Roughly 3,000 workers laid off by Brazilian retailer Grupo Casas Bahia have still not received their severance pay, more than a month after the dismissal wave that preceded the company's judicial recovery, a court-supervised debt restructuring similar to Chapter 11. According to G1, the money is blocked because the company listed the laid-off workers as creditors in the case, and former employees also report trouble accessing the FGTS, Brazil's mandatory severance savings fund, and unemployment insurance as of Tuesday.
The sequence began on August 13, when the group started mass layoffs and the closure of 298 stores across the country. Staff numbers had already fallen from 41,866 employees in 2023 to 30,117 in mid-2026, a drop of about 28%, according to InfoMoney. On August 16, the company filed for judicial recovery to renegotiate debts estimated at 17.3 billion reais. Company documents in the case point to about 3,000 dismissals in this round; the National Confederation of Commerce Workers (CNTC) puts the number near 1,900.
What the labor court decided
On August 19, Judge Katarina Roberta Mousinho de Matos of the 11th Labor Court of Brasilia suspended the collective dismissals because there had been no prior union involvement, applying precedent 638 of Brazil's Supreme Federal Court, which requires union intervention before mass layoffs. According to InfoMoney, the injunction ordered the provisional reinstatement of employment contracts, the return of affected workers to the payroll and, within 48 hours, the restoration of health plans and welfare benefits canceled because of the layoffs. It set a fine of 500 reais per dismissed worker if the company failed to comply within five days.
The inspector general of the Labor Court, Justice José Roberto Freire Pimenta, later denied a company request to overturn the injunction, which remains in force and also conditions any new collective layoffs on prior union involvement. The group is waiting for the 10th Regional Labor Court (TRT-10) to review its appeal, with no date set.
In the creditors' line
Under the CLT, Brazil's labor code, severance must be paid within 10 days of the end of a contract. The recovery filing moved the workers' claims into Class I of creditors, the category for labor claims, which has priority over other debts. Because credits generated before the filing can be folded into the payment plan, workers will only be paid under the schedule the court approves.
"The worker joins the line of creditors and waits for the payment plan to be defined. Many do not even know how much they are owed or when they will get it," said João André Vidal de Souza, who represents the CNTC. The confederation is asking that severance be kept out of the restructuring's creditor regime and paid as a priority.
Among those affected, the accounts point to widespread delay. Former saleswoman Talita Magalhães, 42, who worked at the chain for eight years, said she received the key to withdraw her FGTS balance but not her severance or the 40% FGTS penalty owed to dismissed workers. She said the company health plan was canceled and former colleagues are still being billed for purchases made through the employee installment plan. "The 10 days passed and nobody got anything. We got no explanation and were left completely in the dark," she said.
In a statement to G1, Grupo Casas Bahia said the rights of dismissed workers remain guaranteed and that severance amounts now follow the rules and procedures of the recovery process. The company said it has provided guidance on unemployment insurance and FGTS withdrawals. The next step in the dispute over the validity of the layoffs is the ruling on the appeal at the TRT-10, which has no date yet.