Individual and contractual agreements to maintain labor relationships in face of the Covid-19 contingency are possible: specialists

Entering into agreements with workers, whether individually or collectively, is possible, mainly due to the importance of preserving the source of employment, and creates the obligation of honoring contracts, as established in the Federal Labor Law (LFT) in Article 31, which states that “labor contracts and relationships are binding in regard to that which is expressly agreed upon and to the consequences that follow labor, good faith and equity standards”.

Labor specialists agree that, although it is true that the Health Contingency does not allow the reduction of salaries for a month, they believe in agreements within some organizations, depending of the sector in question “because it is the way in which the sources of employment can be preserved”, stated Alejandro Avilés, a labor specialist at the UNAM [National Autonomous University of Mexico].

Germán de la Garza de Vecchi, of the Mowat Firm, said that “we believe that there are elements in this decree (on the health emergency) that can lead to different interpretations and/or exceptions and, therefore, we recommend analyzing each one of the cases that arises within the companies, with the objective of making legally assertive decisions”, he pointed out.

In this regard, Óscar de la Vega, partner at D&M, said that “it is evident that the COVID-19 pandemic is not a case of force majeure consisting of man-made situations, but rather a fortuitous event and, therefore, Section 1 of Article 427 does not apply to this case. Qualifying the current situation as force majeure is exclusively a maneuver for circumventing the Federal Labor Law and invalidating the express provision that regulates the event of collective suspension due to a health emergency.

He added that “from a practical point of view, we suggest that those companies that can cover a compensation of one month of salary pay that amount to their workers, but adhering to the specific rule established in Section Seven of Article 427 of the LFT, that is, the collective suspension of employment relationships as a consequence of a health contingency and the amount of the month of salary is to be given as a substitution of the compensation referred to in Section Four of Article 429 of the LFT, without being subject to approval by the Conciliation and Arbitration Boards”.

Note published in El Economista, Empresas [Companies] Section by María del Pilar Martínez