The injunction granted by Justice Gilmar Mendes of the Brazilian Supreme Federal Court, under Case Topic 1,389, which suspended all proceedings nationwide regarding the legality of hiring individuals through legal entities (a practice commonly known in Brazil for hiring workers as legal entities, instead of employees with a signed employment contract, to avoid labor and social security charges), aimed to prevent conflicting rulings on whether such service contracts are valid or not.
However, the absence of clear guidelines and the lack of consensus among Ministers have left companies and lower courts adrift, facing conflicting interpretations with each new complaint reviewed by the Court.
This injunction, issued under Topic 1,389, was intended to contain the proliferation of court decisions disregarding legitimate service contracts, especially in sectors such as healthcare, law, media, and entertainment. It also sought to reaffirm precedents previously set by the Supreme Court in Theme 725 and Constitutional Claim 324. However, the attempt at standardization ran into internal disagreements within the Supreme Court, with no definition as to whether the suspension only applies to pending cases or also to those already sentenced.
Even with the injunction in effect, some judges have continued to pursue cases, recognizing employment relationships in formally valid contracts, based on alleged fraud of labor laws, and leading companies to adopt additional measures, such as filing Writs of Mandamus and Complaints with the Supreme Court itself.
The result has been a multiplication of divergent rulings, even within regional courts, intensifying legal unpredictability for both employers and workers. In addition to the direct legal risk, there remains the possibility of increased labor liabilities, exacerbated by monetary corrections for future convictions if the case is delayed in reaching a judgment. Therefore, the legal risk remains real, directly affecting the identification of labor liabilities and safe strategic planning.
The Supreme Court has scheduled a public hearing for September to discuss the economic and social impacts of hiring individuals through legal entities. Until then, and until a definitive decision is made, the scenario will remain unstable and subject to changes capable of directly affecting business operations.
Therefore, even in this uncertain scenario, it is essential that companies invest in:
1. Thorough review of contracts, business structures, workflows, and compliance practices;
2. Mapping of potential labor and social security risks;
3. Careful formalization of employment relationships.
Legally shielding flows and preparing to react quickly to changes in understanding is not only recommended, it is a vital strategy to ensure continuity and competitiveness in the current regulatory environment.
