Law No. 13,467/2017 amended article 2 of the Consolidated Labor Laws (CLT), which deals with the concept of an economic group, and included paragraph 3 which expressly states that the mere identity of partners does not constitute an economic group. To constitute a group, it is necessary to demonstrate that the following requirements have been met simultaneously: (i) integrated interest; (ii) effective communion of interests; and (iii) joint action of the member companies.

There is no doubt that the legislative amendment was intended to soften the many judicial decisions that applied the concept of an economic group broadly, such as by creating theories like the "de facto economic group," according to which it was enough that absolutely different companies operated at the same site and for the same economic purpose for the existence of an economic group to be decreed. It was also common to take the position that the communion of interests in positioning for market dominance and operating systems would call for application of the economic group theory.

This intent of the legislator was made quite clear in the opinion of Senator Ricardo Ferraço, which was presented to the Committee on Economic Affairs and approved by the Federal Senate:

“I must point out that many harmful judicial decisions invoke not the law, but principles or theories, such as the so-called 'structural subordination theory,' in order to innovate in the legal system. There is a profusion of suits recognizing employment relationships and labor liabilities between employees, of company A and, employer, company B, merely because B and A belong to the same productive chain. Are there any legal provisions for such judgments? No. Does this prevent judges from creating standards over and against Congress? Again, no. Legal certainty is a constitutional principle, and what it requires, among other guarantees aimed at people in general, is stability for the past, comprehensibility in the present, and predictability for the future.


Equally worthy of note is the wording of paragraph 3 in article 2 of the Consolidated Labor Laws given by the draft bill, which provides that the mere identity of partners is not enough to characterize an economic group; rather, one must demonstrate integrated interests, effective communion of interests, and joint action of the companies. The Labor Judiciary currently takes a different position, thereby generating great legal uncertainty since a company may have to bear the labor costs of another, which is an understanding that deserves to be confronted. Once again, we emphasize: legal uncertainty discourages formal employment and discourages private sector investment (which in turn is also a catalyst for jobs)."

However, although the legislative intent is correct from a legal point of view, not least because the CLT dates back to 1943 and corporate relationships/structures are increasingly complex and intricate, it is true that, in the manner that the amendment to article 2 of the CLT was drafted, companies will not necessarily have the much sought after legal certainty.

This is because, besides the fact that the expressions "integrated interest," "effective communion of interests," and "joint action" are indeterminate legal concepts, the current paragraph 3 of article 2 of the CLT may end up being applied in some situations where it would not be applied today, such as genuine franchise agreements.

The predominant understanding of the labor courts is in the direction of excluding any type of liability between franchisor and franchisee in cases where there is a true franchise relationship, under the terms of Law No. 8,955/94, that is, when the franchise agreement is not misapplied (where there is no interference and/or direct management by the franchisor in the franchisee's business).

However, considering the current definition of economic group brought in by Law No. 13,467/17, it is possible that the labor courts may begin to interpret franchisors and franchisees as belonging to the same economic group, in that they unequivocally maintain among themselves "integrated interest,” “communion of interests,” and "joint action."

In addition to franchise agreements, it is possible to cite as other examples of this situation trademark licensing agreements or even lease agreements, depending on how they are structured.

We note that the labor courts will ultimately be charged with interpreting the generic concepts contained in the new text of the law. The logical consequence will be the most varied of legal interpretations, until standardization is implemented by the Superior Labor Court.

In other words, the legal certainty intended by lawmakers and so necessary for companies to be able to carry out their economic activities predictably will not be achieved with the approval of the Labor Reform as easily as expected.

Nonetheless, it is true that Law No. 13,467/2017 has already made great progress by explicitly removing the establishment of an economic group based solely and exclusively on identity of partners, which, in many cases, entailed a real abuse of rights.