The Joint Recommendation TST 26/22 CSJT/GP, published on October 11, provides for the need to prioritize the processing of labor lawsuits, whose credit must be paid before the Court of Judicial Reorganization or Bankruptcy, for the prevalence of what was established and approved in the judicial reorganization, and for the promptness in the issuance of credit certificates, as per article 9 of Law 11.101/05 – Law of Judicial Reorganization and Bankruptcies.

The recommendation of the Superior Labor Court (TST) is extremely relevant and timely, especially regarding the need for judges to observe the rules defined in the judicial reorganization even after its closure.

After all, is it possible to affirm that the closure of the judicial reorganization entails the invalidity of the rules defined therein and entails the conclusion that the company under reorganization has become solvent? In our opinion, the answer is no.

This discussion has been contended in several labor lawsuits and, for some Labor judges, the rules defined in the judicial reorganization cease with its closure.

The main motivation in these decisions is the fact that, once the judicial reorganization is closed, the Labor Court must execute the credit arising from the labor lawsuit, and it is no longer necessary the issuance of the credit certificate of the labor lawsuit for the judicial reorganization, the involvement of the Civil Court, and the compliance with the criteria decided therein.

This understanding does not seem correct because the closure of the judicial reorganization, with the eventual reorganization of the company, does not mean that the judicial reorganization plan simply ceased to exist and that the company under reorganization has surplus funds.

It is important to emphasized that, precisely because the judicial reorganization plan existed, the company under reorganization was able to subsist and end the judicial reorganization lawsuit.

Furthermore, the closure of the judicial reorganization cannot be interpreted as the return of the financial health of the company under reorganization because the effects of the judicial reorganization plan are prolonged in time and remain reflected in the future, until all creditors involved in the judicial reorganization receive their credits, within the limits of what was defined in the judicial reorganization plan.

As with any legal transaction, the judicial reorganization plan is binding on all the parties involved within the term and in the form defined upon its approval.

The incidence of the judicial recovery plan on a labor credit is tied to its generating fact. If it is prior to the approval of the judicial reorganization, there is no doubt as to its subjection to the definitions established therein, even if the labor lawsuit is filed after the closure of the judicial reorganization.

Therefore, the Labor Court cannot simply ignore the existence of a judicial reorganization plan because it is closed. It is necessary that its content and that of the decisions given in the judicial reorganization are analyzed, understood, and applied by the Labor Court when judging labor lawsuits that submit to labor relations prior to the date of the approval of the judicial reorganization.

For this reason, the pronouncement of the TST was essential for jurisdictions seeking compliance with the constitutional principles of legal certainty and the reasonable duration of the lawsuits.

Among other measures, the president of the TST and the Superior Council of Labor Justice (CSJT) recommend that the parameters established in the judicial recovery plan approved in the file of the lawsuit in which the judicial, extrajudicial or bankruptcy reorganization, even if already closed, including in the hypotheses of the appearance of labor lawsuits after the closure, should be observed and applied when the generating event pre-process of judicial recovery:

• 3. In the event of the emergence of labor lawsuits after the complete closure of the judicial reorganization lawsuit, out-of-court and bankruptcy of the entrepreneur and the business company, in the name of good faith and the effectiveness of Law No. 11,101/2005, the parameters set out in the approved reorganization plan must be observed and applied in the file of the lawsuits in which the judicial, extrajudicial or bankruptcy recovery has been processed, even if it has already ended.
• 4. The moment of the provision of services, as a generating fact, qualifies the subjection of labor lawsuits to the judicial reorganization plan, regardless of the date of filing of the respective labor lawsuit pursuant to Article 49 of Law No. 11,101/2005.

Although the recommendation is not binding or coercive, our expectation is that it will influence the judgments in the first and second instances, so that the Labor Court will have greater honor for what is decided by the Civil Justice, ensuring more legal certainty for those involved.