By JORGE LUIZ SOUTO MAIOR*
The labor issue has long ceased to be a legal issue in the statements made by ministers of the Supreme Federal Court
The positions adopted by the majority of STF ministers, in labor matters, are guided by an understanding of an economic nature of a neoliberal nature that is, as we know, hostile to the effectiveness of social rights and, also, an affront to the project of the Social State established in the Federal Constitution.
There is no legal basis for such decisions. They are always arguments based on personal feelings marked by adherence to the interests of economic power and offenses against workers, the Labor Court and the Labor Prosecutor's Office.
The weakness of the legal arguments of the decisions handed down by the Supreme Court in the labor field has led to the proliferation of many criticisms and even preserved a judicial stance with repeated positions in the opposite direction.
Perhaps for this reason, Luís Roberto Barroso and Alexandre de Moraes, trying to provide a basis for the positions taken by the STF ministers, decided to bring new argumentative elements to the “problem”, but, in doing so, they only managed to make the situation worse.
They inaugurated the phase of incitement to non-compliance with Social Rights.
On October 12, 2024, during the II International Sphere Forum, in Rome, Italy, speaking to representatives of the economic sector (Eugenio Mattar – Localiza); Daniel Vorcaro – Banco Master; Flavio Cattaneo – ENEL; Roberto Azevêdo – Ambipar; Lucas Kallas – Cedro Participações; Alberto de Paoli – “Director of Rest of the World at Enel”; José Antônio Batista – Picpay; Fábio Coelho – Google; João Adibe – Cimed; Carlos Sanchez – NC Group; Wesley Batista – J&F Group; Rubens Menin – MRV, CNN Brasil and BancoInter; the president of the Supreme Federal Court (STF) and of the National Council of Justice (CNJ), Minister Luís Roberto Barroso, said that the difficulties that entrepreneurs face in Brazil are the result of “complex and often outdated labor legislation”.
Without specifically demonstrating what this complexity would be and also symptomatically forgetting that labor legislation has recently undergone enormous changes, all of them, including, meeting the demands of the business sector, Luís Roberto Barroso went further and practically justified the commission of illegalities by employers, stating that the “legal structure makes it difficult to comply with the rules”.
According to the minister, if the employer does not comply with the law, it is the law's fault. Therefore, every citizen and every company in the country would be given the “right” to fail to comply with the law under the subjective consideration that it is “complex”. Furthermore, judges would be given the prerogative of not applying a law on the grounds that it is “complex” or “out of date”, as, in fact, the ministers of the STF have been doing in matters related to labor rights. It is worth remembering that, with regard to labor issues, what they are “setting aside” are not only laws, but, above all, standards integrated into the Federal Constitution in the Title of Fundamental Rights.
And the worst thing is that they advocate this in the name of “legal certainty”!
According to Luís Roberto Barroso, the outdated and backward view that still persists in relation to entrepreneurs and free enterprise in Brazil is what harms economic development and innovation, creating an environment of legal uncertainty that drives away investments and limits the country's growth. Therefore, it suffices to say that one has a view that is not outdated and not backward so that the agent is free to stop applying the law and the Constitution.
Furthermore, in order to attract investment and “promote economic development and innovation”, the minister explicitly offers “legal certainty” for the breaking of the constitutional pact signed around human dignity; the social values of free enterprise; the prevalence of Human Rights; the construction of a free, fair and supportive society; the eradication of poverty and marginalization; the reduction of social inequalities; the promotion of the well-being of all, without prejudice of origin, race, sex, color, age and any other forms of discrimination; the social function of property; the social order based on the primacy of work, with the objective of social well-being and justice; the economic order based on the valorization of human work, with the aim of ensuring a dignified existence for all, in accordance with the dictates of social justice.
And Luís Roberto Barroso was not alone in this “mission.” He was accompanied by, among others, the following authorities: the president of the Senate, Rodrigo Pacheco (PSD-MG); the president of the Federal Court of Auditors, Bruno Dantas; the minister of the STF, Dias Toffoli; the attorney general of the Republic, Paulo Gonet; the minister of Justice and Public Security, Ricardo Lewandowski; the minister of Mines and Energy, Alexandre Silveira; senator Davi Alcolumbre (União-AP); senator Ciro Nogueira (PP-PI); federal deputy Dr. Luizinho (PP-RJ); ambassador Carla Barroso; ambassador Renato Mosca; the director general of the Federal Police, Andrei Rodrigues; the commercial director of Infraero, Tiago Chagas Faierstein; and the director of the National Land Transportation Agency, Lucas Lima.
It is important to note how this fact reveals how international economic power assumes its predatory and exploitative nature, particularly in relation to countries on the periphery of capital.
In the context of this strengthening of ties between capital and national public institutions, Minister Luís Roberto Barroso, in his statement, more than justifying non-compliance with the law, ended up inciting the commission of illegalities in the field of labor relations, also affecting the sphere of crimes against the tax system, since frauds against social rights represent a form of tax evasion, in terms of taxes and social contributions, which, in a certain way, refers us to the content of art. 286 of the Penal Code.
