By Israel Cruz, Najla Mitre and Leticia Neves

With the entry into force of Law 1,3467/2017, employees and employers now have a faster and more reliable device to solve their problems, since with the inclusion of paragraph “f” of article 652 of the CLT will be the responsibility of the Labor Courts “decide on the approval of an out-of-court agreement in matters within the jurisdiction of the Labor Court.”

In view of this, several employees and employers who understood the need to reach an agreement as an alternative way to resolve potential lawsuits obtained a new device that gives them legal security to end their employment contract with the approval of the Labor Court.

The judiciary's reception of the issue, at first, was that the agreement could settle the amounts declared in the agreement, but said agreement would not cover the other amounts and, as a logical consequence, could not discharge the employment contract, which means, in simple terms, that the employee could file a new Labor Complaint seeking the amounts not included in the agreed agreement.

However, as the matter matured before the Regional Court of the 2nd Region, this understanding was changed to the effect that if there was no suspicion of fraud or defect of consent, the agreement made could grant the discharge of the contract. In this way, the execution of the agreement also becomes advantageous for the companies, since it granted the aforementioned discharge to the employment contract; the Claimant will no longer be able to sue his former employer.

It should be clarified that in order to reach an out-of-court settlement, the parties must be represented by different lawyers.

In a recent news story published on the Valor Econômico website, it was reported that the rate of approval of out-of-court settlements is close to 80%, based on data provided by the Superior Labor Court (TST).

It is clear that this means of conflict resolution appears to promote the much desired legal certainty and tends to gain strength, especially in cases involving employment relationships between professionals with high-ranking positions or who occupied management positions.