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Unanimous Decision of the 1st Panel of the Superior Labor Court Confirms That the INSS on Indemnified Prior Notice Should Not Be Collected, Reinforcing the Indemnifiable Nature of the Item and Creating a Potential Impact of Billions of Reais in Similar Judicial Disputes
The decision of the Superior Labor Court (TST) to eliminate the collection of INSS on indemnified prior notice represents a significant milestone for companies and workers throughout the country. The 1st Panel understood that the payment does not have a salary character, but rather an indemnifiable one, as it does not result from service provision, and therefore cannot be included in the calculation base for social security contributions.
The case involved a salesperson from Belo Horizonte who, in 2014, took the Labor Court, seeking recognition of an employment relationship and payment of various items, including the indemnified prior notice. In 2018, an agreement was reached between the parties, approved by the 20th Labor Court of the capital of Minas Gerais. Months later, the Union attempted to collect from the company the social security contribution on the amount paid, arguing that it was part of the salary base for contributions.
Divergence Between Instances: From TRT to TST
The Regional Labor Court of the 3rd Region (MG) accepted the Union’s request, citing case law that considers indemnified prior notice as part of the salary base following Decree 6,727/2009.
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For the TRT, even when not worked, the period should count as service time for all purposes, including the incidence of INSS.
However, when analyzing the company’s appeal, Minister Dezena da Silva, the reporting minister at TST, was categorical: the indemnified prior notice does not result from labor activity, nor from time made available to the employer, but from a compensation for contract termination.
Therefore, it cannot be treated as salary for social security purposes, according to Article 28 of Law 8,212/91. The decision was unanimous among the panel’s ministers.
Indemnifiable Nature: The Central Point of the Decision
By reinforcing the thesis of the indemnifiable nature, the TST emphasized that the collection of INSS on indemnified prior notice distorts the logic of social security contributions, which aim to apply to earnings derived from services actually rendered.
This differentiation had already been discussed in lower courts, but the expression from the Superior Court consolidates an understanding that may influence thousands of similar processes across the country.
For companies, the decision means a reduction in labor costs in future litigation.
For the Union, however, it represents a risk of significant revenue loss, as substantial amounts cease to contribute to the social security base.
This is, therefore, a billion-dollar precedent capable of generating a cascading effect in various disputes.
Impact on the Market and on Labor Justice
The TST’s decision not only creates a new benchmark for judicial actions involving companies and workers but may also provoke changes in how contracts and terminations are conducted.
Experts believe that, by standardizing the understanding, the court tends to reduce legal uncertainty on the topic and avoid contradictory decisions between the regional labor courts.
However, there are still open debates.
Some legal scholars argue that the 2009 decree indicated precisely the opposite, expanding the base of incidence for INSS.
Others believe that, in the name of legal certainty and the coherence of the social security system, the thesis of pure indemnification, without a salary nature, prevails.
The ruling of the 1st Panel of the TST on the INSS on indemnified prior notice may mark the beginning of a new phase in Labor Justice, opening space for companies to contest similar charges and for the Union to reevaluate its revenue strategy.
The economic effect, if consolidated, will be of billion-dollar proportions.
And you, what do you think? Does this decision ensure justice by recognizing the indemnifiable nature of prior notice, or could it weaken the financing of social security? Leave your opinion in the comments — we want to hear from those who experience the impacts of this precedent in practice.
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