And the tax effect of labor illegalities is, of course, fully known to the ministers of the STF, as demonstrated, including, in the speech of minister Alexandre de Moraes, expressed in the judgment session of October 22.
Once again instigating confusion between outsourcing and “pejotização”, Alexandre de Moraes, to the delight of the mainstream media eager for fake news In labor matters, he expressed himself as follows: “Outsourcing: at that moment, everyone agrees to sign, especially because they pay much less tax than an individual. After the contract is terminated, then comes the labor lawsuit. However, and perhaps if case law began to require this, we wouldn’t have so many complaints. The person who accepted the outsourcing and signed the contract, when the contract is terminated and files the complaint, he would also have to pay all taxes as an individual. Then perhaps we wouldn’t have either the first problem, accepting the outsourcing, or the second, filing the complaint. Because it’s something that doesn’t, I would say, come to an end, because in the Labor Court, the complaint ends up winning, but he paid all the taxes back then as a legal entity and then he receives all the funds as an individual. Either he’s a legal entity or an individual. Either he outsourced or he didn’t outsource…”
In short, the minister knows that “pejotização”, incorrectly referred to by him as “outsourcing”, results in lower tax payments.
However, this is not a “benefit” that only affects the worker, as suggested. A company that uses the services of a natural person by formalizing a contract with a legal entity created by that same person is “benefited” in several ways, whether by not complying with labor protection rules, including the FGTS, which has a relevant social function; or by underpaying various taxes and social contributions.
Secondly, it is not really a choice that individuals or legal entities have to make, whether or not to collect taxes and social contributions in full. Tax incidence arises from the law and implies obligations that those affected cannot simply avoid, especially by seeking fraudulent strategies to do so. In fact, any attempt to prevent the application of tax obligations constitutes a crime.
Under Law No. 8.137/90, which defines crimes against the tax and economic order and against consumer relations, acts that aim to suppress or reduce taxes, or social contributions and any accessory, are defined as crimes and are identified, among others, in the following behaviors: (i) omitting information or making a false statement to tax authorities; (ii) defrauding tax inspections by inserting inaccurate elements or omitting a transaction of any nature in a document or book required by tax law; (iii) falsifying or altering an invoice, bill, duplicate, sales note or any other document related to a taxable transaction; and (iv) preparing, distributing, providing, issuing or using a document that is known or should be known to be false or inaccurate (art. 1).
It also establishes that it constitutes a crime of the same nature: (a) making a false statement or omitting a statement about income, assets or facts, or using other fraud, to exempt oneself, in whole or in part, from paying taxes; (b) failing to collect, within the legal term, the amount of tax or social contribution, discounted or charged, as a passive subject of an obligation and which should be collected for the public coffers (art. 2).
Furthermore, as expressed by André Gustavo Souza Fróes de Aguilar, in the text “Pejotização: fraud, tax and criminal risks for employees and employers”, there are several other criminal types applicable to the situation in which an attempt is made, through “pejotização”, to avoid the full payment of taxes and social contributions.
As explained by André Fróes Aguilar, “it is not up to individuals to decide whether or not an employment relationship exists, just as they are not able to eliminate the tax effects arising from the relationships they establish, as provided for in article 123 of the National Tax Code – CTN (Law No. 5.172, of October 25, 1966 – published in the DOU of October 27, 1966 and rectified in the DOU of October 31, 1966)”, which provides as follows: “Art. 123. Unless otherwise provided by law, private agreements relating to the liability for the payment of taxes cannot be opposed by the Public Treasury, in order to modify the legal definition of the passive subject of the corresponding tax obligations.”
In “pejotização”, which is, as we know, the artificial transformation of a natural person into a legal entity, to create the impression that there is no work performed by the worker but rather a service provided by his/her individual company, what is promoted is an authentic attempt to circumvent the incidence of taxation, since the invoices issued by the legal entity constitute, in fact, remuneration receipts.
Furthermore, the artificial transformation of a natural person into a legal entity fits perfectly into the hypothesis established in item I of art. 1 of Law No. 4.729/65, constituting a crime of tax evasion, “making a false statement or omitting, in whole or in part, information that should be produced to agents of legal entities under internal public law, with the intention of exempting oneself, in whole or in part, from the payment of taxes, fees and any additional amounts due by law”.
Likewise, in articles 71, 72 and 73 of Law No. 4.502/64: “Art. 71. Tax evasion is any willful action or omission intended to prevent or delay, in whole or in part, knowledge by the tax authority: (1) of the occurrence of the event generating the main tax obligation, its nature or material circumstances; (2) of the personal conditions of the taxpayer, likely to affect the main tax obligation or the corresponding tax credit”.
