STF reaffirms employers’ right to dismiss employees without just cause in Brazil

The recent decision by the Federal Supreme Court (STF), which confirmed the validity of Brazil’s withdrawal from Convention 158 of the International Labor Organization (ILO), strengthens legal certainty for companies when it comes to dismissal without just cause. With the maintenance of the withdrawal’s validity, the original rule remains: the employer has the right to dismiss an employee without cause, without the need to provide justification.

Background

In 1996, Brazil adhered to ILO Convention 158, which imposed rules for dismissing employees, requiring justifications, and offering workers the chance to defend themselves, except in exceptional cases. However, later in 1996, Brazil withdrew from the convention through Presidential Decree 2100/1996, allowing dismissals without cause to continue without the requirement of justification.

This withdrawal generated debates about its constitutionality, which were resolved in 2023, when the Supreme Court declared the withdrawal constitutional. On August 22, 2024, the STF reaffirmed this position, but also ruled that Brazil’s withdrawal from international treaties via presidential decree requires the approval of the National Congress, applicable only to decrees issued after June 23, 2023, which does not affect Brazil’s withdrawal from Convention 158.

This newsletter is for information purposes only and should not be relied upon to obtain legal advice on any of the topics covered here. For additional information, please contact the leaders of the labor team.

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