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The labor reform after 16 months

By Miguel Ángel Andrade García Alonso
Litigation Area Partner
Bufete Sales Boyoli

What has been the impact of the Federal Labor Law Reform? Have the objectives, outlined by the President of the Republic at that time, been met? Have things truly changed in labor practices? Although there are certainly many implications, points of view and perspectives through which this “structural reform” may be analyzed, this would seem like a good time to review its current status, from the point of view of a litigant in this area who lives and suffers the administration of justice in labor matters.

In the preamble (almost romantic part of any proposed law or amendment of said law), presented at the time by the Federal Executive Power before the House of Representatives, the imperious need for having a “modern” juridical-labor scaffolding was asserted, in view of the following:

  • “The labor legal framework has been overpowered by the new demographic, economic and social circumstances.
  • The current legislation does not meet the need for urgency to increase the companies’ productivity and the Country’s competitiveness nor the need to create jobs.
  • Conditions that hinder the prevalence of the principles of equity, equality and non-discrimination in labor relations still persist.
  • The anachronism of procedural provisions is a factor which encourages delays and prevents the modernization of labor justice.
  • Even though our country has shown an important progress in democracy and freedom, it is still necessary to move forward toward better practices in union organizations, which promote decision making.
  • Labor regulation does not provide meaningful penalties for those who engage in unfair or irregular practices which go against the law”.


 

Four myths (or realities) in human capital relations.

Between our corporate culture, sometimes prone to “urban legends” and the labor reform, which, although distant (passed a year and a half ago) and not yet implemented to its full extent, the myths in regard to certain aspects of human capital have heightened; in that regard we have prepared this paper in the hope that it proves useful.

1.- If I quit or am fired, I always have the right to 12 day’s salary for each year: This is a recurrent myth found in the queries made to our Firm; in reality, the claim refers to the so-called seniority bonus (which is also different from the famous 20 days per year). The seniority bonus, in fact, consists of 12 days per year worked, but with a salary capped at twice the minimum wage; in other words, this claim is calculated based on the employee’s salary, but if he or she earns more than two minimum wages per day (around $135 MXN), then this last amount will be used as the top limit to be used in the calculation. Additionally, in regard to its applicability, there are two different scenarios: dismissal and resignation. In case of the latter (resignation), the payment of the seniority bonus applies only if the employee has a previous seniority of 15 years or more of service. On the other hand, if the employee is dismissed for cause (for example, for a breach of trust) payment is mandatory regardless of the employee’s seniority; paradoxical, isn’t it?

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