Brazilian Supreme Court Justice Gilmar Mendes has ordered the suspension of the execution of a labor lawsuit concerning alleged fraud in the hiring of a worker through a legal entity, even after the judgment has become final. The decision was based on General Repercussion Theme 1,389, through which the Supreme Court will define:
- the jurisdiction to judge lawsuits involving civil service contracts;
- the legality of hiring legal entities and self-employed workers; and
- The distribution of the burden of proof in cases of alleged fraud.
By suspending enforcement actions, such as asset freezes and seizures, the minister sought to avoid legal uncertainty before the full court could decide on the matter.
The decision represents a relevant precedent for companies with similar processes, although the suspension is not automatic and depends on an analysis of each case.
It is worth remembering that, recently, Minister Gilmar Mendes ordered the continuation of proceedings that are in the discovery phase, allowing them to proceed until judgment by the Regional Labor Courts (TRTs), at which point they should be suspended again until the Supreme Federal Court (STF) defines Topic 1,389.
Our team is monitoring the proceedings regarding Topic 1.389 and remains available to assess its potential impacts.
