The Brazilian Supreme Court (STF) decided that “the outsourcing or any other form of labor division between distinct legal entities is lawful, regardless the corporate purpose of the companies involved, and kept the subsidiary liability of the hiring company” (Theme n# 725)
The understanding was settled at the combined judgment of the Allegation of Breach of Fundamental Precept (ADPF) n# 324/DF and the Extraordinary Appeal n# 958.252/MG (with general repercussion), ended in 08.20.2018.
At the trial, the Supreme Court Ministers agreed that the outsourcing is possible regardless of the activities developed by companies and declared unconstitutional the understanding at the Precedent n# 331 of Superior Labour Court (TST), that considered as lawful only the outsourcing of the so-called ancillary activities, that means, those not directly linked to the main object of the hiring company, such as security services hired by bank agencies and cleaning services hired by shopping centers for example, among others.
By a majority of votes (7×4), it has prevailed the understanding that the Federal Constitution does not prohibit the outsourcing of activities, whether they are main or ancillary activities. The Ministers understood that the outsourcing is supported by the constitutional principles of free enterprise and free competition, which guarantee that the economic agents are free to formulate business strategies to induce higher economic efficiency and competitiveness.
The STF highlighted that the hiring company shall verify the reputation and the economic capability of the hired company (the outsourcing), both for the provision of services and compliance with social security and labor obligations since, in case of breach of such obligations, the hiring company will have subsidiary liability, after regular judicial process.
The understanding of the Supreme Court also applies to contracts executed before Law n# 13.467/2017 (Labour Reform), whose article 4 allowed for the large outsourcing, of any activities.
Finally, the STF emphasized that the supply of manpower by a third company (manpower intermediation) is not considered outsourcing, since it results in fraud to the labor relationship with the relevant employer (article 9 of Labour Code) and an insult to labor social value (article 1, IV of the Federal Constitution).
Fraga, Bekierman & Cristiano Advogados teams in Rio de Janeiro and São Paulo are available to clarify any possible doubts.