Publications

Category: Labor and employment

Law No. 13,699/2018, published on August 2, amended article 2 of Law No. 10,257/2001 (the City Statute) so as to refer to conditions applicable to domestic workers:

“Article 2. Urban policy aims to order the full development of the social functions of city and urban property, through the following general guidelines: XIX - guarantee of decent conditions of accessibility, use, and comfort in the internal premises of urban buildings, including those intended for habitation and service of domestic workers, observing minimum requirements for dimensions, ventilation, lighting, ergonomics, privacy, and quality of the materials used."

In a quick analysis, it is possible to interpret the new provision as establishing obligations for the domestic employers. However, since the City Statute provides regulations implementing articles 182 and 183 of the Federal Constitution, which deal with urban development policy, its articles are directed to the municipal public power. They establish general guidelines that must be followed by municipalities in order to attend to the social function of urban properties and to seek the well-being of their inhabitants.

It is, therefore, a programmatic law, which defines ideals to be observed by the public power in the development of its urban master plans. For this reason, it does not contain in its framework provisions for inspections or penalties.

In the statement of reasoning by Senator Cristovam Buarque, author of the bill that resulted in the amendment of the law, the reference to domestic servants was aimed at alerting the legislative houses of municipalities for them to, when drafting urban policy development plans, take into account the conditions of workplaces and housing for domestic workers:

"Although the Federal Government, because of the autonomy of federal entities, cannot penetrate the legislative territory of municipalities, which are responsible for the promulgation of urban land use and occupation laws, federal legislation should guide the establishment of such rules at the local level, observing, as is the case, the guarantee of human rights and dignity and labor rights, as this is a matter exclusivity incumbent on the Federal Government. This is what the present proposition. Without changing the essence of the simplification directive of so-called "building codes", the wording proposed here adds to the City Statute the provision that municipalities, upon legislating on this matter, establish adequate standards of accessibility and comfort for housing, including that of domestic workers. It is intended, therefore, within the scarce limits of the federal jurisdiction in the field of urban norms, to ensure due respect for the dignity of persons in the building of domestic spaces."

Along these lines, unlike what mere reading of the new legal provision might suggest, domestic employers' obligations were not established.

Incidentally, it is necessary to consider what counter-interpretation could cause serious difficulties in the very viability of domestic work. This is because the new item XIX of article 2 of the City Statute presents comprehensive and undefined mentions of accessibility, comfort, dimensions, ventilation, lighting, ergonomics, and privacy, which would make it natural to adopt as a parameter the rules presented by the Ministry of Labor on the topic.

As a consequence, there would be great difficulty in meeting the ergonomic requirements and physical conditions of workplaces for domestic servants, since the regulations of the Ministry of Labor and Employment^[1] are quite rigid and often more demanding than the conditions that domestic employers themselves have in their homes.

It is concluded that the new provision included in the City Statute does not impose obligations on domestic employers, but only tries to make municipal urban development policies take into account the working conditions of domestic workers.

In any case, it is essential that, within a reasonable standard and taking into account the possibilities of their residences, employers are careful to provide good conditions for dimensions, ventilation, lighting, ergonomics, privacy, and material quality for domestic workers.

[1] According to Regulatory Rule 1, compliance with the regulations of the Ministry of Labor and Employment is mandatory only for private and public companies and public bodies of the direct and indirect public administration, as well as the bodies of the Legislative and Judiciary Branches that have employees governed by the Consolidated Labor Laws - CLT. They therefore do not apply to domestic workers.

Category: Labor and employment

Every day, about 60 billion messages are sent on WhatsApp, an application that reached the mark of 1.5 billion active users per month this year.^[1] In Brazil, the instant messenger reached 120 million users about a year ago, equivalent to more than half of the country's inhabitants. Parallel to this rapid spreading in recent years, there has been a significant increase in dismissals due to the improper use of software in Brazil due to the tenuous line between their use in private and professional life.

