Sources of regulation
The Constitution [1] is the primary source of labour law in
Mexico. Art. 123 lists comprehensive labour and social rights. In
this regard, art.123(A), clause XXII, grants the following rights
to employers and workers of the private sector:
Any employer who fires a worker in an unjustified
way, because of such worker’s affiliation to a union or because of such worker’s
participation in a lawful strike, shall, according to the employee’s will,
fulfil the respective labour contract or compensate the affected worker with
no less than the amount of money equivalent to the wages earned during three
months of work. The law shall establish the cases in which the employer can
be exempted from fulfilling the contract by compensating the affected worker.
The worker will also be entitled to receive a compensation equivalent to
the wages earned during three months of work when his/her separation from
work is derived from either the employer’s dishonesty or the abuses committed
by the employers against him/her or against the worker’s husband, wife, parents,
daughters, sons, sisters or brothers. The employer shall never be exempted
when such abuses has been committed with his/her consent by a relative or
any other dependant
The Federal Labour Act (hereinafter – “FLA”) of 2 December 1969 (which came
into force on 1 April 1970) constitutes the main source on the right to work
and is supported by regulations, ratified treaties and international Conventions
made in accordance with the provisions of art. 133 of the Constitution
and supplemented by the case law of the Supreme Court, collective agreements
and work rules (arts. 422-425, FLA).
Scope of legislation
Following the principles of art. 123(A) of the Constitution, the
Federal Labour Act governs the employment relationship of “workers, employees,
domestic workers, craftspersons and in general to all contracts of employment”.
In accordance with art. 123(B) of the Constitution, public employees
are excluded from the Labour Act and are subject to separate regulations
(which were adopted by Federal Act of 27 December 1963).
Workers in positions of trust, seafarers, flight crews, railway workers,
road transport workers, the labour force in zones under federal jurisdiction,
rural workers, commercial travellers, sports professionals, actors, musicians,
home workers, domestic employees, workers in hotels, restaurants, bars and
similar establishments, family undertakings, resident medical doctors during
specialist training and employees of universities and autonomous institutions
of higher learning are subject to the special provisions of the Title VI
of the FLA, which comprises arts. 181 to 353 u.
Contracts of employment
Under the FLA, the term “employment relationship” means, irrespective of
the act from which it originates, the personal performance of work under
the authority of another person in return for payment of remuneration.
“Individual contract of employment” means, irrespective of its form or title,
a contract by which a person binds himself or herself to perform a personal
service for another under his or her management and supervision in return
for payment of remuneration (art. 20, FLA). The existence of a contract
of employment and an employment relationship is presumed between the person
performing a personal service and the person who receives such services (art.
21, FLA).
The employment relationship may be for a specified piece of work or of specified
duration or of unspecified duration. In the absence of any express stipulation,
the relationship is to be deemed to be of unspecified duration.
A contract for a specified piece of work may be made only when such contract
is required by the nature of the work (art. 36, FLA). A contract of
a specified duration may be made only in the following cases (art. 37,
FLA):
- where
the nature of the work to be done so requires;
- when
the contract is to provide a temporary substitute for another employee;
and
- in
the other cases provided for in this Act.
A worker must in no case be obliged to accept employment for more than one
year (art. 40, FLA). There are no provisions in the FLA for the setting
of probationary periods.
Employment relationships for work in mines lacking in minerals capable of
paying the cost of the operation or for the reopening of abandoned or unworked
mines may be for a specified period, for a specified piece of work or for
the investment of a fixed capital sum (art. 38, FLA).
If on the expiry of the specified period the material to be worked still
subsists, the employment relationship continues for as long as this circumstance
continues (art. 39, FLA).
Termination of employment
Under art. 46 of the FLA, the employment relationship may be cancelled
at any time by a worker or an employer having sufficient justification without
thereby incurring liability.
