Superior Labor Court Pivots, Authorizing Salary Deductions in Cases of Negative Compensatory Time

In March, the Second Chamber of the Brazilian Superior Labor Court has changed its position on the matter following a trial, upholding the validity of a collective labor agreement clause authorizing employers to make deductions from employees’ salaries in cases of negative compensatory time, where more compensatory time has been used than an employee has accrued.

Historical Position

Historically, the Superior Labor Court would strike down clauses in collective labor agreements that authorized deductions from employees' salaries in cases of negative compensatory time.

The decisions were usually made on the grounds that, given the absence of explicit legal authorization and the impossibility of transferring economic risk to the worker, it was the employer's responsibility to set working hours for its employees.

Change in Understanding

In June 2022, the Supreme Federal Court, during the judgment of ARE No. 1.121.633, under the regime of General Repercussion (Theme 1046), ruled on the matter, stating: “collective agreements and conventions that, considering the negotiated sectoral adequacy, establish limitations or waivers of labor rights are constitutional, regardless of the specified explicit compensation advantages, provided that absolutely non-disposable rights are respected,” thereby granting more legal certainty to collective bargaining.

Based on this decision, the Second Chamber of the Superior Labor Court upheld the decision of the Labor Court of Appeals, filed in the records of a public civil action, through which the Labor Public Prosecutor's Office sought to have a clause struck from a collective labor agreement, which authorized the employer to make deductions from the salaries of its employees in cases of negative compensatory time.

In its decision, the Second Chamber highlighted that the case did not involve non-negotiable rights, and that the establishment of compensatory time—with the possibility of deducting unjustifiably unworked time—is compatible with the Federal Constitution. Therefore, in light of the binding opinion of the Supreme Federal Court, it held that the validity of the collective bargaining must be recognized.

Conclusion

The decision of the Superior Labor Court reflects the trend within the Labor Justice to respect Supreme Federal Court’s position regarding the primacy of collective labor negotiations over legislation, as long as the constitutional limits and restrictions imposed by Article 611-B of the Brazilian Labor Code are respected.

That is indeed good news, as it reinforces the security of collective bargaining in the labor sphere, which can bring a certain level of flexibility and adaptability for both employers and employees.

However, it remains essential to seek qualified legal guidance for the proper analysis and interpretation of terms when negotiating with labor unions.

The Employment & Benefits team at Tauil & Chequer Advogados in association with Mayer Brown is available to clarify any doubts related to this issue.