What did the TST decide and why does it matter?
The recent decision of the Superior Labor Court (TST), in case RRAg 367-98.2023.5.17.0008, reaffirms an important understanding for the business community: the fine stipulated in article 477, §8, of the CLT (Consolidation of Labor Laws) also applies in cases of indirect termination recognized in court. This means that, even when the employee resorts to the Judiciary to obtain indirect termination, the employer remains obligated to pay the severance pay within the legal deadline, under penalty of a fine.
When is the fine stipulated in article 477, §8, due in the case of indirect termination?
The impact of this decision is significant for companies, since indirect termination is often discussed in lengthy processes, and there is a misconception that the payment deadline only begins after the final decision. The TST (Superior Labor Court), however, reinforces that the obligation to comply with the legal deadline remains and that any non-compliance will result in penalties. In practical terms, this increases the financial risk for the employer, who may be ordered not only to pay severance pay but also a fine equivalent to one month's salary, according to article 477 of the CLT (Consolidation of Labor Laws).
10-day deadline and financial risks
From a legal standpoint, the adopted rationale is that the nature of the penalty is not linked to the type of contract termination, but to the failure to meet the payment deadline. Thus, whether in a dismissal without just cause, resignation, or constructive dismissal, if payment does not occur within 10 days of the decision recognizing the termination of the contract, the fine is due. This interpretation seeks to protect the worker against delays that jeopardize their livelihood during the job transition period.
For companies, the risk goes beyond the financial aspect. Non-compliance can generate reputational repercussions, especially in sectors with strong public exposure or that value labor compliance practices. Furthermore, decisions like this reinforce the jurisprudential trend of holding employers more rigorously liable for delays, even when the dispute over the employment relationship or the reason for termination is legitimate.
Best practices to prevent constructive dismissal and penalties.
In this scenario, prevention involves agile and well-advised labor management. It is essential that managers and HR departments closely monitor legal proceedings involving requests for constructive dismissal and adopt measures to ensure that, as soon as a court decision is reached, payments are made within the legal timeframe. This requires integration between the legal and financial departments, guaranteeing the immediate availability of funds and avoiding additional penalties.
Furthermore, internal conflict prevention policies, such as effective ombudsman channels, leadership training, and attention to signs of contractual non-compliance, can significantly reduce the risk of indirect terminations, avoiding litigation and the resulting costs.
Our firm has a team specializing in Business Labor Law, prepared to advise companies on the preventive management of liabilities, strategic handling of litigation, and adaptation of internal practices, avoiding fines and losses. Contact us and discover how we can protect your business with agile and effective legal solutions.