Source: Ultima Instância - SP - NEWS - 20/10/2009

The payment of compensation by companies accused of practicing so-called social dumping - denial of labor rights to increase profits and promote unfair competition - was admitted for the first time in the second instance of the Labor Court. In early October, the 4th Panel of the TRT (Regional Labor Court) of Minas Gerais imposed a fine on the JBS-Friboi group for repeated attempts to breach the CLT. Until then, only lower court decisions contained such condemnations.

Judge Julio Bernardo do Carmo, rapporteur of the case, says that the first degree court, since 2008, judged about twenty cases against the company for evasion of overtime and a workday exceeding 10 hours a day. "Sufficient factual framework to confirm the practice of social dumping", he points out.

Thus, the magistrate condemned the company to indemnify the worker at R $ 500 in order to “repair the offense perpetrated against his personal dignity, and to dissuade the company from continuing to practice the illegal labor”. Despite this, the magistrate considers that, strictly speaking, the indemnity should be channeled to the FAT (Fundo de Amparo ao Trabalho), since in such cases moral damage is always collective.

Julio do Carmo affirms that the practice is common in underdeveloped and developing countries, “when they sacrifice labor rights, in an attempt to increase external competitiveness”. The judge also criticizes the flexibilization of labor standards, such as outsourcing and salary reductions in collective agreements.

"There is an apparent equality in this legal relationship, because the classic condition of the worker is the permanent state of subordination", emphasizes the judge.

JBS-Friboi must appeal the decision to the TST (Superior Labor Court).

The new term to qualify labor fraud, named by magistrates, is not provided for in the CLT and was inspired by commercial law and aims not only to guarantee workers' rights but also fair competition in the market, as stated by the judge of the TRT (Tribunal Regional Labor Office) of São Paulo, Nelson Nazar.

The judge says that the practice became more common in the period of globalization and liberated imports, when companies to compete with cheap imports began to eliminate labor guarantees, collectively, to make prices more competitive in the market.

“There was a sequence of crashes in Brazil because the cheap products that arrived on the market used slave labor, low wages, an extensive workday”, emphasizes Nazar. For the judge of the São Paulo Court, the practice needs to be combated as a way of preserving the market and workers' rights.