Termination of confidential labor agreement for loss of confidence.

November 26, 2006
Termination of confidential labor agreement for loss of confidence.

The Federal Collegiate Circuit Court of Mexico has determined that, when dealing with confidential or managerial employees, and when an employer loses confidence in such an employee for a good reason, it is not necessary to present a written notice informing the employee of the date and cause of termination of the labor relationship as mentioned in Article 47 of the Federal Labor Law. Notwithstanding this legal decision, it is convenient for employers deciding to terminate a labor relationship to present the written notice to the employee according to the final paragraphs of Article 47 of the Federal Labor Law. This is because an employee’s status as confidential or not confidential is a factual determination, and the employer could be considered as having unjustifiably terminated the employee if the employee is deemed not to be a confidential worker. In this case, the Labor Board of Conciliation and Arbitration has the discretion to determine whether a labor relationship is of a confidential nature, so the practical necessity of providing the written notice continues to exist.

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