Executive Summary:
- On August 3, 2023, the Eighth District Judge for Labor Matters in Mexico City granted an injunction to a group of workers in relation to the Decree to establish a maximum limit on workers' participation in profits (“PTU”).
- The protection granted to workers was granted exclusively to those complainants who signed the Amparo and accredited the payment of PTU with the aforementioned limit.
- This ruling is only applicable to the group of workers covered, and is, so far, merely an isolated precedent.
On August 3, 2023, the Eighth District Judge for Labor Matters in Mexico City granted an injunction to a group of workers from Section 120 of La Ciénega, in Santiago Papasquiaro, Durango, belonging to the National Mining and Metallurgical Union "Frente", in relation to the "Decree by which various provisions regarding labor subcontracting were amended, added and repealed", published on April 23, 2021, in the Official Gazette of the Federation (the "Decree") that added section VIII to article 127 of the Federal Labor Law, to establish a maximum limit on the participation of workers in company profits ("PTU") of 3 months of the worker's salary or the average of the last 3 years, whichever is more beneficial to the worker.
According to the ruling, the workers who challenged the Decree (considering the first act of application on the payment of the PTU for the 2021 fiscal year, which was limited to the average of previous years and was covered in April 2022) did demonstrate the impact derived from the aforementioned rule, since "... the Constitution orders that the profits of a company must be distributed to its workers in an integral manner ...", in addition to the fact that "... the right to the distribution of profits is a right recognized in article 123 of the Magna Carta, regarding which, the law should not establish any limit, since the Political Constitution of the United Mexican States itself does not provide for any limitation". To reach this determination, the Judge also took into account the statement of reasons for the 2021 subcontracting reform.
In this sense, the protection granted to workers with respect to the Decree was granted exclusively to those complainants who signed the Amparo and accredited the payment of PTU with the aforementioned limit, so that:
"Remove the aforementioned complainants from the legal sphere and do not apply to them Section VIII of Article 127 of the Federal Labor Law, added in the "Decree", insofar as it limits the payment of profit sharing."
It should be noted that this ruling is only applicable to the group of workers covered, and is, until the time this note is published, a mere isolated precedent.
It should also be noted that this resolution can still be challenged by means of an appeal for review, which, if applicable, will be resolved by the Supreme Court of Justice of the Nation, as it is a question of constitutionality.
Given the importance of this criterion, we recommend following up on the procedural consequences related to it, as it could eventually give rise to a definitive and generally binding precedent on the constitutionality of the cap on PTU.
