BRAZILIAN LAW AND JURISPRUDENCE

The Brazilian law system accepts the International convention, ratifying the International Agreements in its legal system.

Considering this subject, Brazil, had ratified the OIT Convention number 111, that protect the employment relationship against any discrimination:

OIT Convention 111 - DISCRIMINATION AT WORK - RATIFIED BY BRAZIL
Decree n. 62.150, of 19.1.68

Art. 1 - 1. For the purposes of this Convention the term "discrimination" includes:
a) ...... ..

b) any other distinction, exclusion or preference which has the effect of nullifying or impairing equality of opportunities or treatment in employment or occupation as may be determined by the Member (…)

Brazil has even a national law that protects any employment relationship against aby discrimination even before hiring, it is the law 9029/95:

Law No. 9029, OF 13 APRIL 1995.

Art. 1. It is forbidden the adoption of any discriminatory and restrictive practice for the purposes of access to employment relationship or it maintenance, by reason of sex, origin, race, color, marital status, family situation or age, except in this case, the protective cases for a minor set forth in item XXXIII of Art. 7 of the Federal Constitution.

There is also, a specific law that protects the elderly person, that is the senior citizen statute – law 10.741, that establishes:

Law No 10.741, 2003 OCTOBER 1 - Senior citizen statute

Art. 26. The elderly has the right to practice professional activity, respecting their physical, intellectual and psychological conditions.

Art. 27. Upon admission of the elderly in any work or employment it is prohibited discrimination and fixing maximum age limit, including contests, except in cases where the nature of the job requires.

Thus, analyzing these rules, at first sight, any termination of the employment relationship based only in the age of the employee is forbidden.

This is the position of the Brazilian Labor Court – Regional and Superior, as the judgments bellow:

"TERMINATION BASED ON AGE - DISCRIMINATORY- NULLITY - ABUSE OF RIGHT - REINTEGRATION - If from the factual assumptions emerged that the practice of the company is to dismiss employees that achieve 60 years old, it is imperative imposed for the judge avoid such illegal rules, effected under the cover of discretionary power of employer, that dismissals not to take effect under the taint of discrimination of elderly. (...) The farewell carried out by the respondent, although coined in its discretionary right to contract termination, was tainted for its discriminatory content, being null and void, in view of the express provision of Art. 9 of Labor Code, not generating any effect, on the legal consequence of the continuation of the employment relationship, which becomes available through reintegration. (...) Special Appeal not known regarding the theme "(TST; 5th T.; RR 462.888/1998.0; Rel Judge Summoned André Luís Moraes de Oliveira; DJ 26/9/03)"

Under Brazilian labor law, the lawsuit against this kind of employment contract termination can be discussed by the employee him/herself, or by the Labor Public Ministry (MPT), that has the right to sue Companies in protection to the diffuse and collective rights using the civil public action to nullify the compulsory dismissal policy, as seen at the jurisprudence bellow:

DISCRIMINATORY DISMISSAL. AGE FACTOR DISCRÍMEN - VIOLATION OF THE CONSTITUTIONAL RULES (ARTS. 1, IV 3, IV, 5, CAPUT, II and XXXVI, 7, I, XXX and XXXI, 170, CAPUT) AND NONCONSTITUTIONAL LEGISLATION. EMPLOYMENT REINTEGRATION AUTHORIZED BY LAW No. 9029/95. ART. 1090 OF CC. Imperious the invalidity of dismissal of employees related in public civil action, with subsequent reinstatement in employment if, from the apparently neutral practice of unmotivated act perpetrated by the defendant, stands out unwelcome indirect discrimination. Thus, it found that in the particular case, among the dismissed ones, most held the component indicated in the initial as discriminatory (aged in his forties and early forties), whose deleterious result moved away of the purposes of the agreed rules for privatization , not seeking social development or preserving the work as social value, that forced itself. Damage recognized against the principles, guarantees and rights - fundamental and social - registered at the precepts above written, as well as the nonconstitutional legislation (Law No. 9029/95) "(TRT 9th R .; RO 13115/2000; 32676 / 2001-. 2000; Relª Judge Rosemarie Diedrichs Pimpão; DJPR 23:11:01)

Therefore, it is forbidden for any Company to have a simple politic that impose the termination of an employment contract when the employee complete an age.

But there is an exception at social security law, when the employee is 70 years old for a man and 65 years old if a woman, when a company can determine for such employee to be in a compulsory retirement. We found this rule at Law 8213/91 in its article 51:

Law No. 8.213/91

Art. 51. The retirement for age may be required by the company as long as the insured employee has met the qualifying period and completed 70 (seventy) years old, if he is a man, or 65 (sixty five) years old, if she is a woman, being compulsory, in which case the employee will have guaranteed compensation provided for in labor legislation, considered as the date of termination of the employment contract immediately prior to the start of retirement.

Thus, we can consider that what the law protects is the employment relationship when the employee does not have the right of an integral retirement.
Considering the law and the jurisprudence written above, we need to consider what possibilities Companies have to implement a compulsory retirement policy and not a compulsory dismissal policy, which implies wherein the employee can be retired by Brazilian social security law.

Some companies have a retirement program for their employees, usually for the executive chiefs.

A research shows that such programs of compulsory retirement involve not only the termination of the contract but also a program of a private pension plan, a program to prepare the executive for his/her retirement, starting almost two years before the termination date.

It is what is showed in the presentation of the research made by Rogerio Graber for ABRH-RJ.

Considering other studies, we found the information that : “In Brazil, 41% of companies adopt this practice and the limit is lower - varies, usually 60-65 years, according to an exclusive survey by human resources consultancy Höft with 230 companies” and “The German manufacturer of auto parts and power tools Bosch has a global program in which employees can become consultants after mandatory retirement at 60 year old. The project existed for ten years and has 3000 people registered. In Brazil, this program became operational in lates 2010 and has 40 professionals who have already done 80 projects”

Therefore these policies allow to employees to have some remuneration after the termination, and he/she can work for companies as consultant.

But these situations are not completely safe for companies, considering Brazilian Labor Law, as the law and jurisprudence above. And even more, it should be careful in managing the consulting situation to not generate an outsourcing that will be considered fraud if the terms of an employment contract remain.

First of all, to implement any new rule the company shall consider the situation of the employees that were hired before these rules, because Brazilian Labor law protects the employment contract against prejudicial change to the employee:

Art 468 CLT In individual employment contracts it is allowed only to change its conditions by mutual consent, and yet since they do not result directly or indirectly harming for the employee, under penalty of nullity of the infringing clause of this warranty.

Thus if when the employees were hired, these rules did not exist yet, it will not be safe, for companies, applying such rules for them, because when they were contracted they did not expect this termination, and this situation can be considered as a harming change of the employment contract.

Risks in this situation are - reinstatement of the employee, payment of the salary for the time until his/her reinstatement, and even a moral damage indemnity.

These same risks will be present if the program of compulsory termination does not allow to the employee to be prepared for this situation, with other benefits, as private pension plan, only establishing the simple employment agreement termination.

Considering all Brazilian Law above and the decision from our Court of Appeal, we cannot consider totally safe any kind of this compulsory retirement program, because in its essence all is based on the employee age.

The situation is not completely safe for Companies, and shall be studied and the rules of this kind of program must avoid any harming for employee or the configuration of any kind of prejudice and discrimination.

Even with the new legislation, if agreements are individual, with employees said to be sufficient sufficient, if collective, they must be carefully handled considering the current anti discrimination law.

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*Maria Lucia Benhame is a lawyer at Benhame Sociedade de Advogados.