Judge annuls TAC (Conduct Adjustment Agreement) and fines imposed on the industry that outsourced core activities
Similar to what happens in the criminal scope, more favorable labor laws retroactively extinguish liability. Therefore, a fine imposed and not paid becomes unenforceable if a subsequently enacted law authorizes the practice that led to the penalty.
A piston manufacturing company had to sign a TAC after outsourcing its core activity.
By such understanding, judge Carlos Alberto Frigieri from the 3rd Labor Court of Araraquara (SP) annulled a TAC signed by an automotive parts company that had outsourced its core activity, thus extinguishing a fine of approximately BRL 2 million resulting from such agreement.
The company, which manufactures engine pistons, entered into a TAC with the local Labor Public Prosecutor’s Office in 2007, in which it committed not to engage any other company or individual to carry out its core activity unlawfully. According to the Agreement, the company also had to hire its employees, conclusively proving the end of service outsourcing. The manufacturer claimed to have complied with the agreement, but argued that the Labor Public Prosecutor’s Office still enforced a fine.
As the company considered to be aggrieved by the collection, it took legal action. In its defense, it argued that the TAC, which dealt with unlawful outsourcing, had lost its purpose after the amendment made by Law 13429/2017 (labor reform), which allowed outsourcing of any stage of the business production chain. Therefore, it requested the annulment of the Agreement and, consequently, the cancellation of the fine.
The Labor Public Prosecutor’s Office, on the other hand, requested the claim to be dismissed, arguing that the Agreement has been executed without any vices and that its execution prevented a class-action lawsuit from being filed, which would have been even worse for the company given what was observed by labor inspectors.
In charge of hearing the case, judge Carlos Frigieri sided with the company. He stated that a TAC is “neither eternal nor unchangeable” and that if a new law legitimizes conduct previously considered unlawful, “the agreement can be revised.” To support such understanding, he quoted precedents from the São Paulo State Court of Appeals (TJ-SP) and the Superior Labor Court authorizing the annulment of TACs based on legislative renewals.
Therefore, the judge concluded that a “supervening fact justifies the termination of the TAC.” Finally, he reminded that the Brazilian Supreme Federal Court has already declared that outsourcing work between distinct legal entities is lawful, regardless of the corporate purpose of the companies involved.
“Thus, considering that the TAC dated Feb. 2, 2007, entered into by the petitioner before the Labor Public Prosecutor’s Office, now respondent, was adjusted within a certain legal framework (…) that not only no longer exists, but has also completely changed,” the judge concluded, declaring the nullity of the TAC and extinguishing the fine arising therefrom.
Lawyers Rodrigo Macedo and Caio Madureira acted on behalf of the company in this case.