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Category: Labor and employment

With globalization and the transformation of society, the adoption of labor compliance measures became a differentiating factor for companies willing to avoid the increasingly clear damages of unethical or inappropriate conduct.

Compliance, in general, may be defined as the principle of corporate governance that aims at promoting the organizational culture of ethics, transparency, and management efficiency, such that all actions of the company are in compliance with laws and regulations, internal and external controls, and values and principles.^[1]

Labor compliance, specifically, is a fundamental tool for the prevention and management of risks in the labor area. An investment that generates positive impacts for companies in their social and economic results, promoting improvement of the company's image and its organizational climate.

Its application aims to ensure compliance with labor standards, map possible risks, and encourage the adoption of good practices to value people, encourage the development of their skills, and promote a suitable work environment.

One of the main mechanisms of labor compliance is to improve people management processes, since litigation often arises from relationship problems between coworkers, in most cases, between managers and subordinates.

The tools that are part of the compliance program are:

• Code of Conduct: aims to consolidate the company's reputation and image. The Code of Conduct signals to everyone the conduct expected by the company, as well as its values and mission.

• Internal rules: establishes the rules of the work environment, with the procedures to be adopted in routine situations experienced throughout the employment contract.

• Reporting Channel: aims to facilitate the investigation and discourage the occurrence of practices of harassment and discrimination at the company.

• Internal investigations: consists of investigating reports received, mainly on topics such as moral harassment, sexual harassment, breach of company confidentiality, and other situations liable to termination of employment.

• Risk management: used to analyze and control potential threats related to people management by assessing all legislation applied to the company, mapping risks and developing internal controls.

• Corporate training: aims to make employees aware of the company's internal policies and rules, reinforcing the principles of the organization.

• Labor audit: based on the analysis of the documentation of labor routines to identify practices that are not in compliance with labor legislation, possible penalties, and solutions.

Among the consequences of the adoption of an effective compliance program particular highlighitng should be given to reduction of labor liabilities, decrease in the occurrence of lawsuits and administrative sanctions, and, especially, improvement in the work environment.

Although Brazilian culture is still very much focused on labor litigation, investment in preventive and consultative work is a market trend, mainly because of society's pressures in relation to corporate responsibility and maintaining a good work environment.

^[1] PINHEIRO, Iuri; SILVA, Fabrício Lima; BONFIM, Voilá. Manual do compliance trabalhista: teoria e prática [“Labor compliance manual: theory and practice”]. 2nd current, revised, and expanded edition. Salvador: Editora JusPodivm, 2021, p.50.

Category: Labor and employment

The judgment on Repetitive Topic No. 677, which brought back the discussion regarding the obligation of the debtor to pay any charges arising from default, even if the execution has been fully or partially secured via a judicial deposit, is suspended before the Superior Court of Appeals (STJ). Two Justices have already voted and there is a tie regarding who has liability for the payment of late payment charges arising after the deposit that secured the execution.

To clarify what is under debate, it is worth bringing back some concepts on the subject. In every lawsuit in which there is a judgment with a payment obligation, after the decision on the merits, the execution phase begins, in which the debtor will effectively pay what he owes to the creditor, according to the judgment rendered.

Executions of judgment generally follow the procedural flow: debtor and creditor submit their calculations, the judge decides who has indicated the correct amount (i.e., ratifies the amount due), the debtor is summoned to pay and, finally, payment is made via judicial deposit.

However, if the debtor believes that the amount ratified does not correspond to that really due, the discussion regarding the calculations may continue, and it will be incumbent on the judgment debtor to guarantee the amount of the execution, usually by means of a deposit.

In the exercise of its right to a full defense, the debtor, in certain cases, may even submit the dispute to higher courts. Meanwhile, the amount ratified remains deposited in the judicial account, and is adjusted for inflation following the indexes for savings accounts. Once the discussion is closed, the case returns to the trial court, for the amounts to b e released to the creditor.

