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Supreme Court sets new update for labor debts

At the last session of the year, the Supreme Court (STF) concluded the trial of actions* that discussed the monetary correction of labor judicial debts and determined that the application of the Reference Rate (TR) is unconstitutional.

Following the vote of Minister Gilmar Mendes, rapporteur of the actions, the majority of ministers of the Court decided that, until there is a legislative solution, for the updating of claims arising from judicial conviction and correction of recursive deposits in judicial accounts in the Labor Court should be applied the following indexes:

  • IPCA-E in the pre-judicial phase and
  • SELIC in the judicial stage, from the summons of the defendant (claimed).

According to Minister Dias Toffoli, Selic is "a rate that includes interest moratorium and monetary correction, which is why its incidence prevents the application of other update rates", thus, also no longer be applied the interest of 1% a.m. that accompanied the TR in the updating of labor debts.


Also by a majority vote, the Supreme Court modulated the effects of the decision to determine that the new rule:

  • does not reach the payments already made, in due time and manner, or the final decisions that expressly adopted the TR (or the IPCA-E) and the interest on late payment of 1% per month;
  • applies retroactively to ongoing proceedings without final judgment;
  • applies to achievements already finalized provided that without any express manifestation as to the indices of monetary correction and interest rate (express omission or simple consideration of following the legal criteria).


Minister Gilmar Mendes (rapporteur), who proposed the application of the IPCA-E and SELIC indices in different phases, was accompanied by Minister Carmen Lucia and Ministers Alexandre de Moraes, Luís Roberto Barroso, Nunes Marques and Dias Toffoli, thus forming a majority of votes (6 votes).

Minister Edson Fachin, who presented a divergent understanding that the IPCA-E should be the index to be applied for the updating of labor judicial debts, was accompanied by Minister Rosa Weber and Ministers Ricardo Lewandowski and Marco Aurelio, thus forming the unsuccessful minority (4 votes).

Debate already lasts more than 5 years

Despite the recent decision of the Supreme Court, the discussion about the monetary correction of labor lawsuits seems far from over.

Legal experts point out that the decision exceeded the limits of the deal by also changing the rule on interest. Others point out that the application of Selic at this time is unfair, to the extent that it was purposely decreased by the Central Bank to induce economic recovery, and is currently below inflation.

Photo: Dorivan Marinho/SCO/STF

* Declaratory Actions of Constitutionality (ADCs) 58 and 59 and Direct Actions of Unconstitutionality (ADIs) 5867 and 6021.


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