A recent decision by the 1st Brazilian Labor Court of Cachoeira do Itapemirim (ES) ruled out the recognition of employment status and ordered the outsourced worker to pay BRL 813k for malicious prosecution and legal fees borne by defeated party.
This decision can still be appealed to the Brazilian Regional Labor Court (2nd Instance), but, in any case, it is a good indication of the new decisions of the Brazilians labor courts on the subject of outsourcing and requests for employment bond.
Decisions like this, although still rare in the Brazilian Labor Court, have increased in recent years, driven by the Labor Reform (2017) and recent decisions by the Brazilian Federal Superior Court (from 2020 to date) on the legality of outsourcing, even if it is a core activity, and lack of employment relationship for self-employed workers, especially when they receive substantial amounts and are aware of the agreements between the parties.
In this case, when analyzing the evidence presented to the Court, the Labor Judge identified that the Claimant is the owner or president/director of companies that provided services to the Defendant in the action, as well as identifying, among other elements, that the worker declared himself to be a businessman, and not employee, in his Income Tax returns.
There was also emphasis on the average remuneration of the service provider, exceeding BRL 130k, which constitutes sufficient evidence that a traditional employment relationship did not occur, but a true commercial relationship. And, for the absence of the right to free justice, which would rule out convictions for succumbing fees.
Therefore, for the Judge, an understanding to the contrary would violate the Brazilian constitutional principles of free enterprise and free competition, and the State cannot impose a single organizational model for companies in labor relations.
This decision helps to strengthen the notion that the Labor Court will no longer accept “legal adventures” from people who are aware of what has been agreed between the parties.
