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Category: Labor and employment

The head section of article 464 of the Consolidated Labor Laws (CLT) provides that "the payment of salaries shall be accompanied by a receipt, signed by the employee." The sole paragraph of this legal provision provides that "proof of deposit into a bank account opened for that purpose, on behalf of the employee, with the consent of the latter, in a credit facility near the place of work shall be required." In other words, a bank deposit made by the employer into an account opened for this purpose, with the consent of the employee, is equated to a signed payment receipt.

As the legal provision was enacted in 1943, the possibilities for making payments have increased greatly since then. It is common practice currently to pay wages through electronic banking transactions. In this manner, employees no longer receive paper money at the end of the month and therefore cannot provide any individual receipt to the company.

In addition, it is no longer necessary for the current account to be opened at a banking institution located near the employees, since the Internet allows bank transactions anywhere and at any time, without requiring a physical presence at the branch.

In this context, the debate regarding the validity of payment slips as a means of proving payments made by employers arose, since these documents do not present individual signatures or vouchers of the deposits made.

When prompted to rule on the matter, Justice Douglas Alencar Rodrigues, of the Superior Labor Court (TST), issued a decision containing the understanding that payment slips issued by employers are not equivalent to the receipts referred to in article 464 of the CLT, since they do not have a signature.

The Justice further stated that, in accordance with the principle of suitability for the production of evidence, it would be incumbent on the claimant to challenge objectively the content of the payment slips.

"To do this, it would be sufficient to submit one of his paychecks that would eventually show the incorrectness of the amounts stated in the documents, which did not occur.”

This is not, however, the only position adopted by the TST on the topic. In an identical situation, Justice José Roberto Freire Pimenta agreed that proof of payment will only be valid if the receipt is signed or if the respective deposit receipt is presented.

Divergent decisions raise legal uncertainty and cause doubts for employers regarding how to proceed in order to avoid future judgments providing for payment of monies already paid.

As a result of these differences of opinion, the most cautious position is for employers to take the following preventive measures:

• Include in new employee packages, or even as a provision in the employment contract, a signed statement by which employees state the bank account in which they wish to receive their wages; and
• Keep the bank deposit vouchers for deposits made for employees, along with the payment slips, in order to prove that the payment was made into the current account provided by the employee at the time of hiring.

If employers adopt the above provisions, signature on payment receipts and bank vouchers becomes only measures of extreme caution, since, based on the sole paragraph of article 464 of the CLT, proof of bank deposit in a checking account provided by the employee would be enough to eliminate the need to sign the receipts.

These practices ensure employers are able to correctly demonstrate payments made to employees, thus satisfying the burden of proof for the payment required by law and avoiding possible questions of invalidity of the evidence presented.

Category: Infrastructure and energy

Federal Law No. 13,726/18, or the De-bureaucratization Law, enacted in October, not only authorizes, but also obliges public servants to dispense with or at least simplify formalities or requirements in their dealings with citizens. Among them are the following: 

• Authentication of signature.
• Certification of copies of documents, when presented together with the original, including personal documents of the citizen.
• Presentation of birth certificates, which may now be substituted by an identity card, voter registration, professional or work identity, work permit, military enlistment certificate, or passport.
• Presentation of voter registration (except to vote or register a candidacy).

 In addition to the removal of these formalities or requirements, the De-bureaucratization Law also limited the possibility for public agents to request certificates and documents issued by agencies or entities that are members of the same Executive, Legislative, or Judicial Branch, and thus require institutional dialogue. In this sense, the legislator authorized the creation of industry working groups aimed at (i) identifying legal or regulatory provisions that impose excessive or exaggerated requirements, as well as unnecessary or redundant procedures; and (ii) suggest legal or regulatory measures aimed at eliminating excess bureaucracy.

The De-bureaucratization Law goes beyond authorizing the citizens themselves to prove facts by means of a written and signed declaration, when the competent department cannot provide documentary evidence for reasons not attributable to the applicant: in practice, in cases of a strike by public bodies, for example, the documents issued by them may be replaced by a self-declaration during the shutdown period, with the declarant being subject to the administrative, civil, and penal sanctions applicable.

The law also authorized verbal, telephone, and e-mail communication between public agents and citizens, which already occurred in many cases, but was not formally regulated.

