in Numbers 2021 report, published by the National Council of Justice (CNJ).

According to Toffoli's decision, the issue has been discussed in the ordinary instances of the Labor Court for more than two decades, "still causing significant legal uncertainty today." He adds: "Furthermore, it cannot be forgotten that the resolution of the controversy by this Supreme Court will have direct repercussions on countless labor claims, leading to significant social and economic consequences."

This scenario in countless cases of labor execution, according to Toffoli's decision, “has implied the constriction of the assets (often in a substantial manner) of a company outside the knowledge process that, despite supposedly being part of an economic group, has not had the opportunity to at least express itself, in advance, about the specific and precise requirements that indicate that it is part of (or not) a labor economic group (which is only provided after the court's guarantee, in embargoes to the execution)”.

The suspension affects more than 60,000 lawsuits nationwide that are in the collection phase and contain the term "economic group," according to a 2022 survey conducted by the legal metrics platform Data Lawyer. The lawsuits total R$8 billion. Currently, a total of 900,000 lawsuits are in the execution phase, involving R$78 billion.

In September, the Supreme Federal Court's plenary session, by majority, recognized the general repercussions of Topic No. 1232, in the case involving Rodovias das Colinas. However, it did not order the suspension of all proceedings.

According to Daniel Dias, a partner at Machado Meyer, who advises Rodovias das Colinas, "the decision, despite not analyzing the merits, demonstrates our commitment to seeking legal certainty for companies that are prevented from fully discussing their responsibility for paying labor debts." He believes that even with the widespread repercussions, many labor judges have been deciding to include companies in the enforcement phase, even requesting the seizure and auction of assets before a final decision is made on the matter.

Attorney Daniel Chiode, of Chiiode Minicucci Advogados, also states that the Labor Court has needed to take a definitive stance for decades. "There are countless different decisions on the subject, creating chaotic situations during the enforcement phase. Obviously, labor claims must be satisfied, but this cannot be done by violating constitutional guarantees," he says.

For attorney Letícia Ribeiro, a partner at Trench Rossi Watanabe, the issue of including a company allegedly from the same economic group in the labor enforcement phase, without them having participated in the information process, "is a long-standing one and needs to be addressed with great seriousness and speed." As the issue has been recognized as having widespread repercussions, she affirms that Justice Toffoli acted correctly in ordering the suspension of the proceedings.

"This is not only an appropriate measure, but a necessary one, especially given the abuse we've seen by the Labor Courts, including the seizure of assets of companies that didn't have the opportunity to defend themselves during the discovery phase. Often, there's a debate about the very existence of an economic group. And holding a company unrelated to the process responsible during the execution phase creates extreme uncertainty for everyone," he says.

According to attorney Alberto Nemer, partner at Da Luz, Rizk & Nemer Advogados Associados, Toffoli's decision brings hope for legal certainty in the Labor Courts. "Contrary to current legislation, the Labor Courts have been indiscriminately accepting the inclusion of companies claiming to belong to an economic group in the execution phase, where there is no further opportunity to discuss what was discussed in the information stage. In other words, they were only used to foot the bill for third parties with whom they had no relationship," he says.

Even before the general repercussions were declared, the then-Vice President of the Superior Labor Court (TST), Justice Dora Maria da Costa, had decided to suspend all ongoing proceedings dealing with the issue in the Labor Court until the full court ruled on the matter. However, the following day, she reversed her decision and decided to suspend only the proceedings before the TST.

Since 2003, with the repeal of Superior Labor Court (TST) Precedent No. 205, labor judges have generally accepted the inclusion of companies that would be members of the same economic group in the enforcement phase. The debate, however, resurfaced with a September 2021 decision by Supreme Court Justice Gilmar Mendes. He overturned a TST ruling that sought to hold a company included in the enforcement phase liable for the payment of labor benefits.

Mendes held that a company should only be liable for a debt if it was listed as a party from the beginning of the proceedings – as established in the ruling. The minister's position is based on paragraph 5 of article 513 of the Code of Civil Procedure (CPC).

Attorney Juliana Bracks, however, considers that, while it may be difficult for companies to defend themselves during the enforcement phase, for workers, "it will be practically impossible to enforce" if Gilmar Mendes's understanding prevails. "Including all the companies that could potentially be part of an economic group from the beginning of the process is very difficult. Especially because some companies create new ones later to avoid enforcement," she states.

Article originally published in the online version of the newspaper Valor Econômico on May 26, 2023.