sensei
06/03/2016

THE TRUE DISCUSSION ABOUT ACCRUED WAGES THEIR CONSTITUTIONALITY OR THEIR LEGAL NATURE?
At present, there is a discussion to determine whether the limit put upon the liability of accrued wages for up to a period of twelve months, in accordance with the provisions of the second paragraph of article 48 of the Federal Labor Law (Ley Federal del Trabajo) is or not constitutional. Two opposing judicial opinions have emerged from two different Collegiate Courts in Labor Matters which will bring the Supreme Court to determine which of the two criteria must prevail, constituting a binding court precedent by contradiction (Jurisprudencia por Contradicción de Tesis).
Now, upon analyzing both judicial opinions we can see how the purpose of accrued wages and therefore their legal nature, leading the current discussion with regards to their constitutionality to be based on incorrect foundations. From a reading of said judicial opinions, we can deduce that accrued wages are understood as a wage modality, as a legal benefit, as an action that is ancillary to the principal, as a simple judicial effect or consequence or as a fundamental right recognized by the Constitution and International Treaties
Let us start from the fact that accrued wages are not defined by any legal regulation, but has been understood and recognized by our Supreme Court, as those wages which the worker has ceased to gain throughout the duration of a trial, which suit is derived from the unjustified termination of said worker by the employer. Before the reform of November 30th 2012, it was stipulated that said wages would be paid upon compliance of the labor board conviction ruling, while at present it is determined that their payment shall be for a maximum period of twelve months, which is precisely what is being discussed in order to determine its constitutionality.
We must take into consideration that accrued wages are not expressly recognized in the Constitution, because in fraction XII of section A of article 123 it only states that the employer who terminates a worker without a justified cause shall be obligated, at the latter’s choice, to fulfill the contract (reinstate the worker) or to indemnify him through the amount equivalent to three months of wages, and that the regulatory law shall stipulate the cases in which the employer is permitted to refuse to reinstate the worker through payment of an indemnification. They are not recognized in the International Treaties of which a Mexico is part either, the only stipulation in the aforementioned is the right to an indemnity in the case of an unjustified termination, as is found in the American Convention On Human Rights In The Area Of Economic, Social And Cultural Rights. In view of said circumstance, it was put to discussion, several years ago, if the accrued waged provided for in the Federal Labor Law, were constitutional or not, because they were not provided for in the Constitution itself. It was until the year 1999 that accrued wages were declared constitutional, finding their justification in the fact that the worker, during the trial proceedings, is separated from his employment generally without gaining wages that satisfy his needs and, likewise, in view of the fact that the constitutional text does not prohibit imposing upon the employers a responsibility beyond the three months of wages. Considering that this judicial precedent seems to us lacking in legal basis and does not reflect the reality, we must part form the fact that the constitutionality of accrued wages is currently recognized and what is now being discussed is if having limited them to a period of twelve months is in itself constitutional or not, but before that let us understand what is their legal nature.
We have already states that the judicial opinions being discussed denotes how the meaning and nature of accrued wages has been distorted. In its origin, it was sought that the effect of accrued wages were to repair the loss caused to the worker who was terminated without due justification, paying the worker the wages he ceased to gain due to the fault of the employer and therefore cover his needs. It is not therefore a modality of wages because they are understood, according to the law, to be a retribution obtained for work, while accrued wages are not paid due to a work performed, and therefore, we cannot interpret them as a legal benefit because the latter are also obtained for work performed. Sustaining that it is an ancillary action refers us to this adjacent aspect with regards to the main actions of indemnity and reinstatement, however, this does not respond to the purpose and nature of the accrued wages. There is a similar result in saying that it is a simple consequence or legal effect, which does not explain anything about its true nature. On the other hand, as we already mentioned, accrued wages are not expressly recognized in the Constitution or in International Treaties, and therefore there is no place to say they are fundamental rights.