The following constitute sufficient grounds for terminating the employment
relationship without liability for the worker (art. 51, FLA):
- if
the employer or, as the case may be, the employers’ association proposing
the worker’s employment deceives the worker with respect to the conditions
of such employment. This reason for termination ceases to be operative
after the worker has been in employment for 30 days;
- if
the employer, the members of the employer’s family or his or her executive
or administrative staff are guilty in the course of the employment of a
dishonest or dishonourable action, violence, threats, insolence, ill-treatment
or the
like towards the worker, his or her spouse, parents, children or siblings;
- if
the employer, the members of his or her family or his or her employees
are guilty outside the employment of the acts mentioned in the preceding
clause
and the said acts are of such a serious nature as to render continuation
of the employment relationship impossible;
- if
the employer reduces the worker’s wages;
- if
the worker does not receive the wages due to him or her at the time or
in the place agreed upon or fixed according to custom;
- if
the employer wilfully damages the worker’s implements or tools;
- if
the worker’s safety or welfare or that of his or her family is seriously
endangered either on account of the unsatisfactory hygienic conditions
in the establishment or failure to comply with the preventive and safety
measures
prescribed by law;
- if
the employer by his or her inexcusable imprudence or carelessness compromises
the safety of the establishment or of the persons therein; and
- for
reasons similar to those laid down in the preceding items if they are of
equal gravity and entail similar consequences as far as the work is concerned.
The worker may leave his or her employment within 30 days following the
date on which any of the facts mentioned above occurs and is entitled to
compensation from the employer in the manner prescribed (arts. 50 and
52, FLA).
The following constitute grounds for terminating the individual employment
relationship under art. 53:
- by
mutual consent of the parties;
- the
death of the worker;
- termination
of the work or expiry of the period or exhausting of the capital invested
in accordance with the provisions of arts. 36, 37 and 38; and
- the
worker’s physical or mental incapacity or obvious disability making it
impossible for him or her to perform the work (if the incapacity is a result
of an accident
or disease other than an employment injury, the employee is entitled to
payment of one month’s wages plus an extra 12 days’ wages for each year
of service
in accordance with the provisions of art. 162 or to be given at
his or her choice some other work compatible with his or her aptitude in
addition
to such compensation to which he or she may be entitled by law).
The following are grounds for terminating the collective employment relationship
under art. 434:
- force
majeure or unforeseen event not attributable to the employer or the
employer’s physical or mental incapacity or death entails the suspension
of work as an inevitable, immediate and direct consequence;
- the
known and obvious inability of the undertaking to pay its way;
- the
exhaustion of the substance being extracted by a mining undertaking;
- the
cases referred to in art. 38; and
- statutory
declaration of insolvency proceedings or bankruptcy if the competent authority
or the creditors decide on the definitive closure of the undertaking or
the definitive retrenchment of production.
Dismissal
The following constitute sufficient justification for the employer to terminate
the employment relationship without incurring liability (art. 47):
- if
the worker or the trade union which proposed or recommended him or her
deceives the employer by means of false certificates or references attributing
to
the worker abilities, skills or qualities which he or she does not possess.
These grounds for termination cease to be operative after the worker has
completed 30 days’ employment;
- if
the worker in the course of his or her employment commits a dishonest or
dishonourable act, violence, threats or ill-treatment towards the employer
or any member of the employer’s family or the top management or managerial
personnel of the undertaking or establishment, except in the case of provocation
or self-defence;
- if
the worker is guilty of any of the acts mentioned in the preceding clauses
towards any fellow workers and workplace discipline is affected as a consequence
of such acts;
- if
the worker is guilty outside his or her employment of any of the acts mentioned
in the second ground above and these acts are of such a serious nature
as to render the fulfilment of the contract of employment impossible;
- if
the worker in the performance of his or her work or in connection therewith
wilfully causes material damage to the buildings, works, machinery, tools,
raw materials or other objects connected with the work;
- if
the worker causes damage as in the preceding clause of a serious character
acting without malicious intent but with negligence which is the sole cause
of the damage;
- if
the worker by his or her inexcusable imprudence or carelessness endangers
the safety of the establishment or the persons therein;
- if
the worker is guilty of immoral conduct in the establishment or workplace;
- if
the worker reveals manufacturing secrets or communicates matters of a private
character to the detriment of the undertaking;
- if
the worker is absent from work more than three times in a period of 30
days without the employer’s permission or without sufficient reason;
- if
the worker refuses to obey the employer or his or her representative without
sufficient reason in matters connected with the work under the contract;
- if
the worker refuses to adopt preventive measures or follow the procedure
laid down for the prevention of accidents or disease;
- if
the worker attends work in a state of intoxication or under the influence
of a narcotic or harmful drug unless, in the latter case, he or she has
a medical prescription. Before commencing service, the worker should inform
the employer of the facts and submit a certificate signed by a medical
practitioner;
- if
the worker receives an executory judgement sentencing him or her to a term
of imprisonment preventing him or her from fulfilling the obligations under
the employment relationship; and
- on
grounds similar to those laid down in the preceding clauses if they are
of equal gravity and entail similar consequences as far as the work is
concerned.