In relation to this point, a debate began regarding the adjustment for inflation and late payment charges due to the creditor. This is because the remuneration applied on the amount deposited in the judicial account would not be sufficient to cover the adjustment criteria considered correct. Likewise, the late payment charges due, in theory, due to the time elapsed between the ratification of the calculations made by the trial judge and the actual receipt of the amount by the creditor, after the judgment, would also not be sufficient. This period between the ratification, followed by the deposit, and withdrawal of the amounts would represent a significant monetary loss for the creditors, who began to claim the differences in the adjustment for inflation and late payment to be paid by the debtor.

However, it is claimed that it would not be fair to assign to the debtor in good faith liability for late payment charges and adjustment for inflation, since it had the execution guaranteed at the time it was summoned, that is, soon after ratification of the calculations.

In view of this conflict, which began to be raised and discussed in many proceedings, the need arose to establish a specific theory on the matter, so that all the bodies of the Judiciary Power could extinguish the corresponding disputes.

Then, in 2014, Repetitive Topic No. 677/STJ was decided, which ended all discussions regarding liability for the payment of late payment charges arising after the deposit that guaranteed the execution, by establishing the theory that "in the execution phase, the deposit in court of the amount (full or partial) of the award extinguishes the obligation of the debtor, within the limits of the amount deposited" (emphasis added).

On August 25, 2020, however, during a session of the Third Panel of the STJ, Justice Paulo de Tarso Sanseverino raised a point of order to propose a review of the matter, in order to define "whether, in the enforcement proceeding, the deposit in court of the amount of the obligation, with the consequent application of interest and adjustment for inflation at the expense of the depositary financial institution, exempts the debtor from the payment of charges resulting from default, as provided for in the judicially or extrajudicially enforceable instrument, irrespective of the release of the amount to the creditor.”

One of the pillars of the revision is the fact that the judicial deposit made for the purposes of guaranteeing the execution could not be confused with payment, since it would not have animus solvendi (intention to settle the debt), such that there would be no reason to exempt the debtor from liability for the late payment charges.

On October 7, 2020, in an opinion drafted by Justice Nancy Andrighi, the STJ accepted the point of order and the procedure for review of Topic 677/STJ was initiated.

On June 2, 2016, the reporting Justice voted in favor of revising Topic 677/STJ, supporting implementation of the following theory: “In enforcement proceedings, the deposit made as security for the judgment or arising from attachment of financial assets does not relieve the debtor from payment of the consequences of its default, as provided for in the enforceable instrument, and, upon actual delivery of the money to the creditor, it must deducted from the balance of the judicial account.”

After the reporting judge's vote, there was a request for review of the record and the case was removed from the agenda. The judgment was resumed on September 10, 2021, when Justice Paulo de Tarso Sanseverino heard the appeal, but denied it relief. Currently, therefore, there are two divergent written opinions on the topic.

The reasoning of Justice Sanseverino was to the effect that there would be no fault by the debtor in the fact that the adjustment for inflation applied by banks in contract with the Judiciary is lower than the charges resulting from the delay.

The withdrawal of the amount covered by the execution should be carried out by the creditor immediately after the deposit is made. The non-withdrawal immediately thereafter is a mere exception, which occurs only when the judgment debtor files an objection on grounds deemed relevant by the court.

In the view of Justice Sanseverino, the decision on the allocation of the deposit aimed at guaranteeing the execution is not in the hands of the debtor, but rather the Judiciary, and no liability or penalty may be assigned to the debtor for the delay in the release and consequent bank remuneration below the late charges.

As highlighted by the Justice, the intended revision of the theory would bring about disadvantageous consequences for the enforcement proceeding, inasmuch as it would discourage the debtor from offering money for attachment and would encourage it to plead substitution of the cash guarantee with a bank guarantee. This is because it is disadvantageous for the debtor to offer money for attachment (which will be adjusted for inflation at the savings account rate), while it could invest the same amount in an investment with much higher profit potential.

