Superior Labor Court Pivots, Authorizing Salary Deductions In Cases Of Negative Compensatory Time

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In March, the Second Chamber of the Brazilian Superior Labor Court has changed its position on the matter following a trial, upholding the validity of a collective labor agreement...
Brazil Employment and HR
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In March, the Second Chamber of the Brazilian Superior Labor Court has changed its position on the matter following a trial, upholding the validity of a collective labor agreement clause authorizing employers to make deductions from employees' salaries in cases of negative compensatory time, where more compensatory time has been used than an employee has accrued.


Historically, the Superior Labor Court would strike down clauses in collective labor agreements that authorized deductions from employees' salaries in cases of negative compensatory time.

The decisions were usually made on the grounds that, given the absence of explicit legal authorization and the impossibility of transferring economic risk to the worker, it was the employer's responsibility to set working hours for its employees.


In June 2022, the Supreme Federal Court, during the judgment of ARE No. 1.121.633, under the regime of General Repercussion (Theme 1046), ruled on the matter, stating: "collective agreements and conventions that, considering the negotiated sectoral adequacy, establish limitations or waivers of labor rights are constitutional, regardless of the specified explicit compensation advantages, provided that absolutely non-disposable rights are respected," thereby granting more legal certainty to collective bargaining.

Based on this decision, the Second Chamber of the Superior Labor Court upheld the decision of the Labor Court of Appeals, filed in the records of a public civil action, through which the Labor Public Prosecutor's Office sought to have a clause struck from a collective labor agreement, which authorized the employer to make deductions from the salaries of its employees in cases of negative compensatory time.

In its decision, the Second Chamber highlighted that the case did not involve non-negotiable rights, and that the establishment of compensatory time—with the possibility of deducting unjustifiably unworked time—is compatible with the Federal Constitution. Therefore, in light of the binding opinion of the Supreme Federal Court, it held that the validity of the collective bargaining must be recognized.


The decision of the Superior Labor Court reflects the trend within the Labor Justice to respect Supreme Federal Court's position regarding the primacy of collective labor negotiations over legislation, as long as the constitutional limits and restrictions imposed by Article 611-B of the Brazilian Labor Code are respected.

That is indeed good news, as it reinforces the security of collective bargaining in the labor sphere, which can bring a certain level of flexibility and adaptability for both employers and employees.

However, it remains essential to seek qualified legal guidance for the proper analysis and interpretation of terms when negotiating with labor unions.

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Founded in 2001, Tauil & Chequer Advogados is a full service law firm with approximately 90 lawyers and offices in Rio de Janeiro, São Paulo and Vitória. T&C represents local and international businesses on their domestic and cross-border activities and offers clients the full range of legal services including: corporate and M&A; debt and equity capital markets; banking and finance; employment and benefits; environmental; intellectual property; litigation and dispute resolution; restructuring, bankruptcy and insolvency; tax; and real estate. The firm has a particularly strong and longstanding presence in the energy, oil and gas and infrastructure industries as well as with pension and investment funds. In December 2009, T&C entered into an agreement to operate in association with Mayer Brown LLP and become "Tauil & Chequer Advogados in association with Mayer Brown LLP."

© Copyright 2024. Tauil & Chequer Advogados, a Brazilian law partnership with which Mayer Brown is associated. All rights reserved.

This article provides information and comments on legal issues and developments of interest. The foregoing is not a comprehensive treatment of the subject matter covered and is not intended to provide legal advice. Readers should seek specific legal advice before taking any action with respect to the matters discussed herein.

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