Compensation for unfair dismissal - free determination by court:
Compensation for unfair dismissal - Are there legal limits?:
Compensation for unfair dismissal - Legal limits (ceiling in months or calculation method):
- If a just cause is not recognized by the Court, the employee is entitled to compensation for dismissal without cause = 40% of the total amount deposited in the FGTS ("Fundo de Garantia por Tempo de Serviço". This amounts to: 40% x 8% x length of service (in months). This compensation for termination of employment is not payable until one year of employment has been completed.
-Workers under a fixed-term contract who are dismissed without cause are also entitled in addition to the above mentioned amount, to the payment of sum equal to half the remuneration to which he or she would have been entitled on the expiry of the contract.
- See art. 18(1) of the Act No. 8036 of 11 May 1990, consolidated version and art. 478 CLL.
Compensation follows different rules in the following situations.
- For those workers who had acquired the right of security of tenure after ten years of service before the adoption of the 1988 Constitution (= those hired before 1978), the job security provisions of the CLL are still applicable. Dismissals are prohibited except on account of a serious offence or force majeure (art. 492 CLL). If none of those grounds are proved, the employer shall reinstate the employee or be ordered by the labour court to pay compensation in lieu of reinstatement equivalent to 2 month's salary per year of service (art. 495-497 CLL).
- Workers who had less than 10 years of service when the constitution was adopted (= those workers hired between 79 and 88) under a contract of indeterminate duration and who did not opt for the FGTS system prior to October 1988 still remain governed by the severance pay provision of the CLL. They are entitled to 1 months' for each year of actual service or any fraction of a year exceeding six months in the event of cancellation of the contract (termination at will). This means that in the event the court does not acknowledge a just cause for dismissal (disciplinary dismissal), the court will order the employer to pay such severance payment to the dismissed employee (art. 477, 478 and 497 CLL, and art. 14(1), Act No. 8036 of 1990).
Compensation through the FGTS system is usually the only remedy for unfair dismissal.
However reinstatement is available in the following situation:
* Dismissal of workers who had acquired the right of security of tenure after ten years of service before the adoption of the 1988 Constitution (= those hired before 1978). If a serious offence is not duly established, they shall be reinstated or be awarded compensation if the Court declares that reinstatement is not advisable (art. 495 CLL).
* The same rules apply to those categories of employees enjoying job stability (i.e. pregnant women, member of a trade union board and workers' representatives on the Internal Accident Prevention Commission (CIPA)). If serious reasons for dismissal are not recognized by the Labour Court, they have the right to be reinstated.
Preliminary mandatory conciliation:
Art 764 CLL: All labour disputes, whether individual or collective, which are referred to a labor court shall be submitted to conciliation proceedings before the labour judges.
Competent court(s) / tribunal(s):
Art. 643-645 CLL: disputes arising out of labour and employment relations between employers and workers should be settled by the labour courts. The Superior Labour Court, Regional Labour Courts and Labour Courts of first instance or the courts of ordinary jurisdiction have jurisdiction.
- The competence of Labour Courts was amplified by the Constitutional Amend No 45/2004. In localities which do not fall within the jurisdiction of the conciliation and arbitration boards, the judges of ordinary jurisdiction shall be responsible for the administration of justice in labour matters (art. 668 and 669 CLL).
The competence of Labour Courts was amplified by the Constitutional Amend No 45/2004.
Length of procedure:
The Superior Labour Tribunal provides statistics on average duration of labour procedures in Brazil (http://www.tst.jus.br/web/estatistica/jt/prazos).
Burden of Proof:
Art. 818 of CLL provides that the burden of proof is on:
I - the claimant, as to the constitutive fact of its right;
II - to the defendant, as to the existence of an impediment, modification or extinction of the claimant's right.