Employment Compliance Trends: New Litigation Ruling Impacts Mexican Businesses | Newsletters | Legal News: International
In September 2016, there was a major shift in the Mexican Supreme Court’s approach to damages, where the country’s highest court ruled on the legality of punitive damages. In April 2020, the federal courts made crucial changes to litigation, where companies doing business in Mexico should not only be concerned about compliance with Federal Labor Law (FLL), but also be aware of tort claims. .
In recent precedents (May-June 2022), Mexican federal courts have confirmed that companies are not relieved of liability to their employees solely by paying their social security contributions for risks or accidents at work or by paying their redundancy obligations. Courts have held that in addition to work-related claims, claims for personal injury or pain and suffering on the job, which may include wrongful termination, are also subject to tort claims filed in the courts. civilians. It may be worth noting that, unlike the parameters set out in the FLL where employer liability is capped, torts are not subject to a monetary threshold. Additionally, courts have also held that in some cases related to tort claims, specifically filed against an employer for bodily injury or pain and suffering, the burden of proof may shift from the plaintiff (i.e. employee) to the defendant (i.e., the company).
This new approach undertaken by Mexican federal courts underscores the importance of our previous recommendations to properly document and maintain sufficient evidence of compliance with health and safety regulations regarding physical and mental conditions in the workplace. . The wording used in severance and settlement agreements should also be revised to minimize the company’s exposure to the aforementioned claims.
In sum, employees can now seek damages for injuries, pain and suffering, and possibly even wrongful termination, not only in Mexican labor courts, but also in civil courts via tort actions. Moreover, the remedies available to employees are not only direct damages, but also punitive damages.
Therefore, given the importance of occupational health and safety standards, both mental (NOM-35) and physical (FLL), as well as the clear dissection of remedies for employees, former employees or even visitors to a business’s premises, businesses should review the need to produce strong and uncontestable evidence of their compliance with applicable laws and standards to mitigate their exposure to punitive and tort damages for failure to comply with these.
For more information, please contact your Foley partner. Foley has created a multi-disciplinary, multi-jurisdictional team to respond to and ensure our clients meet the legal and business challenges that the new trend in litigation creates for stakeholders in various industries.
Information on the 2016 decision is available here. Our 2020 Changes Customer Alert can be found here.