Pejotization and the reconfiguration of labor relations in Brazil: Contractual autonomy, the primacy of reality principle, and the limits of labor flexibilization

Abstract

The article analyzes “pejotization” within the context of transformations in Brazilian Labor Law, intensified by the 2017 Labor Reform and the expansion of contractual freedom. The central problem consists of investigating whether hiring workers as legal entities constitutes a legitimate exercise of private autonomy or represents labor fraud aimed at concealing an employment relationship and suppressing fundamental rights. The objective is to examine the legal nature of “pejotization” in light of the defining elements of the employment relationship set forth in Arts. 2 and 3 of the Consolidation of Labor Laws (CLT), confronting them with the Primacy of Reality Principle and with recent case law from the Supreme Federal Court (STF) and the Labor Courts. The justification lies in the social and legal relevance of the topic, given the significant increase in claims involving the recognition of employment relationships in regional labor courts, as well as decisions by the STF that have prioritized the principles of free enterprise and economic freedom, including general repercussion recognized in Theme 1,389. The development of the study demonstrates that, although there is normative support for atypical contractual arrangements, “pejotization” often transfers risks to the worker, weakens social protection, and impacts the financing of social security. The methodology adopted is qualitative, exploratory, and descriptive in nature, based on bibliographic, documentary, and jurisprudential research, with a critical analysis of legislation, doctrine, and judicial precedents, in order to identify the criteria used for recognizing or dismissing the employment relationship and their social and institutional impacts.