Judgement of ADPF No. 501 by the Brazilian Supreme Court and the cancellation of Court Precedent No. 450 of the Superior Labor Court

Last Friday (August 5, 2022), the judgment of the Action Against the Violation of Constitutional Fundamental Right (“ADPF”) No. 501 was concluded, although the content of the judgement has not yet been made available.

ADPF No. 501 proposes the discussion of the unconstitutionality of Court Precedent No. 450 of the Superior Labor Court which provides for the payment of double vacation, in addition to one third of the amount, in case the vacation payment is executed outside of the legal term stipulated by Article 145, even when the vacation is enjoyed by the employee during the appropriate period.

Upon constitutionality control, the request for analyses of the Public Authorities act (Precedent  No. 450 of the Superior Labor Court) is based on the lack of legal basis regarding the exclusive competence of the Legislative Power considering Article 145 of the Labor Code does not stipulate sanctions in case the employer does not pay the vacation two days prior to the start of vacation and the application of sanctions results from an extensive understanding of the Superior Labor Court without provision stipulated by law.

As such, the Supreme Court accepted ADPF No. 501 with regards to its procedural aspects, ruling the unconstitutionality of Court Precedent No. 450 of the Superior Labor Court in its entirety in order to exclude from the Brazilian legal order the payment of double vacation, in addition to one third of the amount, in case the employer does not meet the legal term provided by Article 145 of the Labor Code.

Finally, up to now, the judgement effects have been adjusted in accordance with the legal provisions of the lawsuit filed, i.e. the effects of the decision rendered by ADPF No. 501 are applicable to everyone, it has binding effects to public authorities and has retroactive effect (ex tunc) to the cases in which the Court’s rendered decision has not become final and is not subject to appeal based on Court Precedent No. 450 of the Superior Labor Court and Article 137 of the Labor Code. 

*The authors also thank Thiago Garcia for assistance in writing this Update.