The legislator also instituted the De-bureaucratization and Simplification Seal, designed to recognize and encourage projects, programs and practices that simplify the functioning of the public administration and improve assistance to users of public services. Still pending regulations, the seal represents a mechanism of management by stimulus, which, although little used by the Brazilian public administration, can be very effective.

In short, the legislator sought to discipline rules to give concrete form to the principles of efficiency, informality, and substantive truth, which, although put into positive law since the Federal Constitution and the Federal Administrative Procedure Law, did not have normative parameters for their application. This gap has justified the bureaucratization, the interaction by civil servants with citizens, which should be mitigated by the new law, the more citizens are aware of their rights.

Category: Competition

In unanimously deciding to dismiss an administrative proceeding initiated to investigate an alleged cartel in the Brazilian and international market for electronic power steering systems (EPS), the Administrative Council for Economic Defense (Cade)’s Tribunal indicated last month that it will require a more robust standard of proof to demonstrate participation in antitrust conduct in cases originating from leniency agreements.

At Judgment Session No. 137, held on February 13 of this year, the Tribunal acquitted, due to insufficient evidence, the four companies accused (and their respective employees) who had not signed Settlement Agreements (TCC) with Cade throughout the case.

Created in 2000, after an amendment to the Competition Law in effect at the time, the Cade Leniency Program allows companies and/or individuals involved in cartels or other illegal collective anticompetitive conduct to enter into a leniency agreement with the antitrust authority and the Public Prosecutor's Office and receive immunity at the administrative and criminal levels in exchange for cooperation with investigations.

With the first agreement of this kind entered into only in 2003, the program has gained importance, became a crucial tool for fighting cartels in Brazil, and has been undergoing refinements based on the practical experience of the authorities. By the end of 2018, Cade had signed 88 leniency agreements, a number driven up by Operation Carwash as of 2015, and adjudicated 28 administrative proceedings derived from these agreements.

The administrative proceeding dismissed by Cade’s Tribunal in February was based on information and documents provided by the signatories to a leniency agreement and two subsequent TCCs agreements entered into by companies participating in the cartel. The documents submitted involving companies that did not settle were limited to business cards, internal meeting minutes and e-mails, travel receipts for alleged meetings and internal spreadsheets from the companies that cooperated with the investigation.

At the trial session, the commissioner rapporteur João Paulo Resende sustained that the set of evidence - composed of only the confession by the signatories to the agreements and indirect evidence - was not robust enough to prove the involvement of those four companies in the cartel.

A mere accusation on the part of those who benefit from an agreement with the agency is not sufficient to prove involvement by third parties. Along the same lines, documents produced unilaterally by beneficiaries (such as minutes and handwritten notes or internal e-mails) or that may have been obtained in a context other than the conduct investigated (such as business cards) have little evidentiary value.

Cade's position in this case is commendable, is in line with the practice observed in Brazilian higher courts, which tend not to enter judgments against the accused based exclusively on reports obtained through plea bargains, and contributes to preserving the quality of the Brazilian Leniency Program and legal certainty in administrative proceedings investigating cartels.

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Category: Banking, insurance and finance

In 2013, shortly after scandals involving the manipulation of exchange rates and interest rates became public, the International Organization of Securities Commissions (IOSCO) published a report in response to a consultation on rules applicable to financial benchmarks. Not surprisingly, concerns were raised about the fragility of certain benchmarks, particularly in terms of integrity and continuity.

In Brazil, in transactions carried out in the financial and capital markets, one of the benchmark parameters most commonly adopted is the Interbank Deposit (DI) rate. It serves as a benchmark for numerous bank loans (transactions between banks and clients), raising of funds through debentures, and various financial investments (e.g., DI funds), among other transactions.

In very simple terms, the rate (DI) used in all these situations derives from the interest rate used in interbank transactions. More specifically, the DI rate is calculated on the basis of interbank loans between institutions that are not members of the same conglomerate, based on pre-fixed rates and with a one-day term.

Therefore, determination of the DI rate for a date is always done according to certain procedures, through which a universe of eligible transactions is subject to scrutiny. The methodology used has remained fairly constant over time, although it has undergone occasional targeted improvements.