In consideration of the above, the Collegiate Court’s judicial opinion which sustains the constitutionality of the new ruling is based mainly on the following arguments:
- – Neither the Constitution or the International Treaties forbid limiting the payment of accrued wages because they are not even contemplated within the foregoing, therefore it is not contravening them.
- – The new limitation finds is justification in the fact that it grants privilege to the quick administration of justice because in determining a maximum period of twelve months of accrued salaries it fights against the undue practice of cunningly drawing out the duration of trials.
3.- This new limitation is justified, likewise, because it will protect sources of employment against bankruptcy who suffer detriment when paying accrued wages for the totality of the duration of the trial up until the complete execution of the labor board award.
With regards to the first argument, we have already stated that even though neither the Constitution nor International Treaties establish the concept of accrued wages, it is recognized therein the right of every worker to an indemnity for the losses caused due to the employers default, therefore it should be analyzed in each case if it satisfies or not their right to an indemnity, in other words if the worker was compensated for the losses caused to him. With regards to the second argument, it seems absurd to us to believe that a law can per se, make legal periods be fulfilled, this refers more to a reality that must be resolved, for example, with greater budget in order to have more personnel and more capacity in the Labor Boards, but in no way this stipulation, as is already shown after three years that this law was reformed, can it make the Authority comply with the procedural terms and decide the trials in time. The same opinion is applicable to the third argument, because such law will not solve the problem of companies going bankrupt due to the payment of accrued wages, even based on the fact that it is true that many companies go bankrupt or are at risk of going bankrupt due to long labor trials, the reason behind this may be a multitude of different causes, as is the responsibility of the State itself in allowing the excess in the times to administer justice or in the parties themselves who see in accrued wages a juicy business and therefore let the terms run prolonging the processes.
For its part, the Collegiate Court has determined that limiting the accrued wages to a maximum period of twelve months is unconstitutional, based on the following:
- – The new provision violates the principle of equality when making a discrimination of workers who have been separated unjustifiably from the others, since from the second year of duration of the judgment it shall not receive the same wage as of those workers occupying the same position and therefore an unjustified distinction is made.
- – The new provision violates the principle of progressivity, justice, social balance and the right to a living wage, since the measure is regressive because the State is backtracking the level of satisfaction of the rights.
Holding the first argument involves understanding the accrued wages as a form of salary obtained for the work, which, as we discussed, is not correct since the accrued wage is not obtained for the work but to repair the loss, that is to say, as compensation. Regarding the second argument, we must understand that the principle of progressivity establishes the obligation of the State to adopt necessary measures for maximum protection of fundamental rights and, therefore, not to carry out acts involving regression to such protection. It implies, therefore, recognize that accrued wages are fundamental rights that the State should protect and ensure its maximum protection. However, we have already noted that accrued wages are not recognized neither in the Constitution nor in any International Treaty therefore they could not have the character of a fundamental right. What in fact is a fundamental right is to obtain compensation, that is to say, repair, by anyone who has caused losses due to unfair termination. Accrued wages respond to this fundamental right that implies that if the employer fires the worker unjustifiably, the first shall be accountable for the losses caused to the second paying the salaries that have been deprived of the worker.
Accrued wages, therefore, are a compensation established by law to compensate the losses caused by an employer to a worker who is fired unjustifiably replenishing accrued wages. The general principle of law states that whoever causes losses must repair them, this is the Legal Responsibility, therefore the existence of accrued wages have constitutional and international support as it is recognized that the employer who fires a worker must pay compensation, that is to say, repair the losses. While the Constitution only establishes the obligation to pay three months’ salary to unfairly fired worker, we have to take into consideration that neither in the Constitution nor in International Treaties is established other obligation is than compensate, which is done without setting specific amounts. Therefore, we should determine, as in any case of legal responsibility, which is the loss caused to be repaired, to determine the amount.
