The Federal Supreme Court (STF) began on February 19 the virtual judgmnet of Extraordinary Appeal 999.435, which discusses topic of general repercussion 638 regarding the need for prior collective bargaining for mass layoffs of workers.

The judgment relates to the extraordinary appeal filed by Embraer, in a collective dispute, regarding the validity of the mass layoffs carried out by the company in 2009, as a consequence of the global economic crisis experienced at the time.

The Labor Courts held that collective layoffs are not possible without the participation of the labor union representing the workers. Case law imposed collective bargaining as a prerequisite for the validity of mass layoff processes.

The judgment was not adjourned, but the opinion of the reporting judge, Justice Marco Aurélio, was released. In a direction contrary to the understanding of the Labor Courts, the Justice proposes as a solution to the dispute no need for collective bargaining for the mass layoff of workers.

The Justice argues that the Federal Constitution is exhaustive in setting out the list of rights that must necessarily be addressed via collective bargaining. In his opinion, since there is no constitutional or legal prohibition on the matter and in accordance with the legal principles that govern labor relations and the dignity itself of the human person, it is not necessary to consider the inclusion of obstacles blocking the employer's unilateral power.

The issue has been discussed for more than 20 years with the STF, with a Direct Action for Unconstitutionality (ADI No. 1625) regaring Decree No. 2,100/96, which declared the end of the validity of Convention 158 of the International Labour Organization (ILO) in Brazilian territory.[1] The judgment of this ADI, scheduled for the first half of the year, was excluded from the calendar by the Chief Judge of the STF, Justice Luiz Fux, on the same day the judgment of the Embraer case began.

This is a highly relevant topic, especially in the current scenario of economic crisis, with various companies announcing plant closures and even a total shutdown of activities.

There is still a long way to go before the judgment is completed, certainly with ample debates among the Justices of the Court, who should address the issues together to settle the position. In any case, the Justice's proposed opinion further exalts the idea of loosening of labor law rules as a solution for resumption of economic development, in addition to fostering the role of pacification of social conflicts by the Judiciary, issues that have also been the subject of concern on the part of the Legislative Branch, as were the changes proposed by the Labor Reform.

[1] ILO Convention No. 158, among other measures, prohibits arbitrary or unjust dismissal.