In addition, the execution would be made eternal, since there would always remain late payment charges to be executed, generated between the date of the deposit and the date of actual withdrawal. In other words, even if the deposit were made by the debtor on one date and withdrawn by the creditor on the subsequent day, there would be a difference in default interest to be enforced, and the continuation of the execution on account of this remaining amount would be mandatory.

It is also important to emphasize the provisions of article 401, I, of the Civil Code, which imposes extinguishment of the arrears by the debtor, when it pays the installment due, plus the losses arising from the delay. In other words, any obligation related to late payment would be extinguished when the debtor makes the judicial deposit, consisting of the principal amount of the debt, plus the late payment charges up to the time of the actual deposit.

In addition, precedents 179 and 271 of the STJ regulate the adjustment for inflation of amounts deposited in court. They provide that the payment of the adjustment for inflation related to the amounts collected is the responsibility of the establishment that receives the money from the judicial deposit (bank in a partnership agreement with the Judiciary), and that the adjustment is independent of a specific action against the depositary bank. Liability for late payment charges, therefore, is taken out of the hands of the debtor.

After the opinion of Justice Paulo de Tarso Sanseverino, Justice João Otávio de Noronha requested review of the case record, which was converted into a collective hearing for the other Justices, again suspending the judgment, without a date for its resumption.

Category: Tax

The Superior Court of Appeals (STJ) decided, in 2018, Repetitive Appeal (REsp) 1.221.170/PR, which dealt with appropriation of PIS and Cofins credits based on the concept of inputs. At the time, the STJ gave the legal interpretation to the provisions of article 3, subsection II, of laws 10,637/02 (PIS) and 10,833/03 (Cofins), which ruled out the restrictive interpretation advocated at that time by the Federal Revenue Service.

At that time, the STJ tied the concept of input material to the criteria of essentiality or relevance, that is, considering the indispensability or importance of a given item (good or service) for the development of the economic activity performed by the taxpayer.

With the covid-19 pandemic, the analysis of the concepts of essentiality and relevance gained new developments. This is because, among the measures imposed during the state of calamity, companies were required to incur expenses with protective equipment designed to prevent contamination with and spread of the virus.

Since February of 2020, for example, the use of personal protective masks has been mandatory for circulation in public and private spaces accessible to the community, on public roads, and on public transport. It is also mandatory to adopt measures for sterilization of places of public access, including vehicles, and the provision of sanitizing products to users during the validity of the measures to address the public health emergency resulting from the covid-19 pandemic (Law 13,979/20).

Thus, masks, gloves, and hand sanitizer have become not only essential and relevant items in the fight against the pandemic, but also determinant for a company’s operation, to the exact extent of the interpretation fixed by the STJ in article 3, subsection II, of Laws 10,637/02 (PIS) and 10,833/03 (Cofins).

In the midst of the chaotic public health scenario, questions began to arise as to the possibility of appropriation of PIS and Cofins credits referring to these items. In the judicial sphere, the few decisions already rendered on the matter were unfavorable to taxpayers (cases 5003996-98.2020.4.03.6110 and 5012198-94.2020.4.03.6100, both from the TRF3).

Nevertheless, on September 27 of this year, taxpayers received more encouraging news on the topic. Almost two years after the beginning of the pandemic, the Federal Revenue Service published Cosit Advisory Opinion 164 recognizing the possibility of taking PIS/Cofins credits on expenses incurred with sanitizer, masks, and gloves used in protection against covid-19, as it considers that these items fit within the concept of an input.

The RFB found that gloves and sanitizer may be considered an input, as they fit within the concept of PPE (Personal Protection Equipment), for which credits had already been expressly recognized by the STJ's own repetitive decision (REsp 1.221.170/PR) and by Cosit Normative Opinion 05/18.