Unfortunately over time, not only the accrued wages were denatured but even its end was perverted. It was found in the accrued wages a great investment opportunity, a business in which both the worker sector and the employer sector could profit. We attribute the latter to the misunderstanding of the legal nature of accrued wages and excess in the times of administration of justice caused by the State. How often, for example, we have not heard in a settlement of a labor lawsuit that the worker is not interested in settle the matter since it has no economic need any since he found another job and therefore, taking advantage of the excess in the time it takes to solve the judgment, he prefers to wait until the end to obtain accrued wages. It is seen in the accrued wages a long-term business opportunity, even more if the other party is an employer of noticeable solvency that will not disappear even with the long course of the judgment. On the other hand, we also get to hear many lawyers complaining about this reform by limiting the accrued wages, because they would no longer charge more to their clients since the contingency and risk in the judgment would be reduced, that is to say, it is speculated with accrued wages for the collection of fees and therefore the business of accrued wages would end or, rather, would be reduced with reform to the law. Now, we are not sustaining that when limiting the payment of accrued wages it will be solved that the Authority shall settle judgments faster. One thing has nothing to do with the other.
Accrued wages must respond to its nature, that is to say, they are not an investment to get the worker or lawyers in court rich, but its end is that a worker who is fired without justification and has stopped receiving a wage shall be indemnified by the responsible employer, but if it is proved that the worker has suffered no prejudice as it has a wage equal or better and precisely for that time it has received it, covering its needs, then the employer should not be responsible since there is no loss suffered by the worker. If we realize, since several years ago we recognized that not necessarily workers, during the trial, forgone a wage and therefore suffer loss. The same judicial opinions that argue the constitutionality of the accrued wages justifying its raison for being refer to that “generally” the worker, during the pendency of the judgment, is unprotected without receiving wages. Therefore, if the exception is credited, it is to say, that the worker perceived a wage during the pendency of judgment and therefore suffered no loss, it should not be obliged to compensate paying accrued wage because if it is obliged to the latter, it would be distorting the concept and paying, more than compensation, a penalty.
On the other hand, the times established in law to resolve a labor procedure must be met and if is not the case and there is no liability for the parties, then the State shall be responsible for the excess in time, not the worker nor the employer, but the State. By imposing the employer to pay wages for a period of procedural inactivity caused by the State it is being given a sense of punishment, rather than compensation, to the accrued wages. To avoid this, there should be greater budget according to needs to have more staff and more qualified to solve the trials in due time and proper form.
Given the nature of accrued wages, the latter will fulfill its task which is to compensate, that is to say, repair the credited loss to the worker and, on its part, the State, to which is required responsibility for non-compliance with procedural times, will have no option but to ensure prompt delivery of justice. If everyone fulfill its own responsibility, that is to say, the employer repairing the loss caused and Labor Courts respecting the procedural periods, it would make no sense to discuss the constitutionality of the accrued wages since they would comply with their legal nature.
We refer indistinctly to “accrued wages” and “wages due” and, therefore, we shall use them as synonyms, even though we must take into consideration that the legal term is “accrued wages” (“salarios vencidos”).
See Thesis I.16o.T.2 L (10ª), Weekly Federal Court Report Gazette. Tenth period, Take IV, Book 23, October 2015, p4094 (Gaceta del Semanario Judicial de la Federación. Décima época. Tomo IV, Libro 23, Octubre del 2015, p. 4094), which sustains the unconstitutionality and Thesis XIX.1o.5 L (10ª), Weekly Federal Court Report Gazette. Tenth period. Take III, Book 15, February 2015, p. 2857 (Gaceta del Semanario Judicial de la Federación. Décima época. Tomo III, Libro 15, Febrero del 2015, p. 2857), which sustains the constitutionality of limiting accrued wages to a period of twelve months.
We refer to losses and not damages because, in supplementary application, the Federal Civil code stipulates that “damage” is a loss or detriment suffered in the property due to default of an obligation and “loss” is the deprivation of any lawful gain which should have been obtained in the fulfillment of an obligation. Therefore the employer who has ceased to fulfill his obligation of paying a wage is causing the worker a loss in depriving him of said lawful gain.

