Issue #
January 2013

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Labor Law – Analysis of Mandatory Days of Rest

January 10, 2013

Article 74 of the Federal Labor Law, amended on January 17, 2006, establishes mandatory days of rest as those days of rest paid to employees allowing them to attend to their personal, family, civic, political or religious obligations. Despite its publication over six years ago, this provision continues to generate confusion; therefore, this article will attempt to clarify various aspects of such. Mandatory days of rest are currently the following: (i) January 1, so that the employee will not have to work on the day after the end of year celebration; (ii) the first Monday in February, in commemoration of February 5, the anniversary date of the Mexican Constitution (this is one of the mandatory days of rest modified with the reform, given that this day was previously given to employees on the day of the week on which such date fell); (iii) the third Monday in March, in commemoration of March 21, the birthday of Benito Juarez, past president of Mexico (this is another mandatory day of rest that was modified with the reform, given that this day was previously given to employees on the day of the week on which such date fell); (iv) May 1, given to employees in commemoration of Labor Day; (v) September 16, given to employees in commemoration of Mexican Independence Day; (vi) the third Monday in November in commemoration of November 20, celebrating the Mexican Revolution (this is the last of the mandatory days of rest modified with the reform, given that this day was previously given to employees on the day of the week on which such date fell); (vii) December 25, given in commemoration of Christmas; (viii) December 1, every six years, in accordance with the change in the presidency; (ix) those days determined by local and federal voting laws in the event of regular and special elections. Another objective of the reform of Article 74 of the Federal Labor Law was the creation of long weekends in February, March and November, so that employees could enjoy their weekly days of rest and the mandatory day of rest in a continuous manner and in order to prevent employee productivity from being interrupted or reduced as a result of having a mandatory day of rest in the middle of the work week. It is important to note that in addition to the mandatory days of rest established in the Federal Labor Law, employers may establish additional days of rest as a benefit to their employees. Consequently, there are employers that grant their employees Thursday, Friday and Saturday of Holy Week as mandatory days of rest, in addition to September 15, October 12, November 1 and 2, and December 24 and 31. If, as a result of the nature of the operations carried out by the employer, such employer requires employees to work on mandatory days of rest, the employer must reach an agreement with the employees as to who will work on such mandatory days of rest. In the event that such an agreement cannot be reached, the employer may present this conflict before the labor board so that such authority may determine which employees must work on these days. Employees required to work on a mandatory day of rest will be entitled to payment of double their wages for their service on such mandatory day of rest, in addition to the corresponding normal wages for such day. Finally, it should also be noted that in the event that a weekly day of rest coincides with a mandatory day of rest, the payment of double wages is not applicable given that this event is not provided for in the Federal Labor Law. In other words, if December 25 falls on a Saturday, and Saturday is a normal weekly rest day, the employee will not receive both the weekly rest day pay plus the mandatory day of rest pay, unless that the employee works in such day.

Real Estate Law - Does the Broker’s Lien Exist in Mexico?

January 10, 2013

Texas law allows real estate brokers to perfect a lien on commercial properties in order to guarantee payment of their commission in a manner similar to that known as the "mechanic's lien." In Texas, this law is known as the "Broker's and Appraiser's Lien on Commercial Real Estate Act" and more than half of the states in the U.S. have laws providing for the so-called "Broker's Lien." In order to create a "Broker's Lien," it is necessary to have a commission/fee agreement in writing between the real estate broker and the party with an interest in the real property (seller, buyer, lessor, lessee). Texas law contains specific provisions on the content of the agreement, including disclosure and notice requirements, among others. The real estate broker earning a commission relative to the sale or lease and in possession of the required written commission/fee agreement must record his/her lien with the country registrar in the county where the commercial real estate is located. It is interesting to note that the lien may be perfected prior to closing, in which case the escrow agent and the other parties to the sale or lease may not close on the transaction until the lien on the real property is released. In the case of Mexico, these aspects with respect to a real estate transaction are different than those in the U.S. To begin with, Mexico does not legally require a governmental accreditation, license or authorization to act as a real estate broker. Second, the right of a real estate broker to receive a commission deriving from their participation in a real estate transaction derives from the agreement entered into with their client, without any encumbrance or lien of any type on the real property and/or the collection rights arising from the purchase and sale or lease agreement. As a result, it may be said that the "Broker's Lien," as it is understood under U.S. law, does not apply under Mexican law. In complex real estate transactions in Mexico it is common to have one or more real estate brokers participating and with whom the owners or developers enter into real estate brokerage agreements or real estate promotion services agreements; however, in no event does the execution of such an agreement constitute the creation of a lien on the real property or collections rights to the rents or proceeds that are the subject matter of the transaction. As a result, the lease or sale to third parties is not affected in any way by the existence of agreements with real estate brokers. Nevertheless, it is common practice to indicate the participation of real estate broker(s) in real estate contracts, as well as the party responsible for paying the respective fees, usually by referencing that the payment of such will be made in accordance with a certain agreement entered into independently and separately, in order to protect the parties that are not part of the commission/fee agreement.

Real Estate

Jurisprudence– Promissory Notes Incorporated in Receipts

January 10, 2013

The First Chamber of the Supreme Court of Justice of the Nation (SCJN) approved the ruling by contradiction number 4/2013 (10a.) titled "Promissory Note incorporated in a receipt. In order to satisfy the requirements set forth in Article 170, Section V of the General Negotiable Instruments and Credit Operations Law, it is sufficient for the time and place of payment to be included in any part of such." In this ruling, the SCJN has determined that it is sufficient for the document containing the promissory note to include all requirements established by Article 170, Section V of the General Negotiable Instruments and Credit Operations Law, including those not expressly provided for, in order to satisfy such requirements. The fact that the requirements related to time and place of payment are found in the receipt and not in the text of the credit instrument will have no effect, given that if all requirements necessary for such to render its effect are included, it cannot be validly claimed that the document lacks such requirements. This ruling is pending publication in the Weekly Federal Court Reporter.