While using WhatsApp to communicate regarding work issues, many employees are also using the tool to complain or make jokes about the company they work for, their bosses, or colleagues. What most of them do not know is that, although it is a private instrument, employees can be warned, suspended, or even have their employment terminated for just cause if it is found that the content sent is offensive to the employer.

Employees should be cautious, therefore, when addressing colleagues or a hierarchical superior in conversations via the application, because if the comments about the employer go beyond the limits of the freedom of expression, the conduct might be classified within in the scenario provided for in letter k, of article 482, of the Consolidated Labor Laws (CLT), which provides as a just cause for termination of the employment contract by the employer an "act harmful to the honor or good reputation or physical offenses committed against the employer and hierarchical superiors, except in the event of legitimate defense of one’s self or others."

For this reason, more and more WhatsApp records are being used in labor lawsuits, while the Labor Courts have received as sufficient evidence the messages recorded in the application itself.

Offenses, jokes, biting complaints, or other conduct that may tarnish the good name of the employer are subject to termination for just cause. The novelty is the medium in which such conduct occurs (WhatsApp), and for this reason it is important to offer in-house training on behavior in the application.

In a recent decision, the Second Panel of the Court of Labor Appeals of the 23rd Circuit dismissed an ordinary appeal filed by the claimant and upheld a trial decision that recognized the just cause of his dismissal since offenses to the company where he worked were found in a WhatsApp group.

As reported in the record of case No. 0000272-85.2017.5.23.0081, in response to a posting from a co-worker on a pizza buffet offered by the company, the employee sent the following message: "This buffet sucks. only 2 hours ... Because of the delay it’s like a cafeteria. you can’t get more than two piece hahaha” [sic].

The judge drafting the opinion on the ordinary appeal, Appellate Judge Roberto Benatar, upheld the just cause applied to the employee on the grounds that "the worker’s behavior consisting of publishing a derogatory comment on the quality of the service of the defendant in a group created in a messaging application reveals clear offense to the honor and the good reputation of the employer, thus yielding an opportunity for termination due to just cause."

In another case, decided by the Court of Labor Appeals of the 11th Circuit, the claimant, in the capacity of appellant, sought to overturn a trial decision that rejected a plea to reverse just cause on the grounds that the injuries directed at the employer were not rendered in the work environment or even while working.

In the meantime, the adjudicatory panel accepted the trial decision’s reasoning on the merits, according to which the decision made by the employer does not represent censorship of the content of the conversations held within a group via the mobile phone. This is because offense against superiors in a social network exceeds the limits of employees’ freedom of expression and consists of "a fact that permanently impedes the continuity of the employment agreement due to fiduciary breach", considering that "the employment relationship has as one of its pillars trust between the parties, which unfolds in the duties of good faith and loyalty, which must be observed even outside the work day and the place of provision of services":

“CLAIMANT'S APPEAL. JUST CAUSE. ACT HARMFUL TO THE HONOR AND GOOD REPUTATION OF THE EMPLOYER CARRIED OUT BY THE EMPLOYEE. DEPRECATORY COMMENTS ABOUT HIERARCHICAL SUPERIOR PUBLISHED IN SOCIAL NETWORK (WHATSAPP). APPLICATION OF ARTICLE 482, ITEM K, OF THE CLT. The employment relationship has as one of its pillars the trust between the parties, which unfolds in the form of the duties of good faith and loyalty, which must be observed even outside the work day and the place of provision of services. In this case, by publishing derogatory comments about hierarchical superiors on a social network (“WhatsApp”), the claimant carried out an act detrimental to its honor and good reputation, especially when considering the repercussion and scope that information can have on account of the means by which it was disclosed, which authorizes the application of just cause by the employer, with a basis on article 482, k, of the CLT. Appeal heard and granted.” (Case No. 0001977-57.2014.5.11.0017).

Although just cause is the maximum punishment that can be applied by employers, there are situations in which a single incident is serious enough to justify immediate termination. As already settled by the Labor Courts, offense to the honor and good reputation of the employer is a clear example of this.

