One of the most important issues related to collective labor law is the stability of those who are engaged in class representation, which covers not only employees linked to labor unions, but also those who are part of cooperatives.

Although the corporatist movement has its origins in the Industrial Revolution, it was only introduced in Brazil around the 1900s. The first law on the subject appeared in 1907, with Decree 1,637/1907, which regulated both labor unions and cooperatives.

The regulation of labor unions evolved over the years and, in 1943, was included in the Consolidated Labor Laws (CLT), whose provisions related to the topic aimed not only to regulate and thoroughly provide for the rules of labor union organization, but also to protect union employees, in order to guarantee the right to claim by workers.

As one of the measures (Article 543, paragraph 3, of the CLT), the dismissal of unionized employees is prohibited as of the moment of registration of their candidacy for a position of direction or representation of a union entity until one year after the end of their term of office.

Cooperatives, in turn, remained outside the CLT and were subject to few legislative changes in the following years. It was only in 1971, almost 30 years after the CLT came into effect, that Law 5,764/71 (Cooperative Law) was enacted, definitively bringing cooperativism into the Brazilian legal system. Article 55 of the law conferred to the officers of these companies the same guarantees assured to labor union leaders by article 543 of the CLT, among them, stability.

Although the wording of the law leaves no doubt regarding the prohibition on dismissal of officers of a cooperative, stating that the only requirement is that the cooperative be a cooperative set up by the officers themselves, the issue is quite controversial and has been widely discussed in the labor courts.

As already established by legal scholarship and case law, the purpose of the stability granted to union leaders is precisely to guarantee the effectiveness of union representation. This means enabling workers to run for and be elected freely by their peers to represent a category, in order to claim better working conditions without suffering any kind of retaliation from employers.

It so happens, however, that this premise cannot be applied indiscriminately to the officers of cooperatives of any kind, since not all of them are created with the same purpose of protecting and developing the category, like with labor unions.

According to the Anuário do Cooperativismo Brasileiro [“Yearbook of Brazilian Cooperativism”] published in 2021, Brazil had 4,868 cooperatives in 2020, of which only 685 were in the labor and employment segment, whose purpose is to promote courses for professional improvement and help workers relocate and search for vacancies.

In other words, only 14% of the existing cooperatives in 2020 had the purpose of promoting better conditions for the category. The other almost 86% were destined for the consumption of goods and services, transportation, and other activities unrelated to the protection of workers.

Thus, recognition of the stability of any and all cooperative officers indistinctly, without concern for the nature and purpose of the cooperative to which they are linked, completely distorts the objective of the rule, encouraging the fraudulent creation of entities solely and exclusively with the purpose of obtaining stability for their officers.

The issue is subject to divergence among courts. If previously the Labor Court's case law adopted, in its majority, a more conservative position on the granting of stability to cooperative leaders based solely on article 55 of Law 5,764/71, today there is a growing body of case law that recognizes the need for a more careful analysis of the institution's objectives before endorsing the stability of the officers. A recent decision issued by the 4th Panel of the Superior Labor Court was precisely to this effect.

In the case, the stability of an officer elected to a consumer cooperative was at issue. The Court of Appeals for the 17th Circuit had already rejected the request for recognition of stability of the former employee in view of the fact that the cooperative aimed to retail construction materials in general so that its members could get better prices on products. In other words, the actions of the entity's officers, including the plaintiff, were not intended to defend or represent the interests of the members of the professional category. Therefore, there was no justification for recognizing stability.

With the same understanding, the 4th Panel of the TST upheld the dismissal of the claim. According to the decision drafted by Justice Caputo Bastos, the "right to stability is not a personal guarantee of the cooperative officer or results from the mere fact that he occupies this position, but a prerogative granted to the professional category, so that the officer is able to defend the interests of the member workers.

Although some decisions have recognized stability on the argument that article 55 of the Cooperative Law does not restrict the stability to a certain type of cooperative, the law cannot be applied indistinctly, without any kind of interpretation, especially when we are facing a norm that establishes a restriction on a right legally provided for.

This is precisely the case with the rules that confer stability on certain types of employees. They restrict the employer's directive power, conferred by article 2 of the CLT, as well as the principle of economic freedom, preventing the company from exercising a basic prerogative of the employment relationship: contractual termination without cause.

This restriction is admitted in view of the fact that stability is usually granted in specific situations, in which the employee is in a position of extreme vulnerability in relation to the employer.

For this reason, it is vital that the Judiciary exercise moderation when analyzing the issue so that the stability granted to cooperative officers in an unrestricted manner does not end up violating the employer's directive power and trivializing the purpose of the rule, discrediting the legitimate holders of the right.