On April 14, Minister Gilmar Mendes, of the Brazilian Supreme Court (STF), ordered the suspension of all ongoing lawsuits in the country that discuss the validity of hiring legal entities or self-employed workers to provide services, a practice known as ‘pejotização’.

This decision was taken after recognition, by the Plenary of STF, of the general repercussion of the issue in the Extraordinary Appeal with Interlocutory Appeal (ARE 1532603), which directly affects several sectors of the economy, such as health, technology, law, logistics and others in which this form of contracting is common.

According to the reporting Minister, there is a recurrent non-compliance by the Labor Courts regarding understandings already settled by STF, which has caused legal uncertainty and a high number of constitutional complaints. The Supreme Court will analyze not only the lawfulness of these contracts, but also the competence of the Labor Courts to judge these cases and the definition of who should bear the burden of proof, essential points for the security of contractual relations in the country.

The suspension will remain valid until the Plenary judges the merits of the appeal. The decision that may be rendered must be observed by all courts in Brazil in similar cases.

Nasser Advogados continues to closely monitor this issue and its consequent implications, providing strategic and up-to-date legal support to our clients.