Brazilian Supreme Court Concludes Ruling Involving Convention 158 of the International Labor Organization

Brazilian Supreme Court Concludes Ruling Involving Convention 158 of the International Labor Organization

By a majority vote, the Justices of the Brazilian Federal Supreme Court ("STF") upheld Decree No. 2100 of 1996, which provided that Convention 158 of the International Labor Organization ("ILO") would not be enforced in Brazil. 

The Convention regulates employer’s ability to terminate employees, requiring legislation of the signatory countries not to provide for the possibility of unjustified termination of employment contracts.

It is important to clarify that, despite being related to the matter, the STF's judgment did not deal directly with unjustified dismissal in the country.

In 1995, Brazil ratified ILO Convention 158. However, Brazil withdrew from the Convention in 1996, upon decision of Fernando Henrique Cardoso, President of the Republic at the time, through Decree No. 2100, of 1996, which determined that the referred rule would no longer be in force in Brazil as of November 20, 1997.

In this context, a Direct Unconstitutionality Action (Ação Direta de Inconstitucionalidade, or "ADI") was filed, questioning the legal procedure for the regulation of the International Convention.

The ADI was based on the fact that the President of the Republic at the time could not, on his own, withdraw international treaties, conventions or agreements approved by the Legislative Power, as those would need to be approved by the National Congress.

In the ruling, the STF Justices recognized that adherence to the Convention would impose risks for employers, with possible harmful effects on labor relations, especially considering the social effects on the country if it were applied.

Upon decision, the constitutionality of Decree 2100, of 1996, was recognized, and, as result, ILO Convention 158 was deemed non-enforceable in Brazil.

Despite the above, the Justices maintained that the withdrawal of an international treaty approved by Congress requires the approval of the Legislative Power.

Although the STF's judgment only concerns the legal procedures for regulating Convention 158, it is now clear that the President's withdrawal was grounded and none of the dismissals without just cause that have occurred since November 20, 1997, shall be subject to revision.