The Constitutional Court, in ruling no. 118 of 2025, addressed an important issue for both workers and businesses, intervening on the topic of protections in cases of unlawful dismissals within small enterprises.

With this decision, the Court declared unconstitutional the maximum compensation limit of six monthly salaries, which was previously applied when the employer had fewer than fifteen employees, deeming it inconsistent with the principles of equality and the adequate protection of rights.

This issue is not new.

As early as 2022, the Court had highlighted the problem with the law but had left it to the legislature to intervene.

After more than two years, with no changes made, the Court revisited the matter with a direct and clear ruling. Until now, workers unlawfully dismissed from small businesses could receive compensation between three and six months’ salary, regardless of the severity of the dismissal.

This narrow range prevented judges from properly evaluating each case and tailoring the protection to the specific situation.

The Court has established that this rigid limit does not provide adequate protection, neither in terms of the worker’s dignity nor as a deterrent for improper conduct.

Even in small businesses, compensation should be able to be adjusted based on several factors, including the worker’s seniority, the conduct of the parties involved, the economic size of the company, and the severity of the flaw.

At least for now, the provision for halving the regular compensation remains in force, but without the absolute limit of six months’ salary. This is an important step forward.

Today, many business realities have streamlined structures but significant economic power, and the mere number of employees is no longer sufficient to define the applicable protection.

The Law firm remains available for any further clarification.