At a time when many firms in Mexico have moved to cut pay as they grapple with the pandemic, an opinion issued by the Supreme Court on 1 October 2021 serves as a reminder that a pay reduction decided unilaterally by an employer, and not for any of the justifiable motives set out in the Mexican Federal Labour Law, may legitimately be cited by an employee as a breach of the employment contract. Furthermore, in the event of a dispute, it will be up to the employer to show they have not cut pay unjustifiably.
A study published in June this year by the National Institute of Statistics, Geography and Informatics (INEGI) found that pay cuts have been one of the “strategies favoured by companies to survive” the health restrictions imposed by the Covid-19 pandemic. However the Mexico Supreme Court (Suprema Corte de Justicia de la Nación, SCJN) has reaffirmed, in an opinion published on 1 October 2021, that such decisions cannot be made by a company on a unilateral basis, unless it is the result of...
Do you have information to share with us?