Profit sharing: overcoming TST (Superior Labor Court) Precedent 451
Rodrigo Souza Macedo is a labor relations specialist and partner at Tortoro, Madureira e Ragazzi Advogados.
Currently this is perhaps one of the most delicate issues in the field of labor law, since it involves an old debate about private collective autonomy and the guarantee of recognition of collective bargaining agreements as instruments of self-composition and pacification of labor conflicts (article 7, XXVI, of the Federal Constitution).
The Profit Sharing (PLR) is based on article 7, XI, of the Federal Constitution and on the Law 10.101/200, It can be defined as an instrument of integration between capital and labor with incentive to productivity, whose rules must necessarily be the object of negotiation between the company and its employees through the constitution of a joint committee chosen by the parties, also composed of a representative appointed by the labor union of the respective category, or by means of a collective bargaining agreement.
This collective instrument must contain clear and objective rules regarding the establishment of the substantive rights of the profit sharing, including mechanisms for measuring the information relevant to the fulfillment of the agreement, periodicity of distribution, period of validity, and deadlines for reviewing the agreement.
The Profit Sharing, therefore, has a constitutional provision in a norm of limited effectiveness, whose regulation given by Law 10.101/2000 granted to the parties (employers and employees) the right to jointly create rules to discipline the program, which includes, evidently, the definition of eligibility criteria of the employees to receive the installment.
Because it transcends the field of the so-called “minimum civilizational threshold” of workers, the Profit sharing’s eligibility criteria may be freely agreed upon by the parties involved, reaching from the temporal aspects of the work contract for the purposes of receiving the benefit to the modalities of termination of the labor pact that may limit this right, without jeopardizing its validity.
However, despite the fact that the infra-constitutional legislation has reaffirmed the supremacy of collective bargaining agreements that provide for Profit sharing (article 611-A, XV, of the CLT), and expressly bind the Labor Courts to examine the essential elements of the legal business (capable agent, lawful object, possible, determined or determinable and manner prescribed or not defended by law), the judges and courts, supported by the understanding contained in the anachronistic Precedent 451 of the TST, invalidate the normative clauses that limit the right of access to Profit sharing, in clear and flagrant violation of articles 8, § 3 and 611-A, § 1, both of the CLT (Brazilian Consolidation of Labor Laws). This is the content of the precedent statement:
“TST Precedent No. 451- PROFIT SHARING. CONTRACT TERMINATION PRIOR TO THE DATE OF DISTRIBUTION OF PROFITS. PAYMENT PROPORTIONAL TO THE MONTHS WORKED. PRINCIPLE OF ISONOMY (conversion of Jurisprudential Guidance No. 390 of SBDI-1 (Subsection I Specialized in Individual Labor Disputes))- Resolution 194/2014, DEJT (Electronic Gazette of Labor Justice) disclosed on May 21, 22 and 23, 2014. It violates the principle of isonomy to institute an advantage by means of a collective bargaining agreement or regulatory rule that conditions the perception of the profit sharing installment to the fact that the work contract is in force on the date foreseen for the distribution of profits. Thus, even in the early termination of the contract, the payment of the installment proportional to the months worked is due, because the ex-employee contributed to the positive results of the company”.
Now, if the substantive law and the adjective rules of the Profit sharing can be freely agreed upon by the parties, and the principle of isonomy is translated into the idea of treating equally those who are equal and unequally those who are unequal exactly according to their inequalities, there is no way to legally sustain the practice of an anti-isonomic act when the parties, through collective bargaining, institute an advantage but condition its perception to the fact that the work contract is in force on the date foreseen for the distribution of profits.
One could discuss the practice of a discriminatory act or the existence of an obstructive dismissal if the employer dismisses its employees on a date close to the distribution of profits with the intention of depriving them of receiving the Profit Sharing. However, excluding the validity of normative clauses originated from the free exercise of collective private autonomy, under the false pretext that its wording contemplates an anti-isonomic treatment among workers, besides being illegal, is flagrantly unconstitutional.
