It is expected that, in the first half of 2023, the Brazilian Supreme Court judge an action concerning the International Labor Organization (ILO). There has been a great deal of controversy and misconception in relation to such a case, with the understanding that it will be the end of discharge without just cause.
However, this interpretation is misconstrued, since discharge without just cause is provided for in the Federal Constitution. What will be judged is whether the decision of the former president Fernando Henrique Cardoso is constitutional or not, regarding the non-application of ILO Convention number 158.
Signed by 35 countries, this Convention establishes that employers are obliged to justify the reasons for labour contract terminations.
The misjudgement about ILO Convention number 158 lies in the fact that justification is mandatory in the act of termination, causing the false impression that any termination would be for a just reason.
This ILO rule does not aim to curb the application of termination without cause, but to oblige the employer to justify the reason for termination, for example, reduction of staff, low productivity, end of activities, among others.
Therefore, at first there would be no major change in the legislation, but it is understood that it is a limiting factor of the employer’s directive power, considering that all layoffs must be justified.
The action relating to ILO Convention 158 has been awaiting trial for more than 25 years. Due to the alteration of the internal rules of the Brazilian Supreme Court judgment may be passed in the first half of the year.
In this sense, Supreme Court Justices will merely decide whether ILO Convention 158 should have its application authorized by Congress. There will be no trial involving the Potestive clause of the companies which is guaranteed constitutionally.
In the event that they decide for unconstitutionality, we will be faced with judicial positivism, sealed by the Federal Constitution, generating new disputes in the labour sphere.
For further information, contact Juliana Cerullo, Leading Attorney in Labour Law at Ronaldo Martins & Advogados: juliana.cerullo@ronaldomartins.adv.br.