“Art. 72. Fraud is any willful action or omission intended to prevent or delay, in whole or in part, the occurrence of the event generating the main tax obligation, or to exclude or modify its essential characteristics, in order to reduce the amount of tax due to avoid or defer its payment.”
“Art. 73. Collusion is the fraudulent agreement between two or more natural or legal persons, aiming at any of the effects referred to in articles 71 and 72.”
And it is worth insisting: the worker does not impose on the contracting company the condition that he will only accept the service if it is disguised as a legal entity. It is the contracting company that, holding the economic power and the rule of the law of supply and demand, determines what the form of hiring will be, and therefore it is entirely its responsibility to commit the illicit practice.
However, Alexandre de Moraes, disregarding reality; disregarding the set of legal standards applicable to the specific situation in which “pejotização” is demonstrably a way of circumventing the application of labor, social security and tax legislation; and turning a blind eye to the punitive effects, including criminal ones, of the ruse practiced, sees the situation only as an opportunity to express a kind of public moral reprimand to the worker's conduct, calling him, in other words, false, dishonest or hypocritical, in order to legitimize and justify all the illegalities committed by the contracting company.
According to the minister, since the worker received the undue benefit of paying less tax, he should be punished by not receiving labor rights. This logic, therefore, harks back to the period of legal anomie of “an eye for an eye” and implies the effective non-compliance with the functional duty to apply the law to the facts. Alexandre de Moraes ruled out the application of the rules to the case under judgment and, worse, maintained without any punitive repercussion the various crimes committed by the company in the fraud attempted against labor, social security and tax rights.
The attitude, furthermore, reflects a feeling of punishing the worker for having called upon the Judiciary, which, by the way, was treated by the minister as a “problem”, and this is very serious because it fatally violates the basic precept of citizenship, which is the constitutional right to action.
Luís Roberto Barroso's campaign against what he has been calling "excessive conflict" has provoked a genuine aversion among ministers to workers (claimants) in labor lawsuits, as if they were criminals or, at the very least, presumed litigants in bad faith, simply because they move the State's judicial machinery, while companies are treated as innocent victims, full of all virtues.
It is important to understand that this way of rationalizing labor relations is closely linked to the arguments used to justify the enslavement of indigenous peoples, and then, at the same time, of Africans trafficked to Brazil. The moral degradation imposed on workers is directly linked to the feeling that black and poor people can be exploited without any limits and that they cannot even demand respect for their rights as human beings, especially when they “accept” the conditions imposed on them by the slave owner, or rather, the employer.
Racism, tragically, continues to dominate the minds of the ruling class in Brazil, in all spheres of institutional activity and in private life in general.
To complete the scenario of fear regarding the right to action, on October 22, the Plenary of the National Council of Justice (CNJ) unanimously approved the proposed recommendation presented by President Luís Roberto Barroso, which regulates, as expressed in the document, abusive or predatory litigation, bringing, in the annex, an “exemplary list of potentially abusive procedural conducts”, all of them (twenty in total) related to the initial petition, that is, nothing that addresses the defendant's position.
The National Council of Justice assumes that the structural problems of the Judiciary (because this is one of the concerns) will be solved by inhibiting access to justice, leaving persistent debtors and repeat offenders and self-confessed violators of the legislation without any assessment, notably in the labor sphere, in order to, in fact, meet another concern, that of freeing the economic sector to guide itself without any limitation brought in by social legislation.
All of this serves the undisguised purpose of spreading feelings of impotence and conformity among workers, generating a kind of consenting submission proven by discouragement and the fear of suffering even greater consequences if they complain.
At the same time, this situation, encouraged and legitimized by the highest Court of the Judiciary, which certainly has repercussions in other instances, promotes, among employers, the certainty that they no longer need “reforms” in legislation to remove labor rights and weaken unions, since, in practice, social legislation no longer constrains them.
The legal order applicable to employment relations is set out in various laws and, above all, in the Federal Constitution, but it is as if, in practice, it did not exist.
This new escalation of attacks on Social Rights further reveals the feelings that the majority of the ministers of the Supreme Federal Court have towards the working class and, certainly, how much it is allied to the exploitative and predatory interests of economic power.
It turns out that the institution, the Supreme Federal Court, which is above its members, is the guardian of the Constitution and the ministers themselves must be subject to this precept.
The massacre committed by the majority of the Supreme Court justices against the working class is an affront to the legal and democratic order. And expressed through an increasingly aggressive inversion of values, it is already becoming a case of explicit verbal violence, even affecting the integrity of other republican institutions, constitutionally guaranteed.
Paraphrasing Alexandre de Moraes himself, if the Supreme Court justices applied the laws and the Federal Constitution, perhaps we wouldn't have so much tax evasion and so much disrespect for social and labor rights. And, as he himself suggests, there is no middle ground: either you apply them or you don't!
*Jorge Luiz Souto Maior is a professor of labor law at the Faculty of Law at USP. Author, among other books, of Moral damage in employment relationships (Studio editors) [https://amzn.to/3LLdUnz]
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