THE TRUE DISCUSSION ABOUT ACCRUED WAGES THEIR CONSTITUTIONALITY OR THEIR LEGAL NATURE?
sensei
06/03/2016
At present, there is a discussion to determine whether the limit put upon the liability of accrued wages for up to a period of twelve months, in accordance with the provisions of the second paragraph of article 48 of the Federal Labor Law (Ley Federal del Trabajo) is or not constitutional. Two opposing judicial opinions have emerged from two different Collegiate Courts in Labor Matters which will bring the Supreme Court to determine which of the two criteria must prevail, constituting a binding court precedent by contradiction (Jurisprudencia por Contradicción de Tesis).
Now, upon analyzing both judicial opinions we can see how the purpose of accrued wages and therefore their legal nature, leading the current discussion with regards to their constitutionality to be based on incorrect foundations. From a reading of said judicial opinions, we can deduce that accrued wages are understood as a wage modality, as a legal benefit, as an action that is ancillary to the principal, as a simple judicial effect or consequence or as a fundamental right recognized by the Constitution and International Treaties
Let us start from the fact that accrued wages are not defined by any legal regulation, but has been understood and recognized by our Supreme Court, as those wages which the worker has ceased to gain throughout the duration of a trial, which suit is derived from the unjustified termination of said worker by the employer. Before the reform of November 30th 2012, it was stipulated that said wages would be paid upon compliance of the labor board conviction ruling, while at present it is determined that their payment shall be for a maximum period of twelve months, which is precisely what is being discussed in order to determine its constitutionality.
We must take into consideration that accrued wages are not expressly recognized in the Constitution, because in fraction XII of section A of article 123 it only states that the employer who terminates a worker without a justified cause shall be obligated, at the latter’s choice, to fulfill the contract (reinstate the worker) or to indemnify him through the amount equivalent to three months of wages, and that the regulatory law shall stipulate the cases in which the employer is permitted to refuse to reinstate the worker through payment of an indemnification. They are not recognized in the International Treaties of which a Mexico is part either, the only stipulation in the aforementioned is the right to an indemnity in the case of an unjustified termination, as is found in the American Convention On Human Rights In The Area Of Economic, Social And Cultural Rights. In view of said circumstance, it was put to discussion, several years ago, if the accrued waged provided for in the Federal Labor Law, were constitutional or not, because they were not provided for in the Constitution itself. It was until the year 1999 that accrued wages were declared constitutional, finding their justification in the fact that the worker, during the trial proceedings, is separated from his employment generally without gaining wages that satisfy his needs and, likewise, in view of the fact that the constitutional text does not prohibit imposing upon the employers a responsibility beyond the three months of wages. Considering that this judicial precedent seems to us lacking in legal basis and does not reflect the reality, we must part form the fact that the constitutionality of accrued wages is currently recognized and what is now being discussed is if having limited them to a period of twelve months is in itself constitutional or not, but before that let us understand what is their legal nature.
We have already states that the judicial opinions being discussed denotes how the meaning and nature of accrued wages has been distorted. In its origin, it was sought that the effect of accrued wages were to repair the loss caused to the worker who was terminated without due justification, paying the worker the wages he ceased to gain due to the fault of the employer and therefore cover his needs. It is not therefore a modality of wages because they are understood, according to the law, to be a retribution obtained for work, while accrued wages are not paid due to a work performed, and therefore, we cannot interpret them as a legal benefit because the latter are also obtained for work performed. Sustaining that it is an ancillary action refers us to this adjacent aspect with regards to the main actions of indemnity and reinstatement, however, this does not respond to the purpose and nature of the accrued wages. There is a similar result in saying that it is a simple consequence or legal effect, which does not explain anything about its true nature. On the other hand, as we already mentioned, accrued wages are not expressly recognized in the Constitution or in International Treaties, and therefore there is no place to say they are fundamental rights.
