In our week's post on labor reform, we’re going to talk about the changes made in relation to lawsuits. One of the topics that has generated more controversy and divergent opinions, including among experts and lawyers. We will explain in detail what the changes are and what are the main views on them so that you understand and can also form your own opinion.
To view related posts or watch our webinar on reform, you can click on the links below:
Webinar on the impacts of Labor Reform;
Reform Explained: Collective and Individual Agreements;
Who is in CLT now and is affected by the Labor Reform ?;
Reform Explained: Vacation Law;
Reform Explained: Unions.
The changes, which are based on better legal certainty for companies, take effect on a daily basis 11/11/2017. So it is good to prepare for them.
Jurisprudence and legality
Some practices have, in recent years, come to be accepted or even regulated by the judiciary. Being followed in companies as if they were the legislation itself. This was the case with the mass layoffs, which started to be communicated to the unions to avoid legal problems and the outsourcing that was approved in the summary 331 even without being in the labor legislation.
The reform restores the power to create laws for the Legislature. Through definitions that did not previously exist in the law and also determining that precedents (court guidelines for labor justice) must respect the laws, and cannot restrict any right provided by law or create new rights or obligations.
It is clear that it is necessary to verify how the judges will deal with this issue. But the tendency is that with this precedents and precedents, which were somewhat above the law, lose their effects. This really gives companies greater security, which at first will only need to follow current legislation and agreements.
The hiring of an independent professional, even if exclusive to the company, will not be considered a job after the retirement. It is important to note, however, that subordination, personality, continuity and onerosity continue to characterize the employment relationship.
In other words: the bond rules continue to apply and the same precautions as today must continue to be taken. What the legislation did was to give more legal certainty to companies that hire freelancers under conditions that do not characterize the bond.
Use of free justice
Today for the use of free justice, the claimant simply needs to fill out a declaration stating that he is unable to pay for the costs of the process. The reform, with the intention of decreasing the increasing number of judicial proceedings and the costs of the State with such proceedings, changed this rule.
From then on, only people with a salary of up to 40% of the Social Security benefit ceiling, which today would correspond to R $ 2,210.00, will be able to use free justice. People who prove insufficient resources to pay the costs of the process will also be able to use free justice, but the mere declaration of insufficiency will no longer be of value for this purpose.
Archiving in case of absence from the hearing
Currently, the claimant can be absent in up to three hearings before the case is closed. When this happens, it is enough for him to sign a statement that he is unable to pay the costs of the process (about 2% of the value of the case) and he no longer has any responsibility for this value, being able to open other processes without any difficulty.
With the reform, if the worker misses a hearing, he will have eight days to prove that his absence occurred for a legally justified reason. If this does not happen, the case will be closed and he will have to pay the costs of the case – even if he is using free justice – as a condition for filing a new lawsuit.
This change divides opinions. On the one hand, it benefits the company and the State, who fail to spend their time and money with some claimants who eventually do not even bother to attend the hearings. In this way, they encourage claimants to give more attention and priority to these processes.
On the other hand, if unforeseen events happen to the worker, such as losing a bus, justice should not have flexibility. He will have to bear the cost of the costs, since he will have no evidence of a justifiable reason for doing so.
Payments by the claimant even in cases of free justice
Nowadays many people leave the companies to open labor lawsuits, sometimes because of their right that has not been respected, other times just in an attempt to earn some extra money from the company, especially in this moment of crisis.
Even when the former employee has some right to complain, he often ends up including other diverse complaints in the process. “Taking advantage” that is already opening a process, to try to get as much money as possible from it, since the legislation always favors the worker. With this, many companies end up making agreements with these former employees right away to avoid the high costs of the lawsuits.
Also with the aim of ending this type of approach, which in addition to burdening companies, often still generates expenses for the State, the reform alters some conditions that make the worker think twice before opening a case:
When the worker claims, for example, that he acquired a disease because of work, medical expertise is required. Nowadays the Union bears the expenses of expertise, which in São Paulo, for example, cost around R $ 5,000.00. With the reform, it is the claimant who must bear these expenses.
