Brazil: The Federal Supreme Court Suspends All Labour Claims that Discuss Hiring Independent Contractors

Authors: Authors: Gabriela Lima, Mariana Fiorotto and Beatriz Marcelino 

The Federal Supreme Court rendered a decision suspending all labour claims that discuss the hiring of independent contractors as self-employed workers or through their legal entities, until the plenary of the Federal Supreme Court judges the matter.

On 14 April 2025, the Federal Supreme Court (“STF”) rendered a decision in the case of Extraordinary Appeal 1.532.603, suspending all labour claims related to recognition of employment relationship of workers hired as independent contractors, either as self-employed workers or through their legal entities, until the plenary of the Federal Supreme Court judges the matter.

The STF recognised the general repercussion of the matter (on Theme 1389), which means that the decision on the merits to be issued by the STF will have to be observed by all courts when deliberating on similar cases.

Minister Gilmar Mendes highlighted that several cases have been filed before the STF seeking to overturn Labour Court decisions that recognised employment relationships of workers hired as independent contractors, which did not follow the previously established guidelines of the STF on the matter. These several cases have overburdened the STF and created a scenario of legal uncertainty.

In addition to analysing the legality of hiring independent contractors, the STF will also address the competence of the Labour Court to judge cases involving allegations of fraud in civil/commercial contracts, which are the contracts used when hiring independent contractors. Furthermore, the STF will deliberate on the burden of proof related to fraud allegations, specifically whether it should rest with the independent contractor or the contracting company.

This subject is of utmost importance for businesses, as it may impact not only the current hiring practices of the companies and the dynamics of the labour market but also potential labour liabilities.

Key Action Points for Human Resources and In-House Counsel

• Verify any ongoing labour claims regarding the matter to evaluate the impact of the STF’s decision;
• Monitor the outcomes of STF’s decision closely as this will shape future practices; and
• Review hiring practices and existing contracts with independent contractors depending on the outcome of the STF’s decision