In the judgment on September 21, 2023, the Court's 1st session to uniformize jurisprudence (SBDI-1) decided that Brazilian legislation applies to employees of cruise ships hired to carry out their activities on board foreign vessels in national and international waters.
International labour relations are increasingly common in social relations in the globalized world, especially post-pandemic. However, determining the legislation applicable to these relationships can be challenging.
In labour law, the TST had the understanding consolidated in Summary 207 until 2012 that the legal labour relationship was governed by the laws in force in the country in which the services were provided. In April 2012, however, the TST cancelled the Summary mentioned above, giving effect to the principle that a worker hired in Brazil to provide services abroad will have his employment contract governed by Brazilian law and not by foreign law.
The Law of Introduction to Brazilian Law (LINDB) is the primary statute that deals with conflicts of laws in Brazilian law. Article 9 states that obligations, in general, are governed by the law of the country in which they are constituted:
Art. 9o To qualify and govern obligations, the law of the country in which they are constituted will apply.
§ 1o If the obligation is intended to be executed in Brazil and depends essentially on it, it will be observed, admitting the peculiarities of foreign law regarding the extrinsic requirements of the act.
§ 2o The obligation resulting from the contract is deemed to be constituted in the place where the proponent resides.
In other words, the general rule is that contracts are governed by the law of the place in which they are signed. However, until 2012, the TST understood that employment contracts, unlike other contracts, were governed by the laws of the place where services were provided, the so-called principle of territoriality. With the cancellation of Summary 207 and considering the principles of the more favourable law to workers, the TST has understood that employment contracts signed in Brazil – even if executed abroad – will be governed by Brazilian legislation.
The SBDI-1 decision confirms this critical change in the understanding of the Superior Labour Court in the face of the increasing internationalisation of the Brazilian labour market. This change reduces the degree of legal uncertainty. It minimises the bureaucracy associated with providing services abroad, as there is no longer a need for in-depth knowledge of foreign law.
In the recent SBDI-1 decision, the TST applied the principles of the most favourable law and the Center of Gravity Theory to the case. The decision has not been published to date.
Source: TST, Case No. TST-E-ED-RR-15-72.2019.5.13.0015, SBDI-I Plena, Justice Cláudio Mascarenhas Brandão, judged on 21/09/2023.
