University of São Paulo: Judgment of the STF on unfair dismissal should not affect employee rights

The Federal Supreme Court is due to judge, still in the first half of the year, Convention nº 158 of the International Labor Organization (ILO), which decides on the Termination of the Employment Relationship by Initiative of the Employer . For years in the Court , the judgment of a Direct Action of Unconstitutionality (ADI 1625) on the decree, signed by Fernando Henrique Cardoso, former President of the Republic, canceling the convention should now be resumed.

The ILO Convention is an international treaty that, unlike others signed by the head of state – in our case, the president – ​​is approved by ILO conferences, which meet annually in Geneva. Brazil is one of the founding members of the organization and has participated since the first meeting. These decisions, when ratified, become part of the legal system of a country.

The International Labor Organization was created in 1919 and aims to promote social justice. As part of the Treaty of Versailles, which ended the First World War, the creation of the organization was established. Since then, 189 International Labor Conventions have been adopted.

The one being judged by the STF was approved in 1992. For this, the National Congress had to ratify it, that is, the convention went through a legislative process through which that House approved it and introduced it into the Brazilian legal system. On April 10, 1996 , it was promulgated by FHC. On December 20, through a decision of the President, it was terminated and cancelled.

It is exactly the validity of the act of denunciation that is in dispute, since it was a unilateral act and not a decision sanctioned by the National Congress. If it is declared invalid, the matter will be submitted again to the National Congress. “It’s a formal discussion, but one with very relevant symbolic and political consequences”, explains Antonio Rodrigues de Freitas, from the Department of Labor Law and Social Security at the Faculty of Law at USP.

Misunderstanding
“I have the impression that it was a set of misinterpretations by the President of the Republic at the time and also misguided judicial decisions”, explains the professor. Unlike other conventions at the time, 158 does not guarantee employee stability in the company, nor does it prohibit dismissal other than for disciplinary offenses. What it effectively prohibits is dismissal without just cause, without any reason.

This right is already foreseen by the Constitution, recalls the professor. Article 7, item I , ensures the “ employment relationship protected against arbitrary dismissal or without just cause, under the terms of a complementary law, which will provide for compensatory indemnity, among other rights”. The central issue of unfair dismissal is that any dismissal does not only affect the employee, but civil society as a whole, since it bears the costs of unemployment. There are, therefore, direct consequences – which affect the unemployed person – and indirect ones – such as society having to pay unemployment insurance. This decision has social and political repercussions that go beyond the employee-employer relationship.

Antonio Rodrigues also points out that the Judiciary ended up giving this convention a rigidity that it did not have, which caused a harsh response from the business community. Former President Fernando Henrique Cardoso’s decision to cancel Convention No. 158 was therefore based on a misunderstanding and pressure from society. “What made the president end up taking this decision that, at the same time, was wrong from a legal point of view and from a political point of view, but was absolutely understandable in that political scenario of 1996”, he adds.

What will change?
The judgment concerns the Direct Action of Unconstitutionality and another action, which affirms the constitutionality, promoted by business organizations. Its result, however, does not directly impact the configuration of employee rights beyond those that already exist.

“The result of this decision will not directly imply the configuration of any right for the employee beyond what already exists and, unfortunately, in Brazil, dismissal is still largely practiced in an unmotivated way”, says the professor. He also points out that a type of dismissal is practiced that is only close to that practiced in the USA, the at-will employment : the possibility of the employer to dismiss an employee for any reason and without prior notice.

“We should move towards an improvement in this type of bond termination that we have in Brazil”, he says. For Rodrigues, a model close to the ideal that could be implemented here is that of Continental Western Europe and the United Kingdom, in which just cause is necessary – ranging from behavioral reasons to business, economic conditions and technological changes – and reason for the resignation.

The important thing is that there is no absolute rigidity or general freedom of dismissal, which is very common in Brazil. “Dismissal is acceptable provided there is reasonable reason for doing so. This reason needs to be brought to the attention of the employee and eventually submitted to the Judiciary”, he concludes.