By Rafael Mello and Israel Cruz

The Brazilian Supreme Court (STF), in which the majority of ministers determined that labor compensation for moral damages may exceed the limit established in the Consolidation of Labor Laws (CLT). The prevailing interpretation was that the amounts determined by the legislation serve as a guide, and not as an absolute maximum amount.

The judgment was given due to the filing of Direct Actions of Unconstitutionality (ADIns) by the Association of Labor Court Judges, the Federal Council of the OAB and the National Confederation of Industrial Workers.

Rapporteur Minister Gilmar Mendes voted in favor of the merits of the ADIns, arguing that the criteria for calculating compensation established by article 223-G of the CLT should guide labor judges in the justification of their decisions, and are therefore not entirely unconstitutional.

Furthermore, Minister Gilmar Mendes argued that the judge should not be just an executor of the rule.

In the decision, Mendes stated that "The criteria for quantifying compensation for non-pecuniary damages provided for in art. 223-G, caput and §1, of the CLT must be observed by the judge as guiding criteria for the justification of the judicial decision. However, the judicial arbitration of damages in amounts higher than the maximum limits set forth in items I to IV of §1 of art. 223-G is constitutional, when considering the circumstances of the specific case and the principles of reasonableness, proportionality and equality."

When evaluating articles 223-A and 223-B of the CLT, which establish that individuals or legal entities have the right to compensation, Gilmar Mendes decided that in employment relationships there may be a right to compensation for indirect or consequential moral damages, related to third parties (such as the loss of relatives), in accordance with civil legislation.

Gilmar Mendes was accompanied by ministers Alexandre de Moraes, Dias Toffoli, Cármen Lúcia, Luiz Fux, Roberto Barroso, André Mendonça and Nunes Marques, resulting in a score of 8x2 for the actions to proceed.