Embraer will pay BRL 22 million to settle a three-decade labor lawsuit

Brazilian aircraft manufacturer Embraer has reached an agreement with the metal workers’ union in São José dos Campos, in the state of São Paulo, where one of its main plants is located, to end a 32-year labor lawsuit. 

The deal, signed on Tuesday after a conciliation hearing, requires the company to pay BRL 21.91 million (USD 4.4 million) to 263 former employees for not enforcing a salary increase agreed upon in a collective agreement in 1990. The workers’ wages should have been raised by 71.58 percent in November 1990 and by a further 7.69 percent in December of that same year.

The size of the increase was due to hyperinflation at the time. It was only in June 1994, during the government of Itamar Franco, the president who succeeded Fernando Collor de Mello after his impeachment, that the Real Plan was launched. This new monetary policy aimed at controlling inflation and smoothing the exchange rates that pressured the country’s high external debt. It brought results by the end of that decade, when inflation — which had been as high as 2,400 percent in the early 1990s — dropped to 9 percent in 1999.

Over the last three decades, Embraer has signed individual and collective agreements with other former employees, but not all of them had received their dues, hence the agreement obtained through judicial channels now.

Former employees whose names are not included in the latest ruling but can prove they are entitled to compensation have one year to challenge the court. The amounts to be received by the 263 former employees already named range from BRL 7,278 to BRL 174,392.

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