Recent Case Decision – Strict Interpretation of Collective Labor Agreements

Mexico’s Supreme Court of Justice (Suprema Corte de Justicia de la Nación or SCJN) recently published caseLumber 2a./J. 128/2010 in the Judicial Weekly of the Federation entitled, “Collective Labor Agreements. Clausesproviding for compensation payments to employees in excess of amounts established in the Federal Labor Law (LeyFederal del Trabajo) shall be strictly interpreted.” In such case, the SCJN establishes that applicable labor law mustbe interpreted in accordance with the intent of such body of laws and, in case any doubt exists, such doubt will beresolved in favor of the employee