By declaring a health emergency and not a contingency, provided by law, employers and employees are left in limbo; specialist recommends agreeing.

By Mariana Mijares

The health emergency due to force majeure in Mexico due to the new coronavirus has raised more doubts than certainties for companies and workers regarding remuneration.

Until Monday, the federal government had only given suggestions, not indications or precise guidelines for companies.

“The decree of March 30 and March 31 were acts of authority that suspended activities in certain sectors,” explains Juan José Díaz Mirón, partner of the Díaz Mirón y Asociados Law Firm.

The litigant with a Master’s degree at the Escuela Libre de Derecho indicates that when declaring a health emergency due to force majeure, and not the contingency provided for in the Federal Labor Law (LFT), a special suspension was foreseen not foreseen in the legal framework, which left to employers and employees without knowing what to do.

“The most serious thing was not knowing how much to pay workers in the face of this novel figure. Legally, it could have been interpreted in two ways: that the workers could go home with a daily minimum wage; or that the workers had to leave with a full salary ”he points out.

“Every time the measure was new and not supported by law, but in a frank state of emergency, confusion and uncertainty were created in the country’s productive union,” he says.

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According to the federal administration, those companies that do not carry out activities considered essential must suspend them.

However, if a health contingency is officially announced (provided for in articles 42 Bis, 427 and 429, section IV of the LFT), the outlook for employees, particularly in terms of salary, could be affected.

“The application of these articles would imply a suspension of labor relations and productive work by paying compensation to all workers, which would consist of a daily minimum wage for the duration of one month,” emphasizes the lawyer.

He says that if this measure were adopted, a legal regime would be entered where there is no discretion, and that the obligation assumed would be to suspend operations and relations with the payment of the minimum wage.

However, for the specialist lawyer, it seems that the Andrés Manuel López Obrador government is deferring this resource as long as possible.

“I do not think that Mexico is in favor of that legal status, since it seriously compromises the economy and possibly society. Everything that has happened with the authority until today is a sign that the government does not want to adopt that measure, ”adds the also member of the National Association of Business Lawyers (ANADE).

Díaz Mirón expresses that if the emergency were declared, and with the passage of 30 days of confinement until April 30, it would return to being in a gray area.

“In that case, legally nothing exists, we would be as we are today: outside the framework of the law. In a de facto situation like that, we would be forced to apply the general principles of law to act in accordance with the best interests of humanity and of the productive sources, ”he explains.

If after this time the worker is dismissed, the employer must compensate him according to the salary established in his original contract, and not according to the temporary minimum wage, in accordance with article 89 of the LFT.

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If things stay the same, what’s next?

Given the current situation caused by COVID-19, the lawyer emphasizes the importance of employers themselves agreeing with their employees.

“The most desirable thing is not to postpone, but to provide clarity and help with the measures adopted. The government’s priority should be the health of workers and the viability as far as possible of the productive sector. For this, it would be necessary to enter into an emerging and imminent dialogue to agree, provide certainty and thus be able to save the greatest number of lives, jobs and companies, “he stresses.

For the consultant, the situation in Mexico today as a consequence of the global pandemic goes far beyond decrees and previously anticipated or foreseeable measures:

“The situation that lashes out against our country calls for together: government and the governed, we will overcome this gloom together and we can give ourselves safeguards and certainty. This is without a doubt unprecedented and it would be commendable to enter into an equal government and citizen partnership and solidarity… without precedent. ”

The importance of tax incentives

In the near horizon, Díaz Mirón expects the federal government to help the private sector through fiscal incentives.

“Not only do I see it, but I think it would be demandable and one of the main areas of opportunity for the government if it wants to be a partner in the salvation of the Mexican productive system. This crisis is not of or caused by businessmen, it is a global crisis that we face, and will face, together as a productive sector. Without incentives, waivers, deadlines and aid, the government would suffocate the country and its people. If it doesn’t, it would lose Mexico, ”he says.

Agree to save

The litigant says that there is a theory that if conditions change, so should covenants; therefore, companies that have already seen their income affected can take actions.

“To avoid not only mass layoffs, but widespread bankruptcies and possibly eminent social chaos, it is necessary to sit down to an agreement and thus save as many jobs and businesses as possible,” he recommends.

Díaz Mirón emphasizes that any measure should not be taken unilaterally, but by mutual agreement between the parties.

“I urge and beg everyone, regardless of whether they are large, medium or small employers, workers or unions, to be aware of what is happening and agree to what is necessary to save their companies and sources of work knowing that there are many businesses that cannot endure a month closed paying current salaries, in the same way that people could not live a month without salary, “he says.

“What is best for us is to mutually agree on what saves us. Let there be no doubt: we are all losing, so the main thing is to agree on what is necessary to lose as little as possible and thus survive, ”he believes.

It indicates that the LFT mentions that labor relations oblige what is expressly agreed in accordance with the rules, in good faith and in equity.

However, he says that for the moment there are no applicable rules, and therefore only remains to agree.

“These pacts are and will be obligatory, and legally valid in the light of any legal interpretation, since the best interest of workers and employers at this unusual moment is to preserve the greatest proportion of companies and jobs that are humanly possible,” he highlights.

“As a firm with more than 30 years in the labor sector, we are offering agreements that companies and employees can use and use to their advantage. Circumstances dictate that unthinkable efforts, creativity and services are required until a month ago, but we are and will be helping those who require it, ”he says.

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