Lately, we have been witnessing a new trend in the Brazilian Labor Courts when making decisions on disputes arising out of relationships involving Brazilian and international features, the most interesting ones being decisions that lift the consular and foreign institution immunities.
The first is about a labor claim filed against the Japanese Consulate General by a former employee, who claimed severance pay. The Superior Federal Court ruled that the Brazilian Labor Court is competent to hear this kind of conflict. The consulate cannot disrespect an employee’s social rights. This decision changed the common understanding that the consular immunity was absolute.
The second refers to a foreign institution, the IADB (the Interamerican Development Bank). In this case, the Superior Labor Court adjudged likewise, the Brazilian Labor Court is competent to hear labor conflicts between a Brazilian employee and a foreign institution.
Another interesting decision regarding the Brazilian jurisdiction was published and refers to a labor claim brought by a former Argentine employee of Ibéria Líneas Aéreas de Espana against this company in Brazil, based on the fact that said employee had rendered services in Brazil.
In this case, the employee was hired in Buenos Aires, in 1961. In 1986 he was transferred to Brazil to work as a Manager. However, he was registered only in 1987. He worked in Rio de Janeiro for six years and returned to Argentina when his employment agreement was terminated. He claimed salary differences and the registration for the period that he worked in Brazil.
At the lower level court, the suit was dismissed without judgment on the merits. The judge understood that it was a matter within the Argentinean Labor Court’s jurisdiction because his last working location was Buenos Aires. The Regional Labor Court (higher level court) upheld the first decision, but later, the Superior Labor Court adjudged that the Brazilian Labor Court was competent because services had been rendered in Brazil during a certain period of time. According to this Court, the competence is determined by the location where employees work, even in the case of individuals hired abroad.
The last decision we would like to present here refers to an employee hired by Banco do Brasil in 1941. He worked in Montevideo (Uruguay) from 1974 through 1977, in the Panama City from 1979 through 1985, and in Rome from 1990 though 1991. During these three periods, Banco do Brasil collected the Mandatory Unemployment Benefit Fund contributions ("FGTS") on a hypothetical salary that the employee would have been receiving had he been working in Brazil.
The Superior Labor Court understood that if the employee was assigned to a position abroad and was paid a salary in a foreign currency, all the labor allowances, including the FGTS, should be computed taking into consideration his overall remuneration.
These decisions are interesting because they show the changes in understanding Brazilian Labor Courts are undergoing.
The content of this article does not constitute legal advice and should not be relied on in that way. Specific advice should be sought about your specific circumstances.