The social isolation policies, implemented by the need to prevent and reduce contagion from COVID-19, have caused a severe impact on companies, which have claimed to the Judiciary to postulate the provisional suspension of payment of labor agreements already signed.

Given this challenging reality, courts are granting judicial decisions that seek to establish a balance of losses, such as reducing the value of installments, exemption from fines, including the provisional suspension of payment of labor agreements.

For example, in a decision of the 7th Labor Court of the East Zone of São Paulo, in the case records of case nº 1001981-68.2015.5.02.0607, judge Mariza Santos da Costa accepted the company’s request to reduce the value of the installments of an agreement signed in judgment.

To substantiate the decision, the judge understood that, due to the increase in the number of cases of COVID-19 and the recognition of the state of public calamity throughout the national territory, many states have decreed quarantine to prevent the spread of the disease, affecting companies, making many businesses nationwide unfeasible, with a high probability of rising unemployment.

As a result, to avoid irreversible losses, to the employee and to the employer, in compliance with the principles of reasonableness and proportionality, the judge accepted the employer’s request regarding the reduction of the installment value, authorizing the payment of 30% (thirty percent) of the agreed amount, for each installment due, without incurring a fine, thereby increasing the number of installments.

The decision thus aims to mitigate the employer’s loss, which would occur in the event of a total suspension of the settlement payment, and the company now has a breath to manage the effects of the crisis that is now underway.

Following the same approach, a decision issued by Judge June Bayão Gomes Guerra, of the 19th Labor Court of Belo Horizonte, in the case files of process No. 0010391-84.2019.5.03.0019, determined the suspension of a judicial agreement between a company and a worker for 30 (thirty) days. The judge dismissed the application of penalties foreseen in the agreement, such as a fine and early maturity of undue installments in the agreement.

The judge grounded its decision on the understanding that the declaration of early maturity of undue installments and the imposition of a fine would imply an excessive burden imposed on the company, “given the reduction of its usual earnings, resulting from the social isolation imposed on the whole community.”

Both decisions are important precedents, and it is recommended that, in the event of difficulty in fulfilling obligations assumed by judicial agreement, the company/defendant, before the default, report its difficulties to the competent court, requesting a new deadline for payment or even the reduction of the installment value, without incurring a fine.

The teams of Fraga, Bekierman & Cristiano Advogados are available to answer any questions about the measures described above.