The Specialized Subsection 1 for Individual Labor Disputes (SDI-1) of the Superior Labor Court (TST) established a relevant understanding regarding the application of the voluntary jurisdiction institute. The decision determines that extrajudicial agreements signed between employer and employee must be analyzed in their entirety, prohibiting the partial ratification of their clauses.

Introduced by the 2017 Labor Reform, the procedure for ratifying extrajudicial agreements (articles 855-B et seq. of the CLT) allows the parties, who must be assisted by separate lawyers, to submit a prior agreement to the Labor Court for the settlement of obligations arising from the employment relationship.

The core of the discussion brought to the SDI-1 (Specialized Section for Individual Disputes) resided in the possibility of the judge approving the agreement, but excluding specific clauses — generally the one for full and general settlement of the employment contract — under the argument of preserving the worker's rights.

The Superior Court's decision, issued in case no. 1000101-98.2018.5.02.0069, is based on the following technical points:

• Autonomy of the Will: The Superior Labor Court (TST) understood that, in the absence of fraud or vitiation of consent, the Judiciary should not interfere in the economic balance of the transaction. A general release is sometimes the essential counterpart that motivates the company to offer benefits beyond the legal minimum.
• Limits of Judicial Intervention: In voluntary jurisdiction, the magistrate's role is to control legality (analyzing fraud, coercion, or violation of public order norms, such as those related to FGTS [Brazilian severance pay fund] and Social Security). If there is no illegality, the judge must approve the agreement as stipulated or reject it entirely.
• Efficiency and Safety: Partial approval created a scenario of legal uncertainty, as the company fulfilled the agreed payment without obtaining full settlement, which distorted the purpose of the institution.

With this guidance, out-of-court settlements offer greater predictability. For the employer, there is a guarantee that the negotiated amount will definitively settle the labor liability in question. For the employee, assisted by their own lawyer, it ensures that the negotiated conditions and additional benefits (such as health plan extensions or severance bonuses) will not be unilaterally altered at the time of ratification.