Superior Labor Court's Precedent (TST) Change The Direction Of The Collective Bargaining Agreements

Recently, the Judges of the Superior Labor Court ("TST") met to review some controversial legal understandings. Among the discussed matters, the possibility that the benefits set forth in collective bargaining agreements could remain effective even after the validity period of the collective instruments has expired.

In accordance with the majority opinion of the TST until then, expressed in Precedent No. 277, the benefits set forth in collective bargaining agreements and normative rulings would definitely not extend to the work contracts of employees. This means that after the end of the validity period of the collective instruments the benefits and conditions set forth therein would not be due any longer, and the parties would have to negotiate a new collective bargaining agreement.

However, with the review of Precedent No. 277, the TST substantially changed the understanding it followed until then, setting forth that the normative clauses of the collective bargaining agreements are part of the individual work contracts and could only be modified or suppressed by means of collective bargaining.

From now one, therefore, the benefits previously negotiated shall, in the event companies or their trade associations and the labor unions cannot reach an agreement to install a new collective bargaining agreement, remain valid until a new agreement substitutes the previous one, expressly amending the previously agreed conditions.

Already based on such understanding, the TST published, on December 3, 2012, a decision that determined the payment of shared profits and revenues for some retired employees of Telemar (nowadays Brasil Telecom) as set forth in a Collective Bargaining Agreement negotiated in 1969 the content of which was not suppressed or amended in the later bargaining agreements.

Such decision shows the tendency of the TST to exclude the normative power of the Labor Justice of interfering in the collective bargaining in the cases in which a collective labor dispute is filed and will grant the parties freedom to covenant future collective bargaining agreements.

A similar understanding is also found in the judgment of the collective labor dispute of a strike filed before the Regional Labor Court of São Paulo involving the National Trade...