Overview

• In a unanimous ruling on Oct. 16, the Supreme Federal Court prioritized sending proceeds from labor public civil actions to the Fundo de Defesa de Direitos Difusos and the Fundo de Amparo ao Trabalhador.
• The funds must ensure traceability of receipts, prohibit budgetary contingency, and individualize amounts received for worker-protection programs.
• Judges may direct resources to case-linked reparations only in exceptional, urgent situations, with a reasoned decision, transparent accounting, and notification to the CNJ and CNMP for oversight.
• The plenary partially upheld an injunction by Minister Flávio Dino and adopted a conciliatory thesis by Minister Alexandre de Moraes interpreting the Public Civil Action Law to allow limited, supervised flexibility.
• The case stems from ADPF 944 filed by the National Confederation of Industry, which sought to bar allocations to entities other than the two designated public funds.