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ARTICLE OF THE WEEK

By Baker & McKenzie

Such period of rest must be included within the daily working schedule, in order to conclude that an offer to reinstate an employee in his/her former position was made in good faith". Such ruling determined that an offer to reinstate an employee to his/her former position must include (in the event of continuous working schedules) a mention that the 30 minutes of rest provided in article 63 of the Mexican Federal Labor Law (FLL) will be included within the maximum daily working schedule.

It is true that such ruling analyses a procedural issue which consists in the requirements that the employer must meet when it invokes as a defense to a wrongful dismissal claim, an offer to reinstate the employee in his/her former position. Nevertheless, this judicial opinion has some legal implications from a labor and a social security standpoint.

Labor implications.

In terms of article 63 of FLL, the 30 minutes period of rest must be included as part of the maximum daily working schedule since it is a right granted to the employees, and thus, it must be included and paid as part of the employee's ordinary salary, notwithstanding the fact that the employee decides to use such time to rest or not, and also notwithstanding if the employee decides to stay or not inside the premises of the employer or not during such time.

Due to the above, we consider necessary to review the wording of the individual employment agreements, collective bargaining agreements, internal shop rules, and even the payroll receipts, since it is customary in the event that the employee decides to leave the premises of the employer during the 30 minutes period of rest, that such time is automatically excluded from the daily working schedule, forcing the employee to stay in addition to the 30 minutes, the maximum of hours provided in the FLL (i.e. 8 hours for the day shift, 7.5 hours for the mixed shift and 7 hours for the night shift).

Social Security implications. In terms of article 27, section IX of the Social Security Law, the overtime that does not integrate the base salary used to calculate the social security contributions, is the time that does not exceed the maximum provided in the FLL.

The criterion of the Social Security Institute ("SSI") is that an employee does not exceed the maximum time provided in the FLL if he/she works, in addition to the maximum working schedule (8, 7.5, or 7 hours), no more than 3 hours per week and/or 3 days per week.

In accordance with the above, if the 30 minutes period of rest was not included within the daily working schedule, a 30 minutes overtime payment per day would be automatically triggered. From a social security standpoint, the company would have to deem as overtime the 30 minutes worked in addition to the maximum working schedule after the third day of each week.

Moreover, it should be noted that SSI could validly assume the ruling issued by the Supreme Court in order to modify his supervision criterion and therefore, in the event of a potential inspection ordered against any employer, the SSI could hold the employer liable of having some differences in the calculation of the salary basis for the payment of social security contributions, and therefore some fines could be imposed together with the obligation of paying the difference determined regarding the social security contributions.

MEXICO'S WEEKLY HEADLINES