On 28th and 29th June 2018, on the eve of the beginning of the Federal Supreme Court (“STF”) recess, this Court, by 6 votes to 3, put an end to the controversial compulsory union contribution thereby upholding the changes, to articles 578, 579 and 582 (among others) of the Consolidation of Labor Laws (“CLT”), introduced by the Labour Law Reform (Law No. 13467/17).
Prior to the Labour Law Reform becoming effective, on 11th November 2017, companies were required to deduct from their employees, in March of each year, regardless of their consent, the amount equivalent to 1 (one) day of work per year to trade unions representing the category of employees. Employers, in turn, had to pay the employer union contribution to the trade unions representing the employers, in January of each year, pro-rated to their share capital or gross income.
The Labour Law Reform has significantly changed more than 100 articles in the CLT, in addition to other legal provisions, which have been the subject to judicial security in all instances.
Among the most relevant changes are those to articles 578, 579 and 582 of the CLT, whereby the union contribution (whether due by the employee or by the employer) became optional and any deductions from payroll permitted only with the employee’s prior and express consent.
In recent months, in particular since March of this year (strategically, in order to justify the urgency of the application for early protection of trade unions, given their silence since the enactment of the Law on 13th July 2017, numerous companies have been involved in lawsuits mostly by unions representing employees of the most diverse economic categories, where the deduction of the employee’s contribution was effected without his/her consent on the grounds that the change amendment introduced by the Labour Law Reform would be unconstitutional.
At the same time, dozens of Direct of Unconstitutionality Actions (“ADINs”) were filed with the STF. The judgment held in the morning of 29th June 2018 resulted in the review of 19 ADINs and one Declaratory Action of Constitutionality (“ADC”) on the same topic: the constitutionality of the change introduced by the Labour Law Reform, which transformed the union’s contribution into voluntary.
The proceedings discussed both the nature of the union contribution, deemed by many (and by certain STF Justices) as a tax or public revenue, and also the economic and financial impact of the change to unions and the legislative process of approval of Law No. 13467/ 2017 as a whole.
By a majority of 6 votes (Justices Luiz Fux, Alexandre de Moraes, Luís Roberto Barroso, Gilmar Mendes, Marco Aurélio and Carmen Lúcia) against 3 (Justices Edson Fachin, Rosa Weber and Dias Toffoli), the STF concluded that no union contribution can be imposed on workers and employers when the Federal Constitution itself states that no one is obligated to join or maintain a union affiliation.
The STF also ruled that the end of the obligation of paying the union contribution does not offend the Constitution, either because the unions can rely on other sources of funding, or because it is not a contribution with a tax nature, which would require a different legislative process, impact economic-financial study and a transition rule.
One of the arguments applied by the Justices, which is very favorable to the review of future discussions about the constitutionality of other matters addressed by the Labour Law Reform, is that the discussion is essentially political, not intended to the STF to make such decisions, but rather to the National Congress, the political scenario responsible for the legislative process.
This argument signals the possible direction to be taken by the Justices when reviewing the legislative process that culminated in the enactment of Law No. 13467/2017 and other changes introduced in labor relations by the Labour Law Reform. Several points had their constitutionality questioned (it seems that the next matter to be discussed should be intermittent work, in the next semester), however, Justice Carmen Lúcia, the current president of the Court, has already indicated that the mere absence of a transition is not “sufficient to make the norms enacted incompatible with the Federal Constitution.”
In the coming months, we must face an increase in the harshening of relations between companies and unions, which has already deteriorated since the beginning of the year with the suppression of the payment of of contributions and, much more worryingly, attempts by the union to implement alternative charges to the union contribution as a way of facilitating collective bargaining and/or possible assistance.
A number of unions have established, with the approval of a majority attending a meeting, a mandatory business contribution to all those represented in the category or to all those benefiting from collective bargaining agreements (“ACT”), as a means of coercing workers to authorize the discount of the union contribution. When facing resistance in his regard, they threaten to refuse to participate in collective bargaining and register collective instruments with the Ministry of Labour (under the Mediator System), which makes it impossible to execute ACTs and negotiate specific issues (especially after the introduction of article 611- A into the CLT), and also unfairly announcing to employees that only those who have consented to the union contribution may benefit from the ACTs.
With the STF’s decision, there is an inclination towards the employee’s consent being required for any union contribution deductions being effected, regardless of the name attributed to such payment. However, unions are likely to continue to create alternative forms of contributions that they consider mandatory to support themselves.
Otherwise, unions will take advantage of this opportunity to seek to be even more representative, more efficient and thus more interesting, having in fact representatives, employees and employers will voluntarily seek membership of their respective trade unions, willingly contributing to those who were professionalized, improved and updated to the reality of the new labor relations.