As for protective masks, the RFB argued that Joint Ordinance 20/2020, promulgated by the Special Secretary of Labor Welfare of the Ministry of Economy and the Ministry of Health, expressly excluded this item from the concept of PPE. Therefore, its utilization as a credit could not be based on these grounds. Nevertheless, the RFB found that the masks are mandatory items by legal requirement, recognizing their use as giving rise to a credit on this other basis, which is also supported by Cosit Normative Opinion 05/18.

It is worth noting that the appropriation of PIS/Cofins credits for protective masks, gloves, and sanitizer was recognized only for workers allocated to the activities of production of goods and/or service providers, but not those allocated to administrative or commercial activities.

This position is in line with the majority case law that has been forming in the administrative sphere, in which a certain resistance to recognizing PIS/Cofins credits for commercial companies or any activity not directly connected to the provision of services or production or manufacture of goods is identified, per the literal meaning of article 3, subsection II, of laws 10,637/02 (PIS) and 10,833/03 (Cofins).

However, there are good arguments to challenge this tax interpretation that does not recognize the PIS/Cofins credit for commercial companies (retailers, wholesalers, etc.), especially due to the equal protection of companies, regardless of the area in which they operate, and the very principle of non-cumulativeness of the PIS/Cofins.

Specifically in the case of equipment intended to prevent the spread of coronavirus, it is possible to argue for its mandatory use even for the very operation of the commercial company, given the rules instituted by the public authorities.

The RFB's position is a first step in the recognition of the right to the PIS/Cofins credit for protection items against the dissemination of covid-19. It should be applied to all companies to keep in line with the concepts of essentiality and relevance defined by the STJ. The decision serves as an indication of the direction this discussion may take in the administrative and judicial spheres.

It is important to conduct a detailed analysis of this issue, observing the specificities of each company's activity and its classification within the concepts established by the STJ, considering the greater or lesser risks of being assessed.

Category: Tax

In 2018, the Superior Court of Appeals (STJ) ruled out the restrictive concept of input material, according to which the expense with input material should be directly integrated into the formation process of the end product or provision of service in order to be eligible for PIS and Cofins credit.

At that time, the 1st Section held that the "concept of input material should be evaluated in light of the essentiality or relevance, that is, considering the indispensability or importance of a given item - good or service - for the development of the economic activity performed by the taxpayer” (Repetitive Special Appeal No. 1.221.170/PR).

Although the STJ examined the issue in a proceeding involving legal entities engaged in industrial activities, the theory established allowed commercial companies (retailers, wholesalers, etc.) to take credits also with regard to essential or relevant items for their business activity.

It was expected that this judgment would settle the matter in the regional courts, due to the clarity of the theory established and the grounds set out in the written opinions of the Justices. However, both at the administrative and judicial levels, there have been decisions denying the right to a credit for expenses, such as credit/debit card fees, advertising and promotion, especially in lawsuits involving taxpayers in a commercial activity.

Precisely because of this, the discussion has recently gained a new chapter and is expected to generate new debates in the 1st Section of the STJ soon, this time to review the issue in relation to commercial companies.

Just Manoel Erhardt, an appellate judge convened by the Federal Court of Appeals for the 5th Circuit, admitted the processing of Motion to Resolve Divergence No. 1.810.630/PR filed by a retailer against the decision of the 2nd Panel. The purpose is to resolve a divergence regarding the possibility of crediting PIS and Cofins in relation to expenses considered essential for the performance of the taxpayer's business activity. In the specific case, it seeks to credit financial expenses arising from loans and financing.

The taxpayer argues that, by conditioning the characterization of a given expense as input material to the direct application in the productive process or in the provision of services, the 2nd Panel reinstated the restrictive concept of input material already ruled out by the 1st Section, diverging from the understanding settled in Repetitive Special Appeal No. 1.221.170/PR.  

The repetitive theory established by the STJ clearly disassociated the concept of input from service and industrial activities, recognizing as creditable any and all goods or services that are essential or relevant for the development of any economic activity. Therefore, every expense incurred by a taxpayer, industrial, commercial, or service provider, that is essential for the performance of its economic activity, is to be considered an input and generate PIS and Cofins credits.