With the advancement of new technologies, training of teams is therefore essential to prevent employees and employers from committing punishable acts, whether to employees, as warnings, suspensions, or even termination for just cause, or to employers, such as judgments for harassment committed by its representatives.

In the event of use of a message as evidence in court, most courts admit the submission of screenshots of WhatsApp. However, even in view of the informality of the Labor Courts, the ideal is to have a transcription of the content through notarial acts because of the possibility of using other applications to manipulate the conversations.

[1] Techtudo, "WhatsApp beats 1.5 billion active users mark." https://www.techtudo.com.br/noticias/2018/02/whatsapp-bate-15-bilhao-de-usuarios-ativos.ghtml. Accessed on: August 19, 2018.

Category: Tax

The 1st Panel of the Superior Court of Justice (STJ), in the judgment on Special Appeal No. 1.477.320, recognized the right to PIS and Cofins credits in relation to transportation in transactions to purchase vehicles from the manufacturer by the dealer with the purpose of later resale to the final consumer.

In that case, Bigger Caminhões Ltda. sought to secure its right to a credit from the contributions due to its being responsible for the payment of the freight transport of vehicles (automobiles, vans, and utility vehicles) from the Ford factory to its commercial establishments.

The precedent is relevant, since it reaffirms the position of the 1st Panel favorable to the taxpayer. This is because the 2nd Panel submitted Special Appeal No. 1.668.907 to the 1st Section (composed of the 1st and 2nd Panels) to investigate the need to review, or not, the STJ's understanding regarding the right to PIS and Cofins credits arising from expenses with transportation in the purchase of goods for resale.

The topic is not new in the 1st Section. In 2012, this adjudicatory body decided to recognize the right to PIS and Cofins credits in such situations. However, the composition of the body has changed substantially, since only five justices who voted at that time are still with the adjudicatory body.

Category: Labor and employment

“Panel rules out untimeliness of appeal related to error in identification of movant"

"Company shall have time limit to bring appeal bond paid at lower amount into good standing"

“Dismissal of appeal due to incomplete number in the form for collection of costs"

"Error in filling out petition sent via Electronic Judicial Proceeding (PJe) does not invalidate examination of appeal"

“Panel rules out irregularity in power of attorney with expired term of duration”

“Attorney with power of attorney granted when he was an intern may represent company"

"Company demonstrates that it has not been summoned to prove payment of costs and rules out dismissal"

“Panel rules out default applied due to six minute delay at hearing"

All of the excerpts transcribed above have been circulated in the news section on the website of the Superior Labor Court (TST) in recent months. The professionals who have been litigating in the Labor Courts for some time know that decisions favoring greater reasonableness and flexibility in the application of procedural law were not common.

A few years ago, appeals were being seen as dismissed due to immaterial differences in the payment of the appeal bond, often in the amount of a few cents. Irregularities were found in procedural representation due to a lack of authentication on the copy of power of attorney submitted to the record. It was considered to be default by a company when it arrived a few minutes late for a hearing while the plaintiff was still testifying.

At the time, when attorneys were faced with these difficult circumstances, they sought aid in civil and federal case law, which had long seen in such situations, mere procedural "setbacks" perfectly curable in the name of the principles of instrumentality, reasonableness, and a full defense.

But then, what helped to make the understanding of the Labor Courts more flexible?

Certainly, the advent of the Code of Civil Procedure of 2015 and Normative Instruction No. 39 of the TST were of great importance in the process of adapting the application of procedural rules, especially to make cogent and codified principles previously ignored by the Superior Labor Court.

In other words, the new code of civil procedure, whose articles are applied in a subsidiary manner in labor procedure, has introduced rules that ease the formalities of procedural acts, thus allowing litigants to repair, in certain circumstances, any defects/errors. In this manner, formal prejudice is avoided with a view to the full delivery of an adjudication.

