A majority of the justices of the Federal Supreme Court (STF) overturned Summary 450 of the Superior Labor Court (TST), which provided that employers were required to pay double the vacation pay, including the constitutional one-third bonus, whenever payment was made later than two days before the employee’s leave.

By declaring the summary unconstitutional, the STF invalidated all non-final decisions that had applied this understanding. The summary was based on article 137 of the Consolidation of Labor Laws (CLT), which provides for double payment when vacation is not granted within 12 months after the right was acquired. The TST had extended this understanding to also cover situations of late payment.

— The decision will affect a large number of labor lawsuits, favoring employers, given that, under the decision, there is no penalty of double vacation pay — explained Mariana Dias Vapozoli, Labor Law specialist at Giamundo Neto Advogados.

Restrictive interpretation

For the Supreme Court justices, it is not for the Superior Labor Court to change the scope of a rule to cover situations not provided for in the legislative text, especially when the rule establishes a penalty and should therefore be interpreted restrictively.

The governor of Santa Catarina filed a Claim of Non-Compliance with a Fundamental Precept (ADPF) against the summary at the Supreme Court. The reporting justice, Justice Alexandre de Moraes, had dismissed the action without ruling on the merits. The governor of Santa Catarina appealed and, by majority vote, the matter went to the plenary.

— For employers, the decision may mean a significant reduction in cases discussing double payment of vacation not paid within the period provided for in article 145 of the CLT (the two days before the start of the vacation) — said Ricardo Christophe da Rocha Freire, partner at Gasparini Nogueira de Lima Barbosa Advogados and Labor Law specialist.

For Bruno Minoru Okajima, Labor Law specialist and partner at Autuori Burmann Sociedade de Advogados, even before the STF’s review, some TST justices had already been considering that double payment should only apply when the employer’s delay could not be considered ‘negligible’.

— The CLT expressly provides that the employer shall pay double vacation pay if the rest period is not granted to the employee within 12 months after the end of the accrual period, with no mention of any penalty if the employer fails to pay vacation pay on time. In concluding that the same penalty should apply to the employer also in the event of failure to meet the two-day payment deadline, the TST held that both the obligation to pay vacation and the obligation to grant the rest period, concurrently, are essential for the employee to actually enjoy their vacation — he said.

He also noted that the labor reform introduced the possibility of splitting vacation into three periods, by agreement between employer and employee, which leads to occasional delays that “cannot result in penalties for bureaucratic obstacles”.

Story originally published in Extra (in Portuguese), on 08/10/2022.