Corporate Labor & Employment Law

Yes. A signed agreement is not the only element that Brazilian labor courts consider. What determines the existence of an employment relationship is the factual reality of the arrangement: personal performance of duties, non-occasional service, compensation, and subordination — the four elements set out in art. 3 of Decree-Law 5.452/1943 ("CLT", Brazil's Consolidated Labor Laws). When all four are present, a judge may disregard the "PJ" agreement (an arrangement where a professional is engaged as a legal entity rather than as an employee) regardless of what is written in it. Law 13.467/2017 (the 2017 Labor Reform) created the "autônomo exclusivo" category (art. 442-B) — an exclusive independent contractor — but it requires that the service provider organize their own work and bear the associated risks, which rarely happens in typical startup hiring arrangements.Ler artigo completo

Labor due diligence checks for hidden liabilities that could affect valuation. The main points reviewed are: (1) the relationship between "PJ" contracts (independent-contractor agreements) and the actual role performed by each service provider; (2) consistency of "FGTS" contributions (Brazil's severance indemnity fund, evidenced by a statement issued by Caixa Econômica Federal, the federal bank that administers it); (3) history of labor lawsuits filed via "PJe" (the Judiciary's electronic case-filing system); (4) compliance with "eSocial" filings (the government's unified system for reporting labor, social security, and tax obligations); (5) existence of collective or individual working-hours agreements; (6) documentation of terminations over the past five years. Liabilities identified during due diligence typically feed into price-adjustment calculations or post-closing indemnification clauses.Ler artigo completo

In a voluntary resignation, the employee takes the initiative: they do not receive the 40% "FGTS" penalty (the additional payment owed by the employer on top of the severance fund balance), lose the right to unemployment insurance, and must serve out the notice period. In a mutually agreed termination — art. 484-A of the CLT (introduced by Law 13.467/2017) — the "FGTS" balance is released with a reduced 20% penalty, the employee receives half of the notice-period pay and half of the additional indemnity, but has no access to unemployment insurance. A mutually agreed termination requires a written instrument signed by both parties and is useful when both sides want to end the relationship but the employer does not wish to bear the full cost of a termination without cause.