Another factor that may have influenced the flexibility of the exacerbated formalism was the implementation of the Electronic Judicial Proceeding (PJe), which considerably reduced case processing time.

The CNJ, in a very interesting research study commissioned by the FGV, showed that less than 25% of electronic proceedings exceed the four-year processing level, compared to 50% of proceedings in physical media.

Thus, some defects such as procedural representation, insufficient payment of costs, clerical mistakes in filling out court forms, among others, that previously could moot an analysis of the merits of the litigation and impact greatly on the length of the proceedings, and as a consequence, violate the principle of speed, today can be resolved in a few days and few clicks.

Nor can we ignore the fierce advocacy of lawyers who have relentlessly brought before the higher courts the catastrophic repercussions of this rigorous understanding for the parties, the proceedings, and, why not, the lawyers themselves.

The news highlighted at the beginning of this article indicates that labor procedure finally moves towards reasonableness, thus avoiding innocuous formalisms and ceasing to be an end in itself in order to meet the true social, political, and legal longings for which it was conceived.

Category: Tax

The Government of the State of Rio de Janeiro has enacted a new special program for the payment of tax debts and fines from the State Accounting Court, through Complementary Law 182/2018 (LC 182/2018), published last Friday (September 21). Justified by the need to pay the 13th salaries of the Executive's officers, the measure came as an exception to Complementary Law 175/2016, which prohibited the grant of amnesty or remission of tax debts by the State of Rio de Janeiro for 10 years.

According to the new complementary law, the taxpayer can settle tax debts related to ICMS, IPVA (in the case of natural persons) and fines imposed by the State Accounting Court, with an amount higher than 450 UFIR-RJ (currently BRL 1,482.25), with due dates before June 30, 2018,  whether assessed or not, enrolled into the State outstanding debtors list or not and include those already being collected in court.

LC 182/2018 allows the payment of the consolidated tax debt (updated amount plus fines and interest) according to the following alternatives:

(i) a lump sum payment, paid up until the last working day of the issuance month of the payment form (DARJ), with a reduction of 85% of fines and 50% of default interests;

(ii) in 15 installments, with a reduction of 65% in fines and 35% of default interest;

(iii) in 30 installments, with a reduction of 50% in fines and 20% of default interest; or

(iii) in 60 installments, with a reduction of 40% in fines and 15% of default interest.

Debts related exclusively to fines resulting from non-compliance with ICMS’ obligations, whether or not enrolled into the State outstanding debtors list, can be included in the program if the fault occurred until March 31, 2018, according to the following payment alternatives:

(i) in a lump sum payment, paid up until the last working day of the issuance month of the payment form (DARJ), with a reduction of 70% of fines and 50% of default interest;

(ii) in 15 installments, with a reduction of 55% in fines and 35% of default interest;

(iii) in 30 installments, with a reduction of 40% in fines and 20% of default interest; or

(iii) in 60 installments, with a reduction of 20% in fines and 15% of default interest.

The law also allows taxpayers to cumulate these discounts with the fines reduction provided by the articles 70, 70-A, 70-B and 70-C of Law 2.657/96, which are:

(i) 50% in the case of payment within 30 days counted from the date of the knowledge of the Tax Assessment;

(ii) 20% in the case of payment within 30 days counted from the knowledge of the 1st administrative instance’s decision;

(iii) 10% in the case of payment within 30 days counted from the knowledge of the 2nd administrative instance’s decision;

(iv) 90% and 70% for fines for not complying with ancillary obligations, if these have been settled within 30 days or before the tax inspection, respectively; and

(v) 50% in penalties for infractions committed by micro and small enterprises, defined by Federal Complementary Law 123/2006.

In addition, taxpayers can use LC 182/2018 to pay (i) the remaining amounts of the consolidated tax debts of previous payment in installments programs, except for those related to other amnesty or remission programs; (ii) the ICMS related to tax substitution; and (iii) fines resulting from non-compliance with ancillary obligations.

