The Labor Reform (Law No. 13,467/17) amended article 899, paragraph 11, of the Consolidated Labor Laws (CLT) to, among other things, enable the use of a judicial surety bond or bank surety to substitute for an appeal deposit, an alternative that had already been accepted by the Labor Courts to guarantee enforcement of judgment.

However, over the past two years, starting with the enactment of the Labor Reform, the Labor Courts have resisted the use of these new instruments, especially the judicial surety bonds substituting for appeal deposits. Decisions handed down by the circuit courts across Brazil and the Superior Labor Court (TST) followed different paths, removing the supposed legal certainty brought about by the new paragraph 11 of article 899.The decisions in question basically fell into three distinct groups: one that found it impossible to use the insurance policy, another that recognized the possibility of use, but conditioned it on some requirements not provided for by law, and a third that affirmed the full possibility of using such a guarantee regardless of any requirement.

Faced with this legal uncertainty, the TST and the Superior Review Board for the Labor Judiciary issued Joint Act No. 1, which now regulates the use of surety bonds within the framework of the Labor Judiciary, both in the appeal phase and in the execution phase.

The joint act provides objective requirements for the use of the judicial surety bonds already contemplated by procedural law, such as the need for the initial insured amount to be equal to the amount of the judgment, plus 30%, subject to the limits established annually by the TST for each type of appeal.

In addition to this requirement, the regulation provides for the specificities that need to be carefully observed by the parties and insurers, such as the provision for updating the judgment per the legal indices applicable to labor debts (a sensitive issue in the labor sphere and routinely modified), the reference to the lawsuit for which the amount will be guaranteed, and the minimum term of the bond of 3 years.

Another important piece of news for those who intend to use surety bonds are the guarantees given by the insurer itself, since, after the promulgation of Law No. 13,467/17, a market of insurers was created for this purpose, some of whom have not been accredited and registered. Thus, in addition to presentation of the surety bond itself, the TST also began to require proof of registration of the policy with Susep and the insurance company's certificate of good standing with that body.

The act also allows parties, if they need to file successive appeals, to also supplement the appeal deposit by means of a surety bond, which should specifically include the remaining amount of the judgment, plus 30%.

With the creation of objective requirements for the use of judicial surety bonds, the labor community expects the courts to accept and guarantee the effectiveness of this instrument, removing once and for all the legal uncertainty of the last two years and ensuring that companies may exercise their rights of defense with the lowest possible burden.