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Abrogation agreements at “zero cost”: Risks surrounding the prohibition of waivers?

By 24 Outubro, 2023Novembro 9th, 2023No Comments

With the most recent labor reform, the so-called Decent Work Agenda 2023 (see Law no. 13/2013, of April 3, 2023), the figure of the “prohibition of waiver” came into force for the first time in an express legal manner – the entry into force, in general, dates from May 1, 2023.

The figure of abdicative remission in employment law was already known in Portuguese jurisprudence, especially by the STJ (Supreme Court of Justice); however, the decisions handed down coordinate a meaning applied to specific cases, with particularities that do not agree with a general and abstract law – or, with a general prohibition determined by law (see the new article 337, no. 3, of the CT (“Labor Code”).

The new law (the aforementioned Article 337(3) of the CT) then states that:

The employee’s claim referred to in paragraph 1 shall not be extinguishable by way of waiver, except through a court settlement.

Paragraph 1 of the same article states that:

An employer’s or employee’s claim arising from an employment contract, its breach or termination shall be time-barred after one year from the day following that on which the employment contract ended.

The waiver of claims (or waiver contract) basically aims to ensure that the parties waive possible or actual contractual claims and has emerged in conjunction with the well-known declarations of discharge.

Thus, the prohibition on waiving employment claims is limited to the employee’s position. This means, in theory, that: (i) the employee may still enter into waiver agreements for non-employment claims; (ii) the employer may waive both employment and non-employment claims.

There also seems to be no obstacle to recognizing the fulfillment of the obligations assumed by the parties, as fulfillment of legally relevant duties and obligations.

Furthermore, this may give rise to important legal presumptions in the area of remuneration and final accounts (e.g. arts. 349(5) and 366(4) and (5), both of the CT). In fact, the payment of a claim (labor or otherwise), followed by an acknowledgment of full compliance with an existing obligation (which is then to be recognized as extinguished), gives rise to a natural or judicial presumption of compliance – it will then be up to the counterparty to overcome this presumption by proving the contrary.

At this point, is it possible to draw up “zero cost” agreements to revoke the employment contract?

In some more closed sectors, this is essential, especially those whose professional activity seriously depends on the image and commercial trust that the company conveys to the outside world (e.g. the banking sector).

Imagine the case of a bank worker who commits theft and who, once the employer is aware of it, the parties want to conclude a peaceful withdrawal agreement, at “zero cost”, with bilateral confidentiality – the aim of which is: (i) on the one hand, not to spread the case abroad, damaging the employer’s image and (ii) not to initiate disciplinary action and not to tarnish the worker’s CV, or not to allow, at the limit, a certain blacklist of workers in the sector. Typical: everyone goes about their business, without further ado.

Are the parties willing to take the risk of concluding revocations at zero cost with the new ban? Is it not to be expected that there will be an increase in litigation and labor disputes? Is it beneficial for the parties to subject themselves to the media (internal or external to the organization)? For the employee, is it beneficial to be subjected to disciplinary action (from start to finish), with the application of the respective disciplinary sanction and consequent risks on the job market?

Labor law in practice differs from the lessons of the academy and seeks to solve problems of everyday labor relations. One wonders, therefore, whether the legal mechanism adopted hasn’t gone too far.

Experience will certainly tell us.

Tiago Sequeira Mousinho @ DCM | Littler