Introduction

Brazil's alternative dispute resolution (ADR) methods still require significant improvements – in particular, in relation to labour and employment matters.

In general, out-of-court ADR is not considered a valid procedure to resolve labour disputes. This is largely because many believe that employees may not have the true capacity to negotiate on their own behalf. Further, the Constitution provides that out-of-court settlements can be appealed before the courts.

This scenario may change in the near future. In particular, Congress recently took steps to encourage parties (and courts) to seek mediation for dispute resolution, including for labour and employment issues.

Mediation

Mediation Law

The Mediation Law (Law 13,140) was enacted in 2015 and came into force at the beginning of 2016. The new law sets out several provisions regarding mediation in and out of court. Mediators do not have jurisdiction to rule on an issue, but will encourage the parties to identify and develop an agreed solution.

Out-of-court mediation may be used to settle individual and collective rights. Parties are free to decide on the rules that will apply to the mediation, provided that the conditions set out by the Mediation Law are met – for example:

  • Out-of-court mediation:
    • The notification must include the scope of negotiation and the date and location of the first meeting. If the respondent does not reply within 30 days of receipt, the notification will be considered to have been rejected.
    • The law also sets out minimum provisions which must be met in any out-of-court mediation, regardless of whether they are addressed in the agreement.
  • Court mediation:
    • The courts will create specialised centres for mediation purposes.
    • Mediators are not subject to the parties' previous decisions.
    • Mediation proceedings must be concluded within 60 days; however, the parties can request that this deadline be extended.
    • The parties must be accompanied by their counsel during the mediation process.

While this law does not yet apply to labour and employment matters (Article 42), lawyers in the field expect that it may soon be extended to labour and employment issues – or that a specific law will eventually be created to address mediation in this regard.

New Code of Civil Procedure

In 2015 Law 13,105 – which created the new Code of Civil Procedure – was enacted by Congress. In March 2016 the code entered into force. An important feature brought by the new code is the creation of court mediation centres, which may guide and encourage settlement between litigating parties.

Since the code can be applied by labour courts as a supplementary source to resolve labour and employment matters, it will encourage labour courts to adopt similar measures, particularly for sensitive claims where a quicker solution is unavailable. In theory, the labour courts have already taken such steps in certain circumstances, but it is widely acknowledged that there is significant room for improvement.

Comment

Mediation is one of the most important principles of labour dispute resolution. However, recent research provided by the Superior Labour Court shows that there has been little improvement in this regard. The number of mediation proceedings has remained stagnant, despite the growing number of labour claims – in particular, in the last few years due to Brazil's economic crisis.

The law and labour authorities have already accepted the use of mediation in certain cases. For example, for out-of-court disputes, companies and labour authorities from the Ministry of Labour and Employment may use mediation to resolve collective matters. The law on profit sharing (Law 10,101/2000) also provides for the possibility to settle related issues through mediation.

Mediation has proven to be an efficient procedure to resolve disputes. Statistics show that approximately two-thirds of mediation proceedings held at the Ministry of Labour and Employment succeed. Companies, high-level employees and many lawyers are eager for a substantial change to mediation processes, as mediation has been proved to be a simpler, quicker and less expensive means to resolve labour and employment disputes.

For further information of this topic please contact Domingos Antonio Fortunato Netto or José Daniel Gatti Vergna at Mattos Filho, Veiga Filho, Marrey Jr e Quiroga Advogados by telephone (+55 11 3147 7600) or email (dfortunato@mattosfilho.com.br or jvergna@mattosfilho.com.br). The Mattos Filho, Veiga Filho, Marrey Jr e Quiroga Advogados website can be accessed at www.mattosfilho.com.br.

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