It so happens that, some years ago, there has been a significant reduction in the number of transactions carried out in the interbank market. In 2013, for example, when the DI rate began to show large deviations from the Selic rate (which traditionally accompanied it pari passu), this situation was officially recognized for the first time, and Cetip (succeeded by B3 - Brasil, Bolsa, Balcão S.A.) decided to change its calculation methodology, such that if, on a given day, there were less than ten transactions in the interbank market, the historical correlation between the DI rate and the Selic rate was used for the purposes of calculating the rate.

On October 1, 2018, following the recommendations of the Iosco (especially regarding the sufficiency of data for calculation of the benchmark, covered by Principle 7), the methodology for calculating the DI rate used by B3 was based on an observation, or lack thereof, of two conditions: (i) the number of transactions eligible for calculating the rate is equal to or greater than 100; and (ii) the sum of the volumes of transactions eligible for the rate calculation is equal to or greater than R$ 30 billion. The new rule, therefore, confers more transparency and robustness to the benchmark, which now depends on two variables: number and size of the transactions. Thus, if at least one of the two conditions above is not observed on a certain calculation date, the DI rate released will be equal to the Selic Over rate.

In view of this change, it may be possible to revisit the bases that led to the promulgation of the Superior Court of Justice's Precedent No. 176, of 1996, which states that "... a contractual provision is void that subjects the debtor to the interest rate disclosed by Anbid/Cetip," because this rate is supposedly "... submitted to the whim of one of the parties." This is because, with the new methodology, the risk that the DI rate may be manipulated is more remote, if not practically nonexistent.

Category: Labor and employment

Law No. 13,467/2017, known as the Labor Reform, has been in force for more than a year, but, to date, not all of the amendments it proposed to the Consolidated Labor Laws (CLT) have been reviewed by the Labor Courts. This is the case for the exceptions to salary equalization, such as organized career frameworks and job and salary plans.

Salary equalization per se was sought in 25,135 cases assigned to labor courts through Brazil in 2018.[1] However, there are no specific precedents for the new rules for organized career frameworks and job and salary plans to be used as an exception to equalization.

Prior to Law No. 13,467/17, salary equalization was regulated by the head section and paragraph 1 of article 461 of the CLT, according to which the employer must pay the same salary to employees who meet the following requirements cumulatively: (i) work in the same job; (ii) provide services in the same municipality or metropolitan region; (iii) equivalence of length of service (difference of less than two years in the same position); and (iv) same productivity and technical level.

The Labor Reform changed requirements (ii) and (iii). Per the new wording of the head section and paragraph 1 of article 461 of the CLT, workers seeking salary equalization must provide services in the same business establishment as the paradigm, and no longer in the same municipality or metropolitan region. In addition, it is imperative that they have the same length of service in the position (less than two years) and an equivalent length of service at the company (less than four years).

Pursuant to the previous wording of paragraph 2 of the CLT, salary equalization could be waived if the employer had personnel organized in a career framework, provided that it was approved or ratified by the Ministry of Labor, in accordance with what was established in item I of Precedent No. 6 of the Superior Labor Court (TST).^[2] 

In the current wording, there is no longer need for approval or ratification of the career framework by any public agency, and the employer may adopt it by means of an internal company policy or via collective bargaining (collective bargaining agreement or collective labor convention). With the amendment, item I of the TST's Precedent No. 6 must be canceled or amended, which has not occurred thus far.

According to the previous wording of paragraph 3 of article 461 of the CLT, promotions for positions covered by the career framework should be carried out, alternately, for merit and seniority. With the enactment of Law No. 13,467/2017, promotions may be carried out for merit or seniority.

Thus, in order to avoid salary equalization due to the existence of career plans and organized frameworks, it is necessary to fulfill two basic requirements. The first one consists of the objectivity of the criteria for promotions; if there is subjectivity, the plan may be disqualified. The second refers to satisfaction of the requirements of seniority or merit, and no longer alternatively due to merit and seniority.

Considering that the legislation in force allows for the establishment of a career framework through an internal company policy or collective bargaining, some parameters may be defined to guarantee its validity, such as (i) performing systematic evaluations of competencies for promotion due to performance; (ii) time in the position; (iii) complexity of the tasks performed; and (iv) completion of courses/improvement, among others.

