On 09/30/2024, the National Council of Justice (CNJ) unanimously approved Resolution No. 586, through Normative Act 0005870-16.2024.2.00.0000, which regulates the agreement process between employee and employer in the termination of an employment contract, through approval in the Labor Justice system, with full settlement of the contract. In other words, once the agreement is made, the employee can no longer file a labor claim against the employer.

Among the reasons for the proposal is excessive litigation, which makes the cost of the employment relationship uncertain and may discourage necessary investments in the creation of formal jobs. The goal of reducing the number of labor claims is also one of the reasons presented for drafting the Normative Act.

According to the CNJ's "Justice in Numbers" report, cited in the normative act, in the years 2022 and 2023, the Labor Justice system had approximately 5.4 million pending cases.

In this scenario, there is an increasing shift towards finding and consistently using alternative conflict resolution solutions, in conjunction with participatory social action instruments, with the aim of reducing the volume of lawsuits and, consequently, the heavy cost of the judiciary system.

Extrajudicial conflict resolution offers several advantages for companies seeking to resolve disputes efficiently and practically. By choosing this method, companies have the opportunity to preserve relationships, save resources, and avoid often unnecessary strains.

Furthermore, with the entry into force of the Labor Reform, Articles 855-B and following were added to the CLT, which provide for the process of voluntary jurisdiction for the approval of extrajudicial agreements.

Since then, a broad discussion has emerged in the Labor Justice system regarding the possibility of granting full settlement of the employment contract through these agreements. Until now, labor case law has shown significant divergence on this issue, particularly concerning the possibility of the Magistrate partially approving the agreement made between the parties—that is, approving the agreement except for the full settlement clause of the employment contract.

Resolution No. 586 of the CNJ specifically regulates the full settlement of employment contracts, provided certain requirements are met, namely: an express provision for the effect of full settlement of the employment contract; representation of the parties by separate lawyers or by the union; representation by parents, guardians, or legal tutors in the case of workers under 16 years old or incapacitated; and the absence of any defects in consent or legal flaws in the agreements as defined in Articles 138 to 184 of the Civil Code, which cannot be presumed solely due to the employee's vulnerability.

Agreements that do not meet the listed requirements will be limited to settling only the amounts and values expressly stated in the document. The Resolution also expressly prohibits partial approval of the agreements made. In other words, the Magistrate must either approve or disapprove the agreement as a whole, and excluding clauses agreed upon by the parties is not permitted.

However, the regulated settlement does not cover claims related to work accidents or occupational illnesses that are ignored or not specifically referenced in the agreement at the time it is made; claims related to facts or rights about which the parties were unaware at the time of the agreement; claims of parties who were not represented or were substituted in the agreement; and items and amounts expressly reserved.

The judicial approval of the agreement will depend on the voluntary request of the interested parties or their authorized procedural substitutes to the appropriate judicial bodies, including the Judicial Centers for Consensual Dispute Resolution Methods of the Labor Justice (CEJUSC-JT).

During the first six months of validity, the rules provided in the Resolution will only apply to agreements whose total value is equivalent to 40 minimum wages at the time of signing.

Although the Resolution published by the CNJ does not bring significant innovations to what is already provided for in the Labor Legal Framework, it promises to ensure greater security for the parties when entering into an extrajudicial agreement to be approved by the Labor Justice system, as they will have the assurance of the full settlement of the employment contract and the impossibility of partial approval by the Labor Court.

By: Marina da Silveira Pinto
Labor Law | CPDMA Team