Justice orders Casas Bahia to reverse dismissals; see what the employees are like

Casas Bahia store, at Shopping Piedade, in Salvador Alan Oliveira/g1 The Labor Court ordered the Casas Bahia Group to provisionally reinstate the contracts of workers laid off during the new round of cuts carried out in August. The decision also suspends the effects of collective layoffs made as part of the company's restructuring plan. The injunction was granted on Tuesday night (18) by judge Katarina Roberta Mousinho de Matos, from the 11th Labor Court of Brasília. The judge partially responded to a request from the National Confederation of Commercial Workers (CNTC). In addition to ordering the provisional return of workers, the judge prohibited Casas Bahia from carrying out new mass layoffs related to the so-called "Phase 2" of the Transformation Plan without the prior participation of the unions. Casas Bahia Group requests judicial recovery The decision comes amid the retailer's worsening financial crisis. Two days earlier, on August 16, the Casas Bahia Group had requested judicial recovery to renegotiate around R$17.3 billion in debt and maintain operations. The action was filed by CNTC after the restructuring announced by the company in August. According to the entity, the process involved the closure of 298 stores across the country and a series of layoffs without the prior participation of the unions. When analyzing the case, the judge pointed out that documents presented by Casas Bahia itself indicate that the closure of stores and the reduction in staff are part of the same reorganization strategy, called "Transformation Plan – Phase 2". For the judge, there are signs that a far-reaching collective dismissal occurred without the prior participation of the unions. This point is important because the Federal Supreme Court (STF) decided, in 2022, that collective layoffs require the prior participation of trade unions. The judge highlighted, however, that the analysis is still preliminary. The company will have the opportunity to present its defense and documents that may change the understanding adopted at this stage of the process. What will Casas Bahia have to do? The company will have five days, after being notified, to reestablish the employment of workers affected by layoffs carried out on August 13th and 14th, as well as layoffs made up to August 17th that are related to the same collective operation. In practice, workers must return to the payroll and have their benefits linked to their employment contracts again. Health plans that have been canceled due to layoffs must also be reactivated within 48 hours. The decision, however, does not determine the reopening of the almost 300 stores closed by the company. Employees may be reassigned to other units or structures within the company. They may also remain on leave, but will continue to receive remuneration while the decision is in effect. Casas Bahia will still have to present information to the Court about the restructuring process, such as the list of closed stores, the number of workers laid off in each unit, the criteria used for the cuts and the union entities involved. But why do unions need to be heard? This is one of the main points of the decision. In 2022, the STF established that a company does not need authorization from the union to carry out collective layoffs. But the union entity needs to be involved in the process beforehand. This means that the company can decide to reduce its workforce, but must notify the unions and open space for negotiation before putting the measure into practice. Union participation, according to the decision, does not give unions veto power over cuts. In other words: Casas Bahia may decide to reduce its staff even after negotiation. What the Court considered necessary, at this moment, is that this stage of dialogue occurs before new collective dismissals. Financial crisis has worsened in recent years The decision comes at the most delicate moment of the company's financial crisis. In the request for judicial recovery presented to the São Paulo Court, the Casas Bahia Group stated that it was facing the worst financial crisis in its history. The company attributes the difficulties to the prolonged period of high interest rates, the increase in defaults, the drop in consumption of durable goods and changes in consumer behavior. According to the company, the restructuring process began in 2023. That year, 55 stores considered unprofitable were closed and around 8,600 jobs were eliminated. The situation worsened in 2026. According to the request for judicial recovery, in August alone the company closed almost 300 stores and laid off approximately 3,000 workers as part of the effort to reduce expenses and reorganize finances. Considering the two stages of restructuring, the retailer claims to have closed the activities of around 355 stores and eliminated approximately 11,600 jobs since the beginning of the process. Despite the cuts, the company claims that it remains economically viable. According to the petition presented to the Court, the group still has more than 20 thousand employees and more than 700 stores in operation in the country. Another point analyzed by the judge was the request for judicial recovery presented by Casas Bahia on August 16. The request occurred just two days after the period identified in the labor action as the main moment of collective dismissals. According to the decision, judicial recovery does not prevent the Labor Court from analyzing whether the dismissals followed the rules applicable to collective dismissals. Therefore, the judge determined that the court responsible for the judicial recovery process in São Paulo be informed about the labor decision. The measure seeks to allow cooperation between the two processes. The decision still does not end the discussion about the layoffs. The injunction was