The Labor Courts have already decided numerous cases, accepting or rejecting salary equalization suits, per a review of the new requirements set forth in the head section and paragraph 1 of article 461 of CLT for the purpose of applying the concept. However, with regard to the other changes brought about by Law 13,467/2017 (paragraphs 2 and 3) concerning career frameworks, the decisions handed down only address the obstacle to equalization due to the existence of the concept. They do not enter into the merits of the requirements for promotion for the purposes of declaration of validity or invalidity.

With the change brought about by the reform, in order to establish a lack of salary equalization, the question is no longer how to register, but rather the terms, requirements, form of implementation, objectivity, and clarity of the career plans and organized career frameworks.

If a company has a well-structured career plan (or a job and salary framework), instituted internally as a policy or under a collective bargaining agreement, with objective career advancement provisions (by merit or by seniority), this exception may be widely applied to its workers.

Click here to see the other articles in this series

^[1] www.tst.jus.br/estatística (the most recurring subjects in the labor courts)

^[2] “I - For the purposes of the provisions of paragraph 2 of article 461 of the CLT, staff organized in a career framework is only valid when ratified by the Ministry of Labor, therein only excluding this requirement in the case of career frameworks for the entities governed by public law of the direct, semi-autonomous, and foundational administration approved by an administrative act of the competent authority."

Category: Labor and employment

The Labor Reform (Law No. 13,467/17) brought in various changes to labor law, especially from the point of view of collective rights. One of the most significant issues was the interest shown by the legislator in promoting collective autonomy, whereby it established, among other assumptions, prevalence of what is negotiated over what is legislated and a limitation on accrued rights, with the end of the applicability of collective rules after their abrogation, as previously supported by the case law.^[1]

Subject to some legal limitations,^[2] the bargaining power of trade unions and companies was increased, allowing them to adapt the measures negotiated to the factual context of the activities performed. With these changes, normative provisions that were historically settled and which no longer had the practical effect of serving the purpose for which they were originally intended may be revised by the parties and thereby adapt negotiations to the current scenario of the economic category involved.

This was what happened in the case of the bonuses for bank employees submitted to the differentiated trust established in paragraph 2 of article 224 of the CLT.^[3]

The labor law establishes a six-hour work day for bank employees. It may be increased to eight hours in cases where employees hold positions with differentiated trust, but this increase is conditioned on the payment of a bonus corresponding to at least 1/3 of the salary of the actual position.

Historically, collective bargaining agreements applied to bank employees established bonuses far above the legal minimum. Since 1987, all collective bargaining agreements applicable to bank employees have established that the percentage of the bonus should be 55%. The only exception is the State of Rio Grande do Sul, which establishes the percentage of 50%.

It so happens that the characteristics of banking activity over the last decades have changed a lot, mainly due to the high level of computerization of the services provided and the emergence of new models of banking institutions (investment banks, private banking, corporate banking, digital banks, etc.). With this, an analysis of the trust of positions by the Labor Judiciary has become increasingly complex.

However, this modernization is not always observed by the Labor Court, which limits its analysis of positions of trust to the old idea of branch bank employee, very present in the 1980s and 1990s. This behavior ends up leveraging the number of judicial decisions that disqualify a position of a bank employee as a position of trust.

In addition, the case law of the Superior Labor Court (TST), consolidated in Precedent No. 109, further established that, in cases of disqualification in court of a position of a bank employee as one of trust, the amounts received as a bonus could not be offset by the overtime allowed.^[4]

As a consequence, in situations where the Labor Courts did not deem the trust of the position sufficiently proven, the banks were ordered to pay again the 7th and 8th hours worked, regardless of the bonus paid in excess of the amount legally stipulated.

In view of this scenario, considering the enactment of Law No. 13,467/17, the labor unions of banking establishments opted to renegotiate issues related to bonuses in order to resolve the risks arising from the subsequent disqualification by the Judiciary of bank positions as being ones of trust.

