Brazil Court Orders Retailer Casas Bahia to Rehire Workers
Brazil · Business
A day later. A second judge in Sao Paulo gave the chain only part of the shelter from creditors it had asked for.
A labor judge in Brasilia has ordered Casas Bahia, Brazil’s best-known furniture and appliance chain, to reverse its August mass layoffs. The company must put the dismissed staff back on the payroll within five days.
Because it filed for court protection from creditors days earlier, the retailer is now fighting on two fronts at once.
What the Judge in Brasilia Ordered
The injunction came on the evening of Tuesday, August 18, 2026. Judge Katarina Roberta Mousinho de Matos, of the 11th Labor Court of Brasilia, signed it.
She suspended the effects of the collective dismissals and ordered the contracts provisionally restored. In addition, health plans and other assistance benefits cancelled because of the firings must be switched back on within 48 hours.
The court gave the company five days from formal notice to return the staff to the payroll. That clock started once the ruling was served.
Why the Layoffs Were Blocked
Brazilian law treats mass firings differently from ordinary ones. Under a Supreme Court precedent known as Tema 638, a company must talk to the unions before it dismisses a large group.
The judge found that step missing. As a result, she froze the round rather than cancelling it outright.
Leaving the door open for the company to redo the process properly. The rule is about process, not permission.
Unions have no veto, and no collective agreement has to be signed, yet the talks must genuinely happen first.
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What Grupo Casas Bahia does.Grupo Casas Bahia S.A., together with its subsidiaries, operates as an omnichannel retailer in Brazil. The company provides consumer electronics, home appliances, furniture, and other domestic items. It also engages in the manufacture, industrialization, and sale of wood-based furniture; ownership and management of equity interests; management of logistics operations; and provision of…
Who Brought the Case
The action was filed by the CNTC, Brazil’s national confederation of commerce workers. It is an umbrella body for retail unions across the country.
The confederation argued that the cuts were pushed through without the bargaining the law requires. Therefore it asked for an urgent order, and it got one the same week.
How Many Workers Casas Bahia Must Take Back
The decision does not name a single headcount. Instead, it covers everyone dismissed on August 13 and 14.
Plus later exits through August 17 that formed part of the same operation. That leaves two competing tallies.
The CNTC counts about 1,900 people cut on those two days. While Casas Bahia told the bankruptcy court that roughly 3,000 jobs went during the August round.
So the true number sits somewhere between the two. It will only be fixed once the company files its own list with the court.
The Fines Attached to the Order
The penalty is not a lump sum. If the company misses the deadline, it owes R$500 a day for each affected worker.
Roughly US$97 at the August 19 rate of R$5.17 to the dollar. That amount is capped, at least for now, at the equivalent of ten months of pay per employee.
Even so, spread across thousands of people it adds up quickly. A second penalty covers fresh cuts.
Any new Phase 2 dismissal made without prior union involvement carries a fine of R$10,000, about US$1,930, per worker.
A Second Courtroom, a Second Ruling
The very next day the story moved to Sao Paulo. On Wednesday, August 19, Judge Taina Maria Leonardo de Oliveira, of the city’s 2nd Bankruptcy and Judicial Recovery Court.
Ruled on the company’s plea for shelter from creditors. She granted the emergency requests only in part.
Crucially, she did not yet admit the reorganization itself, so the full protection the retailer wants is still pending.
What Sao Paulo Granted and What It Held Back
The judge barred the group’s roughly 28,000 creditors from calling in contracts early purely because a recovery request had been filed. Suppliers must also deliver goods already in transit to stores and distribution centres.
In addition, essential contracts must keep running. That list covers water and power utilities, technology and security providers, and the leases on the shops themselves.
She also blocked unusual seizures of receivables outside the normal contract flow. Breaching any of these points carries a fine of R$50,000 a day, close to US$9,700.
The limits matter as much as the grants. She set no end date for the shelter.
Yet ruled that the time used will be deducted from the 180-day freeze the company would get if the reorganization is admitted.
An Inspection Before Anything Else
Before deciding whether to admit the case, the judge ordered an on-the-ground check. A court-appointed administrator must verify that the group really operates as its filing describes.
The report is due within 30 days. Meanwhile, the company has ten days to hand over paperwork it left out of the original filing.
Three Years of Shrinking
August was not the first round. The transformation plan launched in 2023 closed 55 loss-making stores and removed about 8,600 posts.
This month added 298 store closures and, by the company’s own count, about 3,000 more jobs. Taken together, that is roughly 11,600 positions and around 355 shops gone since 2023.
Folha de S. Paulo, working from quarterly filings, puts the staff cut at 11,749 people, or 28 percent of the workforce.
Headcount fell from 41,866 in June 2023 to 30,117 by mid-2026.
The Debt Behind the Crisis
The reorganization filing lists about R$17.3 billion in debt, near US$3.35 billion. It names roughly 28,000 creditors.
The biggest single claim belongs to insurer Zurich Minas Brasil, at R$1.97 billion. An investment fund is next with R$1 billion, followed by Samsung’s Brazilian unit on R$937.6 million.
Household names fill the rest of the top of the list. Electrolux, Whirlpool, LG and Motorola are all owed hundreds of millions of reais.
What the Company Says
The retailer’s response to the labor ruling was short. It told the news outlet Poder360 that it had learned of the decision and was weighing the terms and its next steps.
An appeal remains available. Nothing so far suggests a higher labor court has touched the injunction, so the five-day clock still runs.
What Happens Next
Two timetables now overlap. The labor deadline is measured in days, while the Sao Paulo court’s inspection runs for up to a month.
For staff, the immediate question is pay and health cover. For suppliers and lenders, it is whether the reorganization is admitted at all.
Shoppers with pending orders sit in between. Until the court rules on admission, the company keeps trading under a patchwork of temporary orders.
Frequently Asked Questions
Which court blocked the layoffs?
The 11th Labor Court of Brasilia, part of the 10th Regional Labor Court, or TRT-10. Judge Katarina Roberta Mousinho de Matos signed the injunction on August 18, 2026.
Is the daily fine R$100,000?
No. The labor injunction sets R$500 a day per affected worker, about US$97. A separate Sao Paulo ruling sets R$50,000 a day, near US$9,700, for breaching creditor-protection measures.
Are 3,000 or 1,900 workers going back?
The order does not fix a number. It covers everyone cut between August 13 and 17 in the same operation.
Has the judicial recovery been approved?
Not yet. As of August 20.
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