Even the users of free justice must pay the expertise in the receipt of the case if they have been totally or partially successful in this or other processes, if the amount receivable is sufficient for the payment of the same. This payment cannot be demanded in advance. Whoever is a user of free justice and has no values to receive from justice, or even from other processes, will still have the expertise paid by the Union.
Payment of fees of the party that loses the lawsuit to the lawyer of the party that wins
Another point that discourages the opening of labor lawsuits is that with the reform, whoever loses the action will have to pay fees, previously established between 5% and 15% of the updated value of the case or on the value of the economic benefit obtained, to the lawyer of the part that wins.
As a result, the reform incites the claimant's greater responsibility when opening labor proceedings, since even if he is the beneficiary of free justice, he must pay within two years after the conviction.
Costs of the process and fine for bad faith
The reform states that whoever uses it in bad faith, either by altering the truth of the facts or taking any other action that may be perceived as bad faith, may be condemned to indemnify the opposing party and also to pay a fine of 1% to 10% of the cause value.
The conviction may be applied not only to the claimant, but also to the company complained of and even to witnesses in the case, if bad faith is found by either party.
Representative is the person who represents the company in labor hearings, as a kind of witness. CLT demanded that the representative be a manager or another person of the company who was aware of the facts and his failure to appear at the hearing generated negligence and confession, that is, the presumption that the facts claimed were true. With the reform, the employer's representative no longer needs to be an employee of the company, and even if he is unable to attend the hearing, the company's lawyer will still be able to present the defense and the documents, thus avoiding the punishment of default and confession.
Off-balance sheet damages
After the reform, off-balance-sheet damages are considered to be those that offend the person's moral or existential sphere, which include their honor, image, intimacy, freedom of action, self-esteem, sexuality, health, leisure and integrity.
The CLT did not establish criteria for determining the values of these causes, so that these values ended up being determined in a very subjective way by the judges of these causes, being able to present gigantic differences between one process and another and not having limitation of maximum value for indemnity.
The reform classifies off-balance sheet damages according to the severity of the offense and stipulates a maximum amount for each classification, which must be paid based on the offender's last contractual salary:
- Lightweight: up to 3 salaries
- Average: up to 5 salaries
- Serious: up to 20 salaries
- Gravissimo: up to 50 salaries
The definition of what would be a light or serious damage, however, is still subject to the judge's understanding.
This point has been one of the most criticized of the reform in relation to lawsuits and may even be changed by a provisional measure, since the amount of the damage will be stipulated based on the person's salary and not based on the damage itself . This can therefore be seen as discrimination, since two people with the same situation of loss of rights could receive immensely disproportionate amounts, if one receives a much higher salary than the other.
Voluntary Dismissal Program Proceedings
The reform stipulates that workers who adhere to the voluntary dismissal plans (PDV) will not be able to go to court for any failure in the process or the company in general, since the plan “entails full and irrevocable discharge of the rights arising from the employment relationship”, according to the reform text.
How are processes that are already running?
One of the points that has generated the most divergence of opinion among experts and lawyers is in relation to what happens with the cases that have not yet been judged – currently 2.4 million cases, 1.9 million of which are in the first instance.
Some experts and lawyers say that the new rules will apply to absolutely all lawsuits that are judged as of the effective date of the reform (11/11/2017). Others argue that since the claimants had no way of predicting the changes, it would not be fair for the new rules to apply to them as well, so that the new rules would then be applied only to cases opened from the effective date of the reform. .
It is difficult to predict for sure what the legal approach will be for these cases, which are likely to depend more on the judgment of the judge who is judging. So it is important to follow the decisions made when the reform comes into effect to have a more realistic view on the matter.
HR Consultant UK can help if you have any questions about Impacts of labor reform: lawsuits
. Our HR consultant in London can assist you if you live in London. Suppose you live further afield thats not an issue! Visit our HR Consultants Near Me page to find the best consultancy nearest to you.
See you next time!