STF declares the unconstitutionality of the principle of ultra-activity for collective labor rules

On May 28, 2022, the virtual judgment of the Claim of Non-compliance with a Constitutional Precept (“ADPF”) 323 was finalized, in which the majority of the Federal Supreme Court (“STF”) voted for the unconstitutionality of Precedent No. 277 of the Superior Labor Court (“TST”), its interpretations and judicial decisions that granted the application of the ultra-activity principle for collective labor agreement rules.

The decision rejects the TST’s position that normative clauses of collective labor agreements are an integral part of individual employment contracts and could only be modified or suppressed through a collective labor bargaining.

Therefore, at the end of the term of a collective labor agreement, the agreed rules lose their effectiveness, and it is not possible to extend their effects over time.

The decision of the STF is in line with Article 614 3 of the Brazilian Consolidated Labor Laws (“CLT”), which prescribes that “the stipulation of the term of a collective labor agreement of more than two years is not allowed, and the principle of ultra-activity is prohibited”, as worded by Law No. 13,467 of 2017, known as the “Labor Reform.”

Demarest’s Labor & Employment team is available to provide any further information about this decision, the Labor Reform, or any other relevant topics in the sector.