News_Trabalhista_Arbitration_Brazilian employment contract

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THE RISKS AND ADVANTAGES OF THE ARBITRATION IN THE TERMINATION OF
BRAZILIAN EMPLOYMENT CONTRACT
Luiz Fernando Alouche
[email protected]
Nowadays, the number of companies
turning to arbitration as an alternative
resolution method to solve labor conflicts
is growing substantially.
The possibility of using arbitration to solve
conflicts was made possible under Law
number 9.307 of 1996, popularly known as
Arbitration Law.
Since then, this practice has grown in
several areas of law, most notably after
2001 when the Supreme Federal Court
(STF) judged the Arbitration Law
constitutional, validating its application
nationwide. However, the use of arbitration
in the labor area, particularly for individual
employment contracts is still under dispute
as to their legal certainty.
This is due to the fact that the Arbitration
Law states that the only subject for
negotiation under arbitration methods are
disposable equity rights. Thus, by this
understanding, many judgments have
understood that workers' rights are not
disposable and therefore not subject to
arbitration.
Until now, this understanding had only
been formalized in decisions given by first
instance judges or by the Regional Labor
Court, on appeal level. However, on
October 21st, 2008, the Superior Labor
Court, the highest body in labor sphere,
held as valid the ratification of the
termination of an individual employment
contract by an Arbitration expert.
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In that understanding, it was concluded
that the arbitration proceedings related to
the individual employment contracts may
be valid and effective if there is no error in
the decision given by the Arbitration
Judge.
This understanding validates the use of
arbitration in labor disputes, which, in
addition to providing benefits to companies
with its fast and low cost solution, it could
also be the answer for the relieving of the
thousands of cases currently in the
Judicial System.
However, despite the current positive
wave of acceptance of Arbitration as
means of solving conflicts arising from the
employment contract, it is important to
emphasize that this method still offers the
risk of being deemed invalid by the courts.
This is because the decision of the
Superior Labor Court is isolated and
applies to a precise case and does not rely
on specific and general understanding of
the subject.
Thus, the validity of labor arbitration
remains uncertain as a result of several
actions brought by the Public Ministry of
Labor against the Arbitration Councils that
apply such procedures for the resolution of
labor disputes.
For that matter, despite the fact that
arbitration is being a method increasingly
targeted by companies, it lacks the
necessary legal certainty, due to the
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30150-331 Belo Horizonte | MG
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Natal | Brasil
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DIREITO CORPORATIVO
São Paulo | Brasil
Av. Brigadeiro Faria Lima, 1461 - 16° andar – Torre Sul
01452-002 São Paulo | SP
Tel.: +55 (11) 2714-6900 Fax: +55 (11) 2714-6901
São Paulo
Rio de Janeiro
Belo Horizonte
Natal
www.almeidalaw.com.br
constant and common annulments by the
Labor Court decisions made by an Arbitral
Judges.
The labor sector of Almeida Advogados’s
team does not only has extensive
experience in analyzing and assisting
companies to adopt arbitration procedure,
but also on defending companies which
are a part of an employment dispute in the
judicial, administrative or arbitrational
sphere, a such remaining at your disposal
for any clarification or assistance on the
subject.
Rio de Janeiro | Brasil
Av. Rio Branco, 14 - 10º andar
20090-000 Rio de Janeiro | RJ
Tel.: +55 (21) 2223-1504 Fax: +55 (21) 2223-1504
Belo Horizonte | Brasil
R. Maranhão, 1694 - 3º andar
30150-331 Belo Horizonte | MG
Tel.: +55 (31) 3227-5566 Fax: +55 (31) 3227-3669
Natal | Brasil
R. Paulo Barros de Góes, 1840 – cj. 1301
59064-460 Natal | RN
Tel.: +55 (84) 3206-1278 Fax: +55 (84) 3606-0778