A different understanding could ultimately create unequal situations in which the industrial company could take credits for certain essential expenses, such as advertising and publicity, while the commercial company would not have the same right, which is not consistent with the STJ’s decision in Repetitive Special Appeal No. 1.221.170/PR or with the governing legislation.

Although the case is limited to expenses arising from loans and financing, it is expected that the 1st Section will examine the scope of the repetitive theory as a whole in the judgment of the motion to resolve the divergence. The measure would standardize the understanding on the matter nationwide, providing legal certainty to taxpayers, especially commercial companies.

Category: Labor and employment

Law No. 14,151/2021, published on May 13 of this year, establishes in the head paragraph of its article 1 that “during the public health emergency of national importance resulting from the new coronavirus, pregnant employees shall remain away from on-site work activities, without prejudice to their remuneration.” In the sole paragraph of the same provision, it is stated that the employee on leave "will be available to perform activities at home, through telework, remote work, or another form of distance work."

Much has been questioned regarding the employer's liability for the payment of wages of pregnant employees in the event of impossibility of performing the activities at a distance, considering that the prohibition on performing the tasks in a face-to-face environment arises from the emergency public health crisis caused by the pandemic and from a legal mandate.

The liability of the employer to bear the burden of remuneration is not questioned, if it is possible to remove the employee from on-site activities, without prejudice to effective work. However, in activities that need to be performed in person, employers have a double burden, when they cannot go without effective work: the payment of the wages of pregnant employees on leave and the hiring, as temporary workers, of another employee for the role.

Various employers have directly challenged the Federal Government regarding this excessive burden and some claims have already been granted when brought to court.

Recently, the Federal Courts (Federal Court of Appeals for the 3rd Circuit - São Paulo/SP) issued two decisions on this matter, in the record of cases No. 5003320-62.2021.4.03.6128 (1st Federal District Court of Jundiaí/SP) and No. 5006449-07.2021.4.03.6183 (14th Federal Civil Court of São Paulo/SP).

In the first suit, by way of a writ of mandamus, an employer sought to advance the maternity leave pay of her domestic servant. The request was granted by the Federal Court, which ordered the INSS to accelerate the maternity leave pay for the period of leave resulting from the impossibility of performing the activities at a distance by the pregnant worker, pursuant to article 1 of Law No. 14,151/21.

The judge relied on the rule provided for in article 394-A of the Consolidated Labor Laws (CLT),^[1] which provides for the prohibition on performance of hazardous activities by pregnant employees.

In the decision, the judge pointed out that the case involved an insured employee who worked as a domestic worker, which would make it impossible to perform remote work or any other form of remote work. He also pointed out that the benefit provided for in article 1 of Law No. 14,151/21 to put the pregnant employee on leave from in-person work, without prejudice to remuneration, in order to prevent the risk of contagion by covid-19, was created by the State. Therefore, it would not be incumbent on the employer to bear the financial burden.

In addition, for the judge, the situation would fit within the rule provided for in paragraph 3 of article 394-A of the Consolidated Labor Laws, which provides for restrictions on work by pregnant employees in unhealthy environments, in the same manner as set forth in article 1 of Law No. 14,151/21.

The granting of advance maternity leave pay was said to be a duty of the State, and cannot be assigned to employers, as it violates the protection of maternity and pregnant women, ensured both by the provision set forth in the Consolidated Labor Laws and article 1 of Law No. 14,151/21.

The second decision stemmed from an ordinary action in the Federal Courts against the INSS and the Federal Government. The action sought direct compensation of the maternity leave pay paid by the employer during the period of leave of pregnant employees due to the impossibility of performing the work at a distance, pursuant to article 1 of Law No. 14,151/21 (Case No. 5006449-07.2021.4.03.6183).

