The cut on year-end bonuses for bureaucrats is illegal and unconstitutional: lawyers

Note published in Factor Capital Humano, Leyes y Gobierno [Laws and Government] Section by Blanca Juárez
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During the course of 2020 public servants have generated the right to receive this year-end benefit, the federal government cannot take this amount from them through a decree, labor lawyers pointed out.

The 50% cut to the year-end bonus of some federal government officials is illegal and unconstitutional, labor lawyers said in an interview. Neither the reasoning that they used to earn too much in a country with so much inequality or that this will mean savings in times of the Covid-19 pandemic justify this violation of workers’ rights, they pointed out.

“The issue is whether a President of the Republic can eliminate a labor benefit, a right that has already been acquired”, said Manuel Fuentes Muñiz, an academic at the Universidad Autónoma Metropolitana (UAM) and advisor to various unions.

During the course of this year, public servants have already generated the right to their year-end bonus, the government cannot reduce its amount at this time, said Oscar de la Vega, founding partner of the De la Vega & Martínez Rojas Firm. Perhaps there could be a negotiation in the future but, at this time, they are violating their labor rights, added the consultant to multinational companies.

Last Thursday, President Andrés Manuel López Obrador published a decree in the Official Gazette of the Federation (DOF) in which he not only announced the advanced payment of bonuses, but also their reduction from 40 to 20 days of salary for white collar personnel.

Article Five, Section II, Paragraph a of the document states that the amount will grow from 20 to 40 days “at the levels with the lowest earnings in the salaries and wages tabulator.” This Friday, in the morning conference, the President assured that the cut “is really for those at the very top. It is a matter of formality, of legality that we want to comply with.”

He also said that he would make the formulas for the application of the cut available. Article 12 of the decree establishes that the Ministry of Finance and Public Credit will issue the guidelines to put it in practice.

A year-end bonus cannot be waived

The labor legislation in force, such as the Federal Labor Law (LFT), establishes the rights, but these rights are also generated by custom, explained Oscar de la Vega. “If the contract said that the year-end bonus is equivalent to 20 days of salary, but if, for years, they have received 40 days, it is an acquired right.”

Labor rights are unwaivable, he reminds us. At least the minimum ones. The LFT specifies that the year-end bonus cannot be of less than 15 days of salary. The one received by public officials is higher than the one established by law; in this sense, there could be a negotiation to reduce it, but with “the consent of the parties” and for the future, that is, the one for 2021. Not the one they have already generated for this year.

In the decree, the President states that he will “return” the amount of his year-end bonus to the Treasury. “Whoever wrote it knows that it is unwaivable, it is understood that he will receive it and will return it”, states Manuel Fuentes a Doctor of Law. “But they will receive the reduced payment.”

Afterward, in the morning conference, President López Obrador stated that the reduction is voluntary. However, “what is established in a decree is mandatory.” Therefore, “it is unconstitutional, because it infringes upon the powers of the Federal Congress to legislate on labor matters”, said Fuentes Muñiz.

The measure mainly affects white-collar personnel, he says. These type of workers have had, for many years, “a limited situation” due to terminations without pay or overtime with no pay. “The year-end bonus is an extraordinary amount that they receive.”

The government “sets the military apart, as their year-end bonus will not be reduced.” No difference can be established between military and civil servants, he underlined.

And what about the unions?

One of the promises made by this government has been to end with the privileges of the elites. But the year-end bonus “is not a privilege, it is a right”, pointed out Manuel Fuentes. And this is true for “the most humble worker and for the highest ranking one. It is a right that cannot be annulled.

If the 4T officials speak of social justice, “labor rights are social justice.” And the fact that they are embodied in the law is precisely to prevent public officials or any other employer from ignoring them, he added.

It is simply that we must all be subject to the Rule of Law, said Oscar de la Vega. In the opinion of the specialist in labor and economic law “it is worrying that we are at the mercy of political wills and of subjective opinions of what may or may not be fair.”

This situation may create a “very dangerous” legal uncertainty in all sectors, he states. Both investors and employees at all levels need the certainty that we “will coexist within legal certainty.”

What this will cause, he warns, is that there will be a brain drain from the federal government, that it will cause competent personnel to seek other alternatives. However, due to the pandemic, there is a high level of unemployment in the labor market.

“We are renegotiating conditions for the future in many companies.” The advantage, he states, is that these provide greater certainty of the benefits that they will have and that said benefits will be honored, whether they are hired under a collective bargaining agreement or an individual one.

And, speaking of this, says Oscar de la Vega, a greater mobilization by unions is required. Public servants also have the right to unionize and these trades should have a strong presence at this time. But the “political rearrangement”, a labor reform, a pandemic, the division between essential and non-essential jobs, has distanced them from the basics.

“We were more concerned about subsistence, and we forgot that the reform brought its own, that the law brings its own inertia”, he states.