LEGALINK CROSS-BORDER LAYOFFS QUESTIONNAIRE
A COUNTRY BY COUNTRY SUMMARY OF APPLICABLE EMPLOYMENT LAWS
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MEXICOThe Federal Labor Law requires payment of a severance when an employee is dismissed without just cause. Under this law, the employer must pay three months of salary (integrated salary), twenty days of salary (integrated salary) per each year of services, a seniority premium (capped twice the minimum wage in case the employee’s salary exceeds said maximum), back salary from the date of dismissal until the date of payment, and any accrued benefits and salaries. The Federal Labor Law specifies for what reasons employees can be fired for cause.
Yes, the requirements are to draft and deliver a termination notice to the employee with the cause or causes and date of termination. In case of the employee’s denial of receipt of the notice, the employer must file it with the competent Board within the following five working days.
In case of collective terminations, a notice of termination must be filed with the competent Board. The severance payments depend on the cause for the termination and will either be three of four months of severance and the corresponding authorization given by the competent Board. No, the Law does not consider redundancy as a justified cause of termination.
In collective terminations, in case the employer decides to substitute employee´s for machines or mechanic procedures, then the employer must pay instead of three months of salary a severance of four months, plus seniority premium and twenty days per year of services. Yes, the Federal Labor Law (Section 48).
The sanctions or penalties are the payment of severance referenced above in question one and in case of a labor procedure, the back pay salaries from the date of termination or dismissal until the date the employer makes the corresponding payment with the Board, complies the final judgment or decides not to be subject to the Board’s jurisdiction through an economic payment.
The most common mistake is the failure of employers to comply with the formalities for a termination with cause. Employers often do not support a layoff with the appropriate evidence before carrying out the termination. Prior to a dismissal, the reasons for the layoff must be substantiated with evidence in case there is a later need to file the notice of termination with the Board. To terminate an employee for lack of performance without the corresponding evidence to support that fact or to dismiss a temporary employee who does not have a correct or justified temporary agreement. Upon expatriates, to pass over the original agreements, secondment letters, or recognition of benefits or plans give to the employee prior to his assignment in Mexico. Often, there is an issue over the payment of back wages. Payment of past due salaries are determined from the date of termination until the date of an employer’s compliance with the final judgment. Back pay will be levied in instances where the employee wins his case and the employer is either not able to support the causes of termination or has not complied with the legal formalities of a lay off.
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