The Complementary Law expressly prohibits the payment of tax debts enrolled into the program with the conversion of judicial deposits into State’s revenue. Therefore, taxpayers must have to pay the amount due with the relevant reduction stated in the amnesty program and then request the withdrawal of the judicial deposit.

The enrollment into the amnesty program implies in the irrevocable and irreversible confession of the tax debt, expressly renounces of any defense or administrative or judicial appeal as well as the withdrawal of those already filed. If there is an administrative proceeding in progress regarding the debt, the taxpayer must have to inform the waiver of defenses and appeals within 30 days counting from the enrollment into the amnesty program.

Finally, the enrollment into the amnesty program requires the regularity of the taxpayer over the entire installment period. Taxpayers can be excluded in case of (i) non-payment of three consecutive installments; (ii) existence of unpaid installment for more than 90 days; and (iii) default or irregularity of any other principal or ancillary obligations due for more than 60 days.

The deadline established for the enrollment into the amnesty program was set at 30 days from the regulation by the Executive Power, which has not occurred yet.

Category: Competition

On September 5, the Administrative Council for Economic Defense (Cade) issued a new regulation, Resolution No. 21/2018, to govern disclosure of sensitive materials produced in the course of administrative proceedings to investigate antitrust violations.

Disclosure of such materials was highly debated due to the existence of two conflicting and legitimate interests that Cade should take into account. The first interest is the need to maintain the incentives for Cade’s whistleblowing programs (leniency and settlement agreements), which became the cornerstone of public enforcement in Brazil. The second interest is the need to encourage follow-on civil litigation in Brazilian court (private enforcement), thus reducing the burdens faced by plaintiffs who seek redress for damages arising from antitrust violations.

CADE intended to harmonize these two interests in the new regulation, which clarifies the level of confidentiality to be granted to sensitive materials during different phases of the antitrust investigation.

The regulation preserved the confidentiality of negotiations of leniency and settlement agreements, as well as of the documents and information provided by the parties, even if they withdraw from the negotiations. Those materials shall only be disclosed to the parties themselves and authorized Cade personnel, thus maintaining incentives for wrongdoers to cooperate with Cade’s investigations.

In the course of the investigation phase of the administrative proceeding, CADE will disclose to any interested third-party public versions of both the complaint and the note drawing the conclusions of CADE Superintendence-General. These documents will contain the names of the companies and individuals under investigation, the alleged violation, a summary of the facts under investigation, and the provisions of law applicable. No details on the case or transcription of the documentary evidence will be disclosed.

Highly sensitive materials, such as self-accusatory material derived from leniency and settlement agreements, including a summary of violations (document describing details of the violation and the wrongdoers); documentary evidence produced by whistleblowers; documents and information protected by legal confidentiality; and documents the disclosure of which could grant a competitive advantage to other market players shall be kept in confidential files only accessible to the defendants, who are allowed to use them solely for the exercise of their due process rights before Cade.

Third parties with legitimate interests may be granted access to highly sensitive materials on an exceptional basis upon specific court order; when expressly authorized by law; when authorized by the signatory of the leniency agreement or settlement agreement; or pursuant to mechanisms for international judicial cooperation.

Documents and information not covered by the above-mentioned restrictions, including the identity of the signatory of the leniency agreement, will be made available to third parties once the CADE Court issues its ruling on the administrative proceeding.

The rules on disclosure under the new regulation tend to favor public enforcement. Parties seeking compensation for damages caused by cartels or other antitrust violations will need a specific court order to access materials that could support their civil claims. Moreover, the regulation provides that Cade’s Chief Counsel shall intercede in lawsuits involving access to highly sensitive documents and information, and shall request the suspension of those suits that could compromise Cade’s public enforcement policies.

On the other hand, in an attempt to reduce the hurdles for private enforcement, the regulation provides that evidence regarding compensation for damages caused by antitrust violations shall be considered by Cade as a mitigating factor in calculating fines or monetary contributions in settlements to be paid by wrongdoers. Cade has not detailed yet how this provision will work in practice.