Until the beginning of the Law 13.467/2017 - known as the Labor Reform - for a company under judicial reorganization to appeal a judgment or decision before the labor courts, it was required to pay the appeal deposit and procedural costs.

The new legislation, however, now provides that companies under judicial reorganization are exempt from paying the appeal deposit, so that, from then on (i.e., from the granting of the judicial reorganization proceeding), discussions about the dispensability of such deposits must be considered overruled.

A distinct issue, however, is that regarding the destination of the amounts of the appeal deposits made prior to the granting of the judicial reorganization.

The judicial rehabilitation process is a procedure that seeks to restructure a company in crisis by organizing its debts in order to avoid its collapse.

During the course of the labor lawsuit, it is common to see companies going into receivership and requesting that the amounts at the disposal of the labor court be released for use in the receivership plan.

This is because once judicial reorganization processing is granted, the Labor Courts no longer has jurisdiction to perform any acts involving the assets of the reorganized company, including amounts related to appeal deposits made to guarantee the labor court before granting of the judicial reorganization petition.

This is the solidified jurisprudence of the Superior Court of Justice (STJ), and the seventh panel of the Superior Labor Court (TST), reaffirmed the same understanding, in a judgment handed down on 06/10/2022:

"DEFENDANT'S REVIEW APPEAL. LAW NO. 13.467/2017. EXECUTION. RELEASE OF APPEAL DEPOSITS FROM LABOR CREDIT. COMPANY UNDER JUDICIAL REORGANIZATION. COMPETENCE OF THE UNIVERSAL COURT. POLITICAL TRANSCENDENCE VERIFIED. The competence of the Labor Court, in relation to labor debts of companies in bankruptcy or judicial reorganization, is limited to the definition and quantification of employees' rights. All amounts collected, including those relating to any appeal deposits, must be made available to the Universal Court. Precedents. Appeal known and granted. (RR-11966-59.2014.5.03.0163, 7th Panel, Reporting Justice Cláudio Mascarenhas Brandão, DEJT 10/06/2022).

The Second Panel of the Superior Labor Court has also taken a position on the matter:

"COMPANY UNDER JUDICIAL REORGANIZATION. IMPOSSIBILITY OF RELEASING APPEAL DEPOSITS TO THE PLAINTIFF EVEN IF MADE PRIOR TO THE GRANTING OF THE REORGANIZATION. AMOUNTS THAT MUST BE MADE AVAILABLE TO THE UNIVERSAL COURT. The assets owned by the company under judicial reorganization eventually seized by the labor court must be made available to the Universal Court, which includes the appeal and judicial deposits made by it in these proceedings, even if made before the judicial reorganization was granted. Review appeal known and provided." (RR-21934-97.2014.5.04.0030, 2nd Panel, Reporting Justice Maria Helena Mallmann, DEJT 03/25/2022).

In other words, the competence of the labor court is extinguished with the quantification of the claimant's credit, which must then be qualified in the judicial reorganization process.

It is important to point out that there is a trend that defends that, once the amounts are no longer available to the company, it could not demand their use in the reorganization plan, which is why this request should be denied.

The impossibility of expropriation of assets of the company under reorganization by the labor court, however, is not limited to assets found after the reorganization process. In fact, all the assets still owned by the company may be used in the reorganization plan, and the deposit amounts - which are nothing more than court guarantees - still belong to the company.

Thus, it is up to the labor court to observe the destination set by the reorganization court, including sending the amounts to the Common Justice, as the case may be.

This jurisprudential understanding is absolutely praiseworthy, and is applicable to lawsuits in both the appeal and liquidation phases, so that the amounts related to the appeal deposits are made available to the court-ordered turnaround, the only court with jurisdiction to define the destination of the assets of the company under reorganization.

By: Rafael Franzoi

CPDMA Team - Labor