Termination of Employment Relationship by Force Majeure

In view of the current situation with regard to COVID-19 (Coronavirus), since it was declared a “Health Emergency due to Force Majeure“ and not as a health contingency, The Federal Labour Act establishes the following procedure for regulating the suspension of employment by force majeure or fortuitous event not attributable to the employer. 

For reasons of force majeure or fortuitous event not attributable to the employer, resulting in the collective suspension of employment relations, the labour authority must be notified (Conciliation and Arbitration Board, since the Court is not currently in operation), so that prior to the Special Procedure the collective suspension of industrial relations is approved or disapproved, with the legal and economic consequences that such suspension entails. 

Therefore a Special Procedure should be initiated, which is regulated in articles 892 to 899 of the Federal Labour Law published in the DOF 30–11-2012, noting and reiterating that since the Labour Court was not in office, the Special Collective Procedure is not applicable. 

In this Special Procedure, the following is established:  

The procedure shall begin with the lodging of the statement of claim, in which the applicant may offer his evidence before the competent board, which, ten days in advance, shall summon a conciliation hearing, request and exceptions, evidence and decision, to be made within 15 working days of the date on which the application was filed. 

The Conciliation and Arbitration Board, in sanctioning or authorizing the suspension, shall determine the compensation to be paid to the workers, taking into consideration, inter alia, the likely time of suspension of work and the possibility of their finding new employment, but not exceeding one month’s salary. 

Recalling that the Agreement on Public Servants of the Mayors’ Offices, Units, Decentralized Bodies and Entities of the Public Administration of Mexico City has been signed, the preventive health measures to be implemented in Mexico City, on the occasion of the COVID-19 virus, the Local Council of Mexico City, issued the Agreement determining the suspension of work by the COVID-contingency19, in which work was suspended from 23 March to 19 April 2020. Leaving guards only for the out-of-court and in-court settlement proceedings that were already scheduled, the above was published on 20 March 2020 in the Labour Gazette. 

In view of the latest agreement issued by the Local Council, it appears that the special procedure provided for in the Federal Labour Act for the collective suspension of labour relations on grounds of force majeure or fortuitous event not attributable to the employer could not be carried out. 

It is important to point out that the L.F.T., as far as a health contingency is concerned, states that it must be declared by “the competent health authority“, leaving it uncertain who is the competent health authority referred to in the Law. 

Finally, it is pointed out that the labour authority has not yet expressed its views on the matter, in order to establish the criteria to be followed, given that they are in suspension of activities. As soon as the information is updated, it will be communicated as soon as possible. 

Without further ado, and mentioning that the Firm has years of experience in cases involving: Tax, Accounting, Labor and Administration, we are at your disposal for any doubts and clarifications, if deemed necessary.