Supreme Court confirms that employers are not required to provide justification for termination without cause

At a glance

• The Federal Supreme Court in Brazil has rendered a decision confirming that employers do not need to present justification for terminations without cause.

In 1997, an action was filed to challenge the constitutionality of a 1996 Presidential Decree that excluded Brazil from those countries that ratified The Termination of Employment Convention (Convention 158) of the International Labour Organisation (ILO). ILO Convention 158 protects employees from unjustified terminations.

Through a Presidential Decree, effective November 1997, former President Fernando Henrique confirmed that Convention 158 would not be in effect in Brazil. In the same year, union bodies and confederations representing agricultural employees filed the Federal Supreme Court challenge. Employers’ bodies filed a separate action to confirm the validity of the decree.

After many years of discussion, on 26 May 2023, Justices from the Federal Supreme Court decided that they cannot invalidate the decree signed by a former president, such that Brazil remains out of the list of countries that have ratified ILO Convention 158. 

In practice, this means that employers in Brazil do not have to demonstrate reasons that led them to terminate an employee without cause.