In consideration of the above, the Collegiate Court’s judicial opinion which sustains the constitutionality of the new ruling is based mainly on the following arguments:
- – Neither the Constitution or the International Treaties forbid limiting the payment of accrued wages because they are not even contemplated within the foregoing, therefore it is not contravening them.
- – The new limitation finds is justification in the fact that it grants privilege to the quick administration of justice because in determining a maximum period of twelve months of accrued salaries it fights against the undue practice of cunningly drawing out the duration of trials.
3.- This new limitation is justified, likewise, because it will protect sources of employment against bankruptcy who suffer detriment when paying accrued wages for the totality of the duration of the trial up until the complete execution of the labor board award.
With regards to the first argument, we have already stated that even though neither the Constitution nor International Treaties establish the concept of accrued wages, it is recognized therein the right of every worker to an indemnity for the losses caused due to the employers default, therefore it should be analyzed in each case if it satisfies or not their right to an indemnity, in other words if the worker was compensated for the losses caused to him. With regards to the second argument, it seems absurd to us to believe that a law can per se, make legal periods be fulfilled, this refers more to a reality that must be resolved, for example, with greater budget in order to have more personnel and more capacity in the Labor Boards, but in no way this stipulation, as is already shown after three years that this law was reformed, can it make the Authority comply with the procedural terms and decide the trials in time. The same opinion is applicable to the third argument, because such law will not solve the problem of companies going bankrupt due to the payment of accrued wages, even based on the fact that it is true that many companies go bankrupt or are at risk of going bankrupt due to long labor trials, the reason behind this may be a multitude of different causes, as is the responsibility of the State itself in allowing the excess in the times to administer justice or in the parties themselves who see in accrued wages a juicy business and therefore let the terms run prolonging the processes.
For its part, the Collegiate Court has determined that limiting the accrued wages to a maximum period of twelve months is unconstitutional, based on the following:
- – The new provision violates the principle of equality when making a discrimination of workers who have been separated unjustifiably from the others, since from the second year of duration of the judgment it shall not receive the same wage as of those workers occupying the same position and therefore an unjustified distinction is made.
- – The new provision violates the principle of progressivity, justice, social balance and the right to a living wage, since the measure is regressive because the State is backtracking the level of satisfaction of the rights.
Holding the first argument involves understanding the accrued wages as a form of salary obtained for the work, which, as we discussed, is not correct since the accrued wage is not obtained for the work but to repair the loss, that is to say, as compensation. Regarding the second argument, we must understand that the principle of progressivity establishes the obligation of the State to adopt necessary measures for maximum protection of fundamental rights and, therefore, not to carry out acts involving regression to such protection. It implies, therefore, recognize that accrued wages are fundamental rights that the State should protect and ensure its maximum protection. However, we have already noted that accrued wages are not recognized neither in the Constitution nor in any International Treaty therefore they could not have the character of a fundamental right. What in fact is a fundamental right is to obtain compensation, that is to say, repair, by anyone who has caused losses due to unfair termination. Accrued wages respond to this fundamental right that implies that if the employer fires the worker unjustifiably, the first shall be accountable for the losses caused to the second paying the salaries that have been deprived of the worker.
Accrued wages, therefore, are a compensation established by law to compensate the losses caused by an employer to a worker who is fired unjustifiably replenishing accrued wages. The general principle of law states that whoever causes losses must repair them, this is the Legal Responsibility, therefore the existence of accrued wages have constitutional and international support as it is recognized that the employer who fires a worker must pay compensation, that is to say, repair the losses. While the Constitution only establishes the obligation to pay three months’ salary to unfairly fired worker, we have to take into consideration that neither in the Constitution nor in International Treaties is established other obligation is than compensate, which is done without setting specific amounts. Therefore, we should determine, as in any case of legal responsibility, which is the loss caused to be repaired, to determine the amount.