The Federal Supreme Court, in fact, has already ruled a few times on the need to fully respect collective bargaining agreements, as can be seen in the excerpts below:
“LABOR LAW. COLLECTIVE BARGAINING AGREEMENT. INCENTIVE DISMISSAL PLAN. VALIDITY AND EFFECTS. 1) Incentive dismissal plan approved by collective bargaining agreement with broad participation of the employees. It provides benefits to the workers, as well as discharge of any and all amounts arising from the employment relations. The employee’s option to choose or not the plan. 2) Validity of the broad dismissal. In this case, article 477, § 2nd , of the Consolidation of Labor Laws does not apply, which restricts the release effectiveness of the discharge to the amounts and installments listed in the termination instrument exclusively. 3) In the scope of collective labor law, the same power asymmetry situation present in individual labor relations is not verified. As a consequence, collective autonomy of will is not subject to the same limits as individual autonomy. 4) The 1988 Constitution, in its article 7, XXVI, gave prestige to collective autonomy of will and to the self-composition of labor conflicts, following the world tendency to the growing recognition of collective bargaining mechanisms, portrayed in Convention no. 98/1949 and Convention 154/1981 of the International Labor Organization. The recognition of collective bargaining agreements allows workers to contribute to the formulation of the rules that will govern their own lives. 5) Incentive dismissal plans allow reducing the social repercussions of dismissals, assuring those who opt to leave the company more advantageous economic conditions than those that would result from a mere layoff by decision of the employer. It is important, therefore, to ensure the credibility of such plans, in order to preserve their protective function and not to discourage their use. 7) Granting the extraordinary appeal. Affirmation, in general repercussion, of the following thesis: The out-of-court transaction leading to the termination of the work contract due to the employee’s voluntary adherence to an incentive dismissal plan, gives rise to a broad and unrestricted discharge of all installments object of the work contract, if such condition has been expressly stated in the collective bargaining agreement that approved the plan, as well as in the other instruments entered into with the employee. (Resolution 590.415, Rapporteur Justice Roberto Barroso, Full Court, electronic ruling on general repercussion- merits DJe (Eletronic Justice Gazette) 05.29.2015).
LABOR. REGULATORY APPEAL ON EXTRAORDINARY APPEAL. COLLECTIVE BARGAINING LABOR AGREEMENT. TRANSACTION OF THE CALCULATION OF THE IN ITINERE HOURS IN THE DAILY WORK DAY. GRANTING OF ADVANTAGES OF A PECUNIARY NATURE AND OTHER UTILITIES. VALIDITY. 1) As stated by the Plenary of the Federal Supreme Court in the judgment of Resolution 590.415 ( Rapporteur ROBERTO BARROSO, DJe (Eletronic Justice Gazette) of 05/29/2015, Theme 152), the Federal Constitution recognized collective bargaining agreements as legitimate instruments of prevention and self-composition of labor conflicts, making explicit even the possibility of these instruments for the reduction of labor rights. Also according to this precedent, collective labor rules may prevail over the general heteronomous standard, even if they restrict workers’ rights, provided they do not transact sectorially on absolutely unavailable labor and legal parcels. 2) A collective bargaining agreement whereby a category of workers transacts the right to have in itinere hours computed into the daily work day in exchange for cash benefits and other utilities is valid. 3. Interlocutory appeal denied. Article 85, §11, of the CPC/2015 (Civil Procedural Code) is inapplicable, since there was no prior establishment of attorney’s fees in the case. (Resolution-AgR-second 895.759, Rapporteur Teori Zavascki, Second Panel, DJe (Eletronic Justice Gazette) 5.23.2017)”.
The unconstitutionality of TST Precedent 451 derives from the violation of articles 1, IV, 5, II, 7, XI and 170 of the Federal Constitution.The constitutional principles of free enterprise, free competition and recognition of collective bargaining agreements, whose supremacy is also based on infra-constitutional legislation (articles 8, §2 and §3, 611-A, caput and §1, of the CLT), should prevail in the face of an apparent axiological conflict with the principle of isonomy, notably because the alleged “relativization” of the latter had the consent of the very employees who were beneficiaries of the distribution of profits.
In support of the thesis of unconstitutionality and illegality of the precedent, we must also consider that collective bargaining agreements that establish advantages for workers constitute true legal business benefits, whose clauses freely defined in the instruments must be interpreted restrictively, under the terms of articles 114 of the CC (Civil Code).
In this line of reasoning, based on the assumption that precedents and other pronouncements of jurisprudence issued by the Superior Labor Court and by the Regional Labor Courts are merely persuasive in nature and cannot restrict legally provided rights or create obligations that are not provided for by law, it seems to us that today there are no longer any arguments to support the application of Precedent 451 of the TST, the legislator’s express option to guarantee the prevalence of private collective autonomy and collective bargaining as formal sources of labor law in detriment of heteronomous legislation must prevail.