By common accord, the union of the employers and the employees' union opted to maintain the bonus at the historically established percentage of 55%. On the other hand, they defined that, if an employee were disqualified from the exception of paragraph 2 of article 224 of the CLT by a judicial decision, the bonus would be deducted/offset with the overtime granted, thus changing the wording of section 11 of the collective bargaining agreement (CCT).^[5]

This change seeks to provide banks with greater legal certainty in order to prevent duplication of the same activity (work in the 7th and 8th hours of the day), which is supported not only by the reforms introduced by Law No. 13,467/17 regarding the prevalence of collective negotiations, as well as by the prohibition on unjust enrichment and the principle of collective autonomy, which have long been protected in our legal system.

The idea of the legislator, by imposing the 1/3 bonus, and of the unions, when negotiating an increase of the bonus to 55% of the salary, was always to compensate the two hours worked daily (beyond the 6th hour) by employees who hold a position with special trust.

Despite the determination in the collective agreement that the aforementioned offset is only possible for labor suits filed after December 1, 2018, it seems reasonable to us that it is also valid for suits filed before that date, precisely because of the intent of the legislator and the negotiations to impose a bonus that would compensate the two hours worked after the 6th hour in the workday. Moreover, of course, there was never any rule prohibiting such offsetting, but only a jurisprudential construction on the subject.

In this sense, with the new normative provision, it is expected that TST Precedent 109 will fall into disuse and will be subsequently canceled. This is because the Labor Reform also aimed to reduce intervention and activism on the part of the Labor Courts, limiting them to reviewing the collective instruments in order to verify the elements of validity of the legal transaction, in terms of article 104 of the Civil Code, therein establishing the principle of minimum intervention of the Judiciary in the autonomy of the collective will.

The expectation is to reduce labor suits on the subject, since double compensation (overtime + additional pay) ended up stimulating claims that were, in our opinion, mistaken. As a result, the banking industry's labor related provision will also decrease.

^[1] Precedent No. 277, TST - Collective bargaining agreement or collective labor convention. Effectiveness. Applicability after Abrogation (wording amended in a hearing of the Court en banc held on September 14, 2012), a Precedent whose application is suspended pursuant to the terms of an injunction granted in the record of STF-ADPF No. 323/DF, Opinion drafted by Justice Gilmar Mendes - Res. 185/2012, made available in the State Labor Court Gazette (DEJT) on September 25, 26, and 27, 2012.

The normative provisions of collective bargaining agreements or collective labor conventions are part of individual labor contracts and may only be modified or eliminated through collective bargaining.

^[2] See Article 611-B of the Consolidated Labor Laws (CLT).

^[3] Paragraph 2. The provisions of this article do not apply to those who exercise positions of direction, management, oversight, supervision, and the like, or that exercise other positions of trust, provided that the amount of the bonus is not less than one third of the salary of the actual position.

^[4] Precedent No. 109 of the TST

Bonus for position (maintained) - Res. 121/2003, Published in the Official Gazette of the Judiciary on November 19, 20, and 21, 2003.

Bank employees not fitting within paragraph 2 of article 224 of the CLT that receives a bonus cannot have the overtime wages offset by the value of that bonus.

^[5] Section 11: bonuses

The value of the bonus dealt with in paragraph 2 of article 224 of the CLT shall be supplemented for those in administrative and technical/scientific careers, provided that the respective amount does not reach the equivalent of 55% of the value of the VP of A1 + employee monthly bonus (VCP of the ATS). For those occupying positions to be extinguished in the career of Auxiliary Services the initial VP of that career shall be observed.

Paragraph one. If there is a judicial decision that declassifies the employee from the exception provided for in paragraph 2 of article 224 of the CLT, who is receiving or has already received the bonus, which is the consideration for the work performed beyond the sixth (6th) hour per day, so that work is only considered overtime after the eighth (8th) hour worked, the amount owed relative to overtime and related payments shall be fully deducted/offset, with the value of the bonus and related payments paid to the employee. The deduction/offset provided for in this paragraph shall be applicable to the suits filed as of December 1, 2018.

Paragraph two. The deduction/offset provided for in the paragraph above shall comply with the following requirements, simultaneously:

It shall be limited to the months in question in which overtime has been granted and in which the bonus payment provided for in this section has been paid; and,

The amount to be deducted/offset may not be higher than the amount earned by the employee, such that there can be no negative balance."