Unfortunately over time, not only the accrued wages were denatured but even its end was perverted. It was found in the accrued wages a great investment opportunity, a business in which both the worker sector and the employer sector could profit. We attribute the latter to the misunderstanding of the legal nature of accrued wages and excess in the times of administration of justice caused by the State. How often, for example, we have not heard in a settlement of a labor lawsuit that the worker is not interested in settle the matter since it has no economic need any since he found another job and therefore, taking advantage of the excess in the time it takes to solve the judgment, he prefers to wait until the end to obtain accrued wages. It is seen in the accrued wages a long-term business opportunity, even more if the other party is an employer of noticeable solvency that will not disappear even with the long course of the judgment. On the other hand, we also get to hear many lawyers complaining about this reform by limiting the accrued wages, because they would no longer charge more to their clients since the contingency and risk in the judgment would be reduced, that is to say, it is speculated with accrued wages for the collection of fees and therefore the business of accrued wages would end or, rather, would be reduced with reform to the law. Now, we are not sustaining that when limiting the payment of accrued wages it will be solved that the Authority shall settle judgments faster. One thing has nothing to do with the other.
Accrued wages must respond to its nature, that is to say, they are not an investment to get the worker or lawyers in court rich, but its end is that a worker who is fired without justification and has stopped receiving a wage shall be indemnified by the responsible employer, but if it is proved that the worker has suffered no prejudice as it has a wage equal or better and precisely for that time it has received it, covering its needs, then the employer should not be responsible since there is no loss suffered by the worker. If we realize, since several years ago we recognized that not necessarily workers, during the trial, forgone a wage and therefore suffer loss. The same judicial opinions that argue the constitutionality of the accrued wages justifying its raison for being refer to that “generally” the worker, during the pendency of the judgment, is unprotected without receiving wages. Therefore, if the exception is credited, it is to say, that the worker perceived a wage during the pendency of judgment and therefore suffered no loss, it should not be obliged to compensate paying accrued wage because if it is obliged to the latter, it would be distorting the concept and paying, more than compensation, a penalty.
On the other hand, the times established in law to resolve a labor procedure must be met and if is not the case and there is no liability for the parties, then the State shall be responsible for the excess in time, not the worker nor the employer, but the State. By imposing the employer to pay wages for a period of procedural inactivity caused by the State it is being given a sense of punishment, rather than compensation, to the accrued wages. To avoid this, there should be greater budget according to needs to have more staff and more qualified to solve the trials in due time and proper form.
Given the nature of accrued wages, the latter will fulfill its task which is to compensate, that is to say, repair the credited loss to the worker and, on its part, the State, to which is required responsibility for non-compliance with procedural times, will have no option but to ensure prompt delivery of justice. If everyone fulfill its own responsibility, that is to say, the employer repairing the loss caused and Labor Courts respecting the procedural periods, it would make no sense to discuss the constitutionality of the accrued wages since they would comply with their legal nature.
We refer indistinctly to “accrued wages” and “wages due” and, therefore, we shall use them as synonyms, even though we must take into consideration that the legal term is “accrued wages” (“salarios vencidos”).
See Thesis I.16o.T.2 L (10ª), Weekly Federal Court Report Gazette. Tenth period, Take IV, Book 23, October 2015, p4094 (Gaceta del Semanario Judicial de la Federación. Décima época. Tomo IV, Libro 23, Octubre del 2015, p. 4094), which sustains the unconstitutionality and Thesis XIX.1o.5 L (10ª), Weekly Federal Court Report Gazette. Tenth period. Take III, Book 15, February 2015, p. 2857 (Gaceta del Semanario Judicial de la Federación. Décima época. Tomo III, Libro 15, Febrero del 2015, p. 2857), which sustains the constitutionality of limiting accrued wages to a period of twelve months.
We refer to losses and not damages because, in supplementary application, the Federal Civil code stipulates that “damage” is a loss or detriment suffered in the property due to default of an obligation and “loss” is the deprivation of any lawful gain which should have been obtained in the fulfillment of an obligation. Therefore the employer who has ceased to fulfill his obligation of paying a wage is causing the worker a loss in depriving him of said lawful gain.