by Mariana Capozoli and Paula Esteves

Bill (PL) No. 4,552 of 2020, introduced by Senator Chico Rodrigues (DEM/RR) to amend the Consolidation of Labor Laws (CLT), is pending in the Federal Senate. The purpose of the Bill is to allow labor debts under judicial enforcement to be paid in installments, due to the problems caused by the emergency of international concern resulting from the coronavirus (Covid-19), referred to in Law 13,979 of February 6, 2020.

To this end, PL 4,552/2020 adds article 923 to the CLT which, if approved without changes, will read as follows:

“Art. 923. Labor debts whose judicial enforcement begins while Legislative Decree No. 6 of March 20, 2020 is in force, or within 10 (ten) months after its end date, may be paid in up to 60 (sixty) installments.

• 1 The minimum amount of the installments referred to in the caput is 1 (one) minimum wage.
• 2 The amount paid in installments shall be adjusted for inflation by the National Consumer Price Index – INPC.
• 3 From the date the state of calamity and health emergency is declared, and while it is in force, the criterion for updating the debt in pending proceedings shall be the National Consumer Price Index – INPC.
• 4 Late payment of 2 (two) consecutive installments shall result in the early maturity of the remaining debt, plus a fine of 20% (twenty percent) on all overdue installments.”

According to Senator Chico Rodrigues, as can be inferred from the bill’s justification, PL 4,552/2020 aims to allow the survival of companies that suffered financial impacts as a result of the Covid-19 pandemic, especially micro-enterprises, while at the same time protecting workers’ livelihoods by ensuring continued payment of the labor debt being enforced.

Weighing the need to ensure business survival and enable payment of labor debts whose judicial enforcement began between 03/20/2020 and 12/31/2020, or within ten months after the end of Legislative Decree No. 6/2020, against the need to ensure that workers receive the amount being enforced, we arrive at the balance struck by the proposed wording of the new article 923 of the CLT.

Thus, the judicial enforcement of labor debts that began — or will begin — between 03/20/2020 and 12/31/2020, or within ten months after the end of Legislative Decree No. 6/2020, may be paid in up to 60 installments, provided the minimum installment is one minimum wage (currently BRL 1,045.00), with the amount adjusted by the INPC (National Consumer Price Index). Finally, any late payment of two consecutive installments will result in the early maturity of the remaining installments, plus a 20% fine on the overdue amounts.

The Bill thus gives business owners — especially micro-entrepreneurs — the possibility of honoring labor debts already subject to judicial enforcement, without depriving workers of the guarantee of receiving these amounts, even if over a longer period.

It is important to note that, currently, when a company acknowledges the debt, it may legally pay it in installments, with 30% paid upfront and the remaining amount divided into up to six installments, the total of which, adjusted monthly, will be increased by court costs and attorneys’ fees, under article 916 of the Code of Civil Procedure (CPC).

The Bill is currently before the Plenary of the Federal Senate and was sent for publication on 09/14/2020. Afterwards, the Bill must be reviewed by the Chamber of Deputies and, if approved without changes, will be voted on in the Senate and the Chamber. Once approved by both, the Bill will be sent to the President of the Republic, who may sign it into law or veto it, in whole or in part.

We consider legislative measures aimed at maintaining economic activity to be healthy, as this is essential to sustaining the livelihoods of workers who have also been hit by the difficulties caused by the pandemic.

Article originally published in Estadão, in the column of Fausto Macedo (in Portuguese), on 09.30.2020.