In a recent decision, the Brazilian Supreme Court (STF) ruled that compensation for moral damages in labor cases can exceed the limits set by the Consolidation of Labor Laws. The debate regarding the use of these limits as a reference or cap has been ongoing in the Labor Court since the labor reform in 2017.

Since the 2017 Labor Reform implemented parameters for determining compensation, there has been a significant debate within the Judiciary regarding whether these values should be considered a ceiling or a guiding principle for valuing judgments against.

According to the Labor Code, the values are as follows:

• mild offense: up to 3 times the victim’s salary;
• moderate offense: up to 5 times the victim’s salary;
• serious offense: up to 20 times the victim’s salary;
• very serious offense: up to 50 times the victim’s salary;
• in case of recurrence, the values can be doubled.

In the judgment concluded on 26 June 2023, it was determined that those values should be used as guiding principles rather than a strict ceiling. The rapporteur of the cases at the Supreme Court, Minister Gilmar Mendes, advised that the values stipulated in Articles 223-G and subsequent ones of the Labor Code (CLT) be employed solely as “guiding criteria” by the Labor Court. It is possible to determine a judicial compensation for moral damages in amounts exceeding the maximum limits established, considering the specific circumstances of the case and the principles of reasonableness, proportionality, and equality.