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Criteria for Recognition of Economic Group: Analysis of Recent TST Decision 

January 3, 2025

In the context of legal relationships prior to the Labor Reform (Law 13,467/2017), the consolidated case law of the Superior Labor Court (TST) highlights that, in order for an economic group to be recognized, it is essential to prove hierarchical subordination between the companies involved, with the demonstration of effective control by a leading company over the others. This premise was used by the 8th Panel of the TST when annulling the decision of the Regional Labor Court of the 2nd Region in case no. 1000380-87.2017.5.02.0047, which had attributed joint and several liability to the companies for configuring an economic group in a labor action. 

The companies appealed, arguing that, according to the TST case law, the mere fact that there are common partners between the companies is not enough to configure an economic group. To do so, evidence is needed that one company exercises hierarchical control over the others. 

When examining the case, the rapporteur, summoned judge José Pedro de Camargo Rodrigues de Souza, noted that the regional court's decision did not present sufficient factual elements to prove the existence of effective control by a leading company over the others. According to the rapporteur, the failure to demonstrate the hierarchy between the companies constitutes a violation of the provisions of article 2, § 2, of the CLT. 

Based on this understanding, the rapporteur voted to dismiss the recognition of the economic group and declared the claim for liability to be unfounded. The vote was unanimous among the members of the 8th Panel of the TST. 

This decision reinforces the importance of respecting the criteria established by labor legislation and the TST case law, particularly with regard to proof of the hierarchy and control of a company over others, as a fundamental requirement for the recognition of an economic group. 

In cases involving issues like this, it is essential to have the appropriate guidance to ensure that all legal aspects are properly analyzed and respected. 

If you have any questions about the impact of this decision on your specific situation or would like more information about the recognition of economic groups and joint and several liability between companies, our team of experts is available to provide the necessary support. 

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