In the case, it was reported that pregnant employees provided urgent and emergency medical care services in emergency rooms and hospital units and, therefore, could not provide remote care.

The difference in this action was the procedure, since, despite the petition for injunctive relief in the action , wages continued to be paid normally, and the employer requested compensation for the remuneration paid.

In the decision, it was emphasized that, since it is nursing work, it would be impossible to perform the activities remotely. Moreover, Law No. 14,151/21 has not defined who is liable for payment of the remuneration of pregnant employees whose professional activity is incompatible with distance work.

Whereas the Federal Constitution guarantees everyone the right to health, maternity, family, and society (articles 196, 201, II, 226 and 227), it establishes the duty of the State to promote social and economic actions and policies to achieve such purposes, including through the Social Security System, and that it is the Social Security's obligation to fund the coverage of claims, as in the case of unforeseen events arising from the emergency crisis caused by the covid-19 pandemic, the employer's request was granted, including the emergency relief requested.

As can be seen, the creation of an obligation to grant leave for in-person work functions, according to article 1 of Law 14,151/2021, generates much more than just the act of putting the pregnant employee on leave. It also creates a burden, often excessive for the employer. Given this situation, the Federal Courts have taken a position on the State's responsibility to pay the wages during the period of leave, either by advancing the maternity leave pay, under the terms of article 394-A of the Consolidated Labor Laws, or even the compensation of wages already paid by the employer.

To this end, it is essential for it to be impossible for pregnant employees to perform their activities outside the physical environment of the employer, and the company must prove that pregnant employees cannot work at their residence, through telework or remote work or other form of distance work. In the event the request is granted, the employer may not require employees to render any services to it, under penalty of constituting fraud against Social Security (article 171, paragraph 3, of the Penal Code).^[2]

^[1] Article 394-A. Without prejudice to their compensation, including the amount of the health hazard premium, employees must be on leave from: I - activities considered unhealthy to a maximum degree, for the duration of pregnancy;

II - activities considered unhealthy at a medium or minimum degree during pregnancy;

III - activities considered unhealthy to any degree during lactation.

Paragraph 2. The company is responsible for paying the health hazard allowance to pregnant or breastfeeding employees, compensating them pursuant to the provisions of article 248 of the Federal Constitution, at the time of collection of the contributions levied on the payroll and other income paid or credited, for any reason, to the individual providing services.

When it is not possible for a pregnant or lactating employee on leave pursuant the head paragraph of this article to perform their activities in a healthy place at the company, the event shall be considered as a risk pregnancy and shall entitle them to maternity pay, pursuant to Law No. 8,213, of July 24, 1991, during the entire period of leave.

^[2] Article 171 - Obtaining, for oneself or another, an illicit advantage, to the detriment of another, inducing or maintaining someone in error, by means of artifice, trickery, or any other fraudulent means:

Penalty - confinement, from one to five years, and a fine, from five hundred thousand réis to ten contos de réis.

(...)

Paragraph 3 - The penalty is increased by one third if the crime is committed to the detriment of an entity governed by public law or an institution of the popular economy, social assistance, or a charitable institution.

Category: Labor and employment

Ordinance No. 620/21, published by the Ministry of Labor and Social Security (MTP Ordinance 620/21) on November 1 (and in effect since then), establishes that:

• when hiring a worker or continuing the employment, employers are forbidden to demand any discriminatory or limiting documents, especially proof of vaccination;
• requirement of a vaccination certificate in recruitment processes, as well as the termination for cause of an employee due to the non-presentation of a vaccination certificate, is considered a discriminatory practice;
• the termination of employment due to a discriminatory act, under the terms established in MTP Ordinance 620/21, in addition to the right to compensation for moral damages, allows employees to choose between: (i) reinstatement, with full compensation for the entire period of leave, upon payment of the remuneration due, adjusted for inflation plus legal interest; or (ii) receiving, in double, the remuneration of the period of leave, adjusted for inflation plus legal interest;
• employers must establish and disseminate guidelines or protocols indicating the necessary measures to prevent, control, and of the risks of transmission of COVID-19 in the workplace, including the national policy guidelines on vaccination and the promotion of the effects of vaccination in reducing COVID-19 contagion; and
• employers may establish policies to encourage the vaccination of their workers.

MTP Ordinance 620/21 also establishes that, to ensure the preservation of sanitary conditions in the workplace, employers may offer staff periodic testing to prove that they are not contaminated by COVID-19. In this case, workers are obliged to carry out testing or present a vaccination card.

The ordinance goes against recent decisions of the labor courts – based on the prevalence of a public interest in protecting the health of the community in the workplace – that validated termination for cause of workers who refused to be vaccinated. It also goes against the understanding of the Public Labor Prosecutors’ Office (MPT), which has expressed its support for requiring vaccination of workers as a measure to protect the health of workers in the workplace, under penalty of adoption of disciplinary measures by employers, including termination for cause in the event of an unjustified refusal.The restrictions imposed by MTP Ordinance 620/21 are also at odds with the recent decisions of the Brazilian Supreme Court involving mandatory vaccination.

Due to this, there are great chances that MTP Ordinance 620/21 will be deemed unconstitutional. However, until that happens, employers who have already adopted measures requiring vaccination for working on-site must review (albeit temporarily) such practices, under penalty of they being considered discriminatory and the employer being subject to the consequences established by MTP Ordinance 620/21. Any termination based on the lack of vaccination, even without cause, may be included in this case and, therefore, considered discriminatory for the purposes of the ordinance. For now, it is only possible to recommend that employees get vaccinated.

The full Portuguese version of MTP Ordinance 620/21 can be accessed at this link.

UPDATE - 19/11/2021

In a preliminary decision, Brazilian Supreme Court suspends restrictions imposed by MTP Ordinance 620/21

The Justice of the Brazilian Supreme Court (STF) Luís Roberto Barroso granted a preliminary decision last November 12^th to suspend the restrictions imposed by the Ministry of Labor and Social Security (MTP)’s Ordinance No. 620/21 in its article 1, caput and §§ 1st and 2nd; article 3, caput; and article 4, caput, items I and II. The Justice’s decision responds to lawsuits filed in the Supreme Court questioning the constitutionality of the restrictions imposed by the ordinance.

As we had anticipated above, the rules established by Ordinance No. 620/21 prohibiting employers from requiring proof of vaccination in the workplace were at odds with the recent decisions of the Brazilian Supreme Court involving the possibility of requiring vaccination. Nor were they in line with labor courts’ decisions that validated termination for cause of workers who refused to be vaccinated and with the understanding of the Public Labor Prosecutors’ Office on the subject.

Justice Barroso, however, determined that this preliminary decision does not apply to people who have an express medical contraindication to vaccination, provided that it is based on the National Vaccination Plan against COVID-19 or on scientific consensus. In this case, he considers it acceptable that immunization is not mandatory.

As the suspension of the articles mentioned in the ordinance was determined by the Justice in a preliminary decision, it still needs to be judged by Brazilian Supreme Court.

According to the Court’s schedule, the judgment session should take place between November 26^th and December 3^rd, 2021.

We will continue to follow developments of these topics and their potential consequences.

 UPDATE - 12/02/2021

Interruption of the judgment regarding Brazilian Supreme Court preliminary decision which suspends restrictions imposed by MTP Ordinance 620/21.

On December 2^nd, Justice Nunes Marques interrupted the virtual session of the judgment regarding the preliminary decision granted by Justice Luís Roberto Barroso, which suspended the restrictions imposed by the Ministry of Labor and Social Security (MTP)’s Ordinance No. 620/21, for the judgment to be done face to face and not virtually.

Up to now, four Supreme Court Justices have already voted and all of them were in favor of the suspension of the restrictions imposed by MTP Ordinance 620/2021.

We will continue to follow the developments regarding the reschedule of the judgement.