Brazilian court orders end to six-month customs auditors’ strike

SAO PAULO (ICIS)–A Brazilian judge has ordered customs workers to end their nearly seven-month strike after the government argued the industrial action was causing financial harm as goods pile up at ports and customs facilities across the country.

The prolonged strike has significantly disrupted Brazil’s customs operations, affecting imports and exports at major ports including Sao Paulo state’s Santos, Latin America’s largest, with companies working with perishable goods and time-sensitive materials experiencing the largest impact.

Superior Court of Justice judge Benedito Goncalves also imposed a daily Brazilian reais (R) 500,000 ($89,800) fine on Sindifisco, in case of non-compliance. Moreover, the judge ordered an end to what can be perceived as standard operations, but in which auditors carry out their duties slowly, as part of their industrial action.

“Although the Constitution guarantees the right to strike for public servants, it also protects the public interest by ensuring the continuity of essential services,” the ruling said, as cited by state-owned news agency Agencia Brasil.

If confirmed, the order would put an end to a strike which started in November 2024 and which workers had just doubled down on in early June, expanding the areas where they would not be carrying out audits.

The chemicals and fertilizers industries, as well as many other industrial sectors, were growing concerned about the industrial action and its long-term impact, not least because the Federal Revenue is currently implementing a new simplified import system, the last phase of which is to occur in the second half of 2025.

THE LONGEST STRIKE
Employees at customs points started their protest in earnest in mid-2024, first with partial stoppages or other type of pressure action. However, talks with the government on what they deem poor salary increases never made any meaningful progress.

Then, in November 2024, the strike which has been legally ended now started. Employees say they have had just one pay rise since 2016 – that Lula granted them in 2023 soon after taking office, a 9% increase, which would be far from enough to regain the loss of purchasing power. They also demand full payment of the efficiency bonus.

Since talks with the government were going nowhere by May, employees doubled down the pressure in early June, calling a five-day “zero clearance period” in which practically any non-automative checks would not be carried out.

The government quickly filed a case on 3 June deeming the latest move illegal, as it would be harming the state’s constitutionally mandated provision of essential services.

Additionally, the prolonged strike was casting a financial shadow over the state’s ability to collect taxes.

As the cabinet tries to reconcile cutting the fiscal deficit and expanding the welfare state, Finance Minister Fernando Haddad said in parliament in May the strike was high up on the list as one of the causes for its ministry to have to re-work the national accounts as tax proceeds are now to be lower than initially expected.

“This volume of contingency [lower revenues] is because some circumstances occurred after the Budget was submitted. These are facts that need to be evaluated: The first fact is that there was no compensation for the payroll tax relief,” said Haddad, as quoted by state-owned Agencia Brasil.

“The second problem is the partial shutdown of the Federal Revenue service, which affects the performance of the [tax] collection.”

THE END – OR NOT
However, Sindifisco published a statement on Saturday saying that “to date” it had not been formally notified of the court’s decision.

Sindifisco had not responded to a request for comment at the time of writing.

“Since 3 June, when the Union [state] filed a request to declare the tax auditors’ strike, the union’s legal department has been working non-stop to take appropriate actions, such as those that have already been carried out, but also in defining strategies and possibilities for action in the legal field,” said Sindifisco.

“The [union’s] national directorate states that the strike of tax auditors is legitimate and follows all the provisions of the relevant legislation.”

($1 = R5.56)

Front page picture source: Brazil’s Federal Revenue press services

Additional reporting by Bruno Menini