The Special Labor Payment Plan was not created recently because of the pandemic crisis we went through. However, it can be an interesting tool to get through these times of crisis.
The so-called PEPT is included in the Consolidation of the Provisions of the General Corregedoria da Justiça do Trabalho, in its articles 151 to 153. The PEPT’s objective is to allow the equitable payment in installments of a company’s labor debts on behalf of a group of creditors. For this reason, it has already been dubbed the “labor recovery plan”.
The PEPT application must be filed with the competent body, as defined by each court’s administrative organization and, in the absence of an express provision, directly with the central enforcement court.
Through the PEPT, companies can seek the installment payment of their labor liabilities, in order to preserve the continuity of economic activity and the maintenance of active labor contracts.
The installment payment of debts established in the PEPT can be fixed in variable periods and amounts (including the estimate of interest and monetary correction until it is fully paid), respecting the maximum period of 3 (three) years for full payment of the debt.
In order to adhere to PEPT, interested companies must meet certain requirements, among which is that all the companies in the economic group and their respective partners are aware that they will be held jointly and severally liable for the payment of the obligations related to the global amount obtained in the collection of executions before the Court, regardless of whether, at any stage of the proceedings, they were part of the defendant.
Both the company that proposes the PEPT, and the other companies in its economic group, are prevented from requesting a new PEPT for twenty-four (24) months.
Other requirements for PEPT are:
- specification of the total amount of the debt, instructing the request with the list of processes in definitive execution phase, the values and nature of the respective debts, duly updated;
- presentation of a payment plan for the consolidated labor debt, including an estimate of interest and monetary correction until it is fully paid;
- assume the commitment to regularly fulfill the labor obligations of the current contracts, including those arising from severance pay due to dismissed or resigning employees;
- offer a sufficient asset guarantee to meet the established conditions, which may consist of a bank guarantee letter or insurance guarantee, as well as its own assets or those of the partners;
- presentation of a balance sheet, duly certified by an accountant, as well as an income tax statement, proving financial inability to pay the consolidated debt, effectively compromising the continuity of the economic activity;
- presentation of a waiver of any and all objections, appeals, or incidents regarding the processes involved in the plan presented.
The PEPT is restricted to the execution processes listed in the application, and no new processes may be included.
Once the procedure is initiated, the competent body must: (i) fix the duration and the amount to be paid periodically; (ii) establish a penalty clause for delay, if necessary; (iii) provide for the distribution of the collected amounts; and (iv) indicate the judicial process that will serve as a pilot for the practice of jurisdictional acts after the approval of the PEPT, in which all acts related to the plan’s compliance will be concentrated.
The plan will be approved by the Full Court or Special Organ. As from the approval of the plan, all executions related to the PEPT are suspended.
Non-compliance with any condition established in the PEPT implies its revocation, as well as the prohibition of a new plan for two years, in addition to the instauration of a Special Enforcement Regime (REEF) for the expropriation of the debtors’ assets for the benefit of the collectivity of creditors.
The above text is not exhaustive and does not represent or replace a specific recommendation from an analysis of the case. DDSA Advogados will be available to guide its clients.