TST Decision Ensures That Indemnified Notice Period Is Included in the Calculation of Profit Sharing. Understand the Impacts for Companies and Workers.
A recent decision by the Superior Labor Court (TST) definitively changed how companies must calculate profit sharing (PLR). In a session held on June 30, 2025, the Court decided that the period of the indemnified notice must be considered in the calculation basis for the benefit, enhancing workers’ rights and bringing more clarity for employers.
What Is Profit Sharing and How Does It Work
Profit sharing is an incentive regulated by Law 10.101/2000 and the Federal Constitution.
It is an optional benefit that can be negotiated through agreements or collective conventions, with criteria based on goals, productivity, or revenue.
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In practice, PLR is a form of bonus that recognizes the worker’s effort in the company’s growth.
When provided for in a collective agreement, it must be paid proportionally to the time of service rendered during the year.
The Controversy Over Indemnified Notice Period
For years, there was a divergence between regional courts regarding whether the indemnified notice should be included in the calculation of profit sharing.
Many employers argued that since there was no service rendered during this period, it would not be fair to count it.
This interpretation, however, was eventually questioned, as Article 487 of the CLT and the jurisprudence of the TST itself have always indicated that the notice period — even if indemnified — is part of the employment contract for all legal purposes.
What the TST Decided
With the new decision, the TST’s Plenary unanimously established that the indemnified notice must count towards the calculation of PLR.
The ruling was made under the system of repetitive appeals, meaning the decision becomes mandatory for all courts in the country.
In addition to reaffirming previous understandings, the TST settled a topic that generated legal uncertainty, preventing employees and employers from facing lengthy and exhausting disputes in Labor Court.
What Changes for Companies and Workers
Companies that already have profit sharing programs will need to review their internal regulations and adjust the clauses in collective agreements to expressly include the indemnified notice in the calculation.
It will also be necessary to accurately provision the amounts in terminations to avoid future labor liabilities.
For workers, the decision represents a significant victory.
Those who are dismissed without just cause will be entitled to receive PLR proportionally, also considering the projection of the notice period.
If this period is disregarded by the company, it will be up to the employee to question the human resources department or seek legal advice.
A Step Further in the Valorization of Labor
The uniformity of understanding by the TST strengthens legal certainty and ensures equal treatment throughout the country.
More than just a matter of calculation, the decision reinforces the role of profit sharing as a tool for valuing labor and promoting productivity.

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