by Luiz Fernando Plens de Quevedo

To be adequate to address the impacts of measures restricting people’s movement in response to the dramatic spread of the coronavirus, the measure provided for in art. 18 of MP 927/2020 should have excluded only §5, keeping applicable article 2-A of the Unemployment Insurance Program, which provides for payment of the professional training allowance.

By excluding the participation of unemployment insurance, the response expected from MP 927/2020 proved insufficient to deal with the effects of the shutdowns resulting from the social distancing policy adopted by several states and municipalities. Further job preservation measures are still awaited.

However, before the first week without a replacement for art. 18 had ended, a climate of insecurity definitively set in when the President of the Republic, even without formally overriding the technical authority of the Ministry of Health, began to disparage the social distancing strategy. While Ministry of Health Ordinance No. 356 of 03/11/2020 and MJ/MS Ordinance No. 5 of 03/17/2020 remain in force — which, pursuant to Law 13,979/2020, authorized local managers to adopt social distancing as the first response to the pandemic — President Jair Bolsonaro, by opposing the measures adopted by states and municipalities, identified these federative entities as directly responsible for the repercussions on jobs of fighting the pandemic.

It is true that, according to the lessons learned from the pandemic on its way to Brazil, the repealed art. 18 did not go too far in providing for the possibility of suspending employment contracts for up to four months.

Without a new and adequate measure replacing art. 18, the palliatives left in MP 927/2020 will not be enough to deal with the already certain and necessary tightening of social distancing measures. The contradiction between the measures adopted and announced by the Federal Executive Branch roughly followed this chronology: on 03/22 MP 927 was published; on 03/23 MP 928/2020 removed art. 18 from MP 927/2020; on 03/24 the President began opposing social distancing on national television.

With great expectations built up for a new Provisional Measure adequately replacing art. 18, the comic twist (true Marxism, of the Groucho persuasion) came at the impromptu doorstep press conference held on 03/27, at which the President, still opposing the distancing strategy, did so by highlighting art. 486 of the CLT. In other words, by reaffirming his opposition to the distancing measures adopted by states and municipalities, and expressly suggesting that states and municipalities should take responsibility for paying the severance of all employees affected by the bitter side effect of the measures to combat the spread of the pandemic, he signaled against issuing a new Provisional Measure with an adequate replacement for art. 18.

This is because, at first analysis, the hypothesis of art. 486 of the CLT was ruled out by the issuance of MP 927/2020 which, by recognizing the pandemic containment measures as force majeure, presented alternatives “in order to guarantee the continuation of the employment relationship”, through extraordinary measures to withstand the effects of the temporary stoppage of work, as provided for in Law 13,979/2020, under which an act of a municipal, state or federal authority may give rise to temporary shutdowns of various economic activities.

When MP 927/2020 was stripped of its main extraordinary measure, art. 18, it became inadequate for the purpose of “guaranteeing the continuation of the employment relationship”. Added to the signals from the Federal Executive Branch, it is necessary to assess the possibility of turning to factum principis as a viable alternative to prevent employees from losing their severance pay, imposing liability for paying severance on whoever is rightfully responsible.

Even if only to rule out the Federal Government’s liability for paying severance resulting from terminations of employment contracts that the movement restriction decrees may cause, the federal government itself admitted, in public statements, that factum principis applies. Thus, after the President’s statement on 03/27, the hypothesis of an act of state (fato do príncipe), or the provision of art. 486 of the CLT, was again accepted as an alternative for employers unable to withstand the consequences of the pandemic containment measures.

Regarding the general aspects of art. 486 of the CLT and the exceptional nature of the shutdowns provided for in Law 13,979/2020, aimed at the social interest of the community, it should be clarified that the Superior Labor Court (TST) already has settled case law holding the public authority liable for paying the severance of workers employed on rural property expropriated for Agrarian Reform purposes (TST-1770-57.2013.5.03.0036, 4th Panel, published on 12.18.2015, Reporting Justice Maria de Assis Calsing; TST-1764.44.2013.5.03.0038, 2nd Panel, published on 09.29.2017, Reporting Justice Maria Helena Mallmann; TST-1745-14.2013.5.03.0143, 3rd Panel, published on 04.29.2016, Reporting Justice Maurício Godinho Delgado).

The discussion on characterizing an act of state as a measure to protect employees and employers affected by the impossibility of continuing business activities, given the Executive Branch’s inaction, is necessary and urgent. The pace of events will help advance the search for appropriate responses to mitigate the consequences of the urgent containment of the pandemic’s spread among the population. It is the State’s role to present new measures; otherwise, it will be necessary to seek relief in a statutory provision that has been in force for almost 70 years (art. 486, CLT).

Article originally published in Estadão, in the column of Fausto Macedo (in Portuguese), on 06.12.2020.