Recent Jurisprudence – Termination of Labor Relationships by Mutual Consent

March 16, 2010
Recent Jurisprudence – Termination of Labor Relationships by Mutual Consent

Last month Mexico’s Supreme Court (SCJN) issued case decision 2a./J.1/2010 under the heading: “Termination of Labor Relationship by Mutual Consent. Pursuant to article 33 of the Federal Labor Law, a worker may request the nullification of a signed settlement or termination agreement if he or she considers that a waiver of rights has taken place”. In recent cases, Mexico’s Supreme Court has held that the termination of a labor relationship by mutual consent ‘does not imply that the worker is barred from requesting the nullification of a settlement agreement entered into with the employer, whether as part of a settlement or termination, if the worker deems that such will constitute a waiver of his or her rights, independent of the terms contained in the agreement that has been ratified by the local labor conciliation and arbitration board”. The above is based on the fact that a termination of labor relationship by mutual consent does not imply a waiver of rights or benefits related to labor services previously provided so that, in cases where, through individual or collective agreements, there is a termination of a labor relationship, article 33 of the Federal Labor Law always applies providing for the principal the impossibility of a waiver of employee rights in agreements or settlements involving such labor rights. Based on the foregoing, it is highly recommended that payments of vacation pay, vacation bonus, holiday pay or any other benefits be totally covered in accordance with the proportional salary and time worked by the employee, since payment of an incorrect amount could imply a possible waiver of rights and, as such, allow an employee to nullify a settlement agreement.

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