Although there is no specific rule on trade union immunity, art. 123(A)
clause XXII of the Mexican Constitution provides that if an employer
dismisses a worker without justifiable cause or because he or she joined
an association or union or took part in a lawful strike, the employer is
required at the election of the worker either to fulfil the contract or
to indemnify the worker to the amount of three months’ wages.
In regard to the right of the working mother to maternity protection, art.
170 of the FLA establishes reinstatement in the post she previously
occupied on condition that she returns to work within the year following
her confinement (art. 170(VI)).
Notice and prior procedural safeguards
Pursuant to the provisions of art. 47 of the FLA, the employer must
serve written notice on the employee indicating the date of termination of
his or her contract and the reason or reasons of this decision. Notice should
be given to the worker and, in the event that he or she refuses to accept
it, the employer should, within five days following the dismissal, inform
the respective Conciliation and Arbitration Board (hereinafter Board), furnish
the official address of the worker and request the Board to notify the worker.
Failure to notify the worker or the Board may be considered grounds on which
to declare dismissal unjustified.
Art. 435 provides that in case of force majeure, declared
insolvency, bankruptcy or exhausted mines, notice of termination should be
communicated to the Board for its approval or disapproval.
Where the reason for termination of employment is the inability of the employer
to pay, the employer must, prior to termination, obtain the authorization
of the Board in accordance with the provisions concerning collective disputes
concerning wages and money claims. In such cases of termination, the workers
are entitled to three months’ wages by way of compensation, plus the length-of-service
bonus referred to in art. 162 (art. 436). Any proposal to reduce
the hours of work in an undertaking or establishment must take into account
the staff lists according to posts and seniority, the workers having least
seniority being first affected by such reductions (art. 437).
Where the installation of machinery or new methods of work results in reduction
of personnel, the employer must, if there is no agreement covering the case,
obtain the authorization of the Conciliation and Arbitration Board. The workers
laid off are entitled to four months’ wages by way of compensation plus an
additional 20 days’ wages for each year of service or an amount stipulated
in the contract of employment if this is greater, as well as the length-of-service
bonus referred to in art. 162 (art. 439).
Severance pay
Under art. 49 of the FLA, the employer may, in the following cases,
be released from the obligation to reinstate the worker by paying the compensation
referred to in art. 50:
- in
the case of workers who have been employed for less than one year in the
undertaking;
- if
sufficient evidence is furnished to the satisfaction of the Conciliation
and Arbitration Board that the worker on account of the work performed
or the nature of the work is in direct and permanent contact with the employer
and the Board is of the opinion, taking into consideration all the circumstances
of the case, that continuation of the work is impossible;
- in
the case of employees in a position of trust;
- in
domestic service; and
- in
the case of casual workers.
Compensation referred to in the preceding section consists of the following:
- if
the employment relationship is for a specified period of less than one
year, an amount equal to the total amount of remuneration payable for one-half
of the entire period of employment; if the employment relationship lasted
for more than one year, six months’ wages for the first year of service
plus
20 days’ wages for each additional year of service;
- if
the employment relationship is for an unspecified period the compensation
consists of 20 days’ wages for each year of service;
- in
addition to the compensation referred to in the preceding clause, three
months’ wages plus the entire remuneration payable in respect of the period
from
the date of dismissal to the date on which the compensation is paid.
Avenues for redress
The worker may apply to a Conciliation and Arbitration Board for reinstatement
in the post occupied or for compensation in the form of three months’ wages,
at his or her choice.
If the employer fails to furnish proof of cause for dismissal at the hearing,
the worker is furthermore entitled, irrespective of the type of action instituted,
to payment of wages in arrears from the day of dismissal until the day the
award is carried out (art. 48).
Moreover, if the employer is unable to furnish conclusive evidence of the
reasons for terminating the contract in the course of the legal proceedings,
the employee enjoys the rights referred to in art. 48 (art. 55).
Further information
[1] Dating back to 1917. However, more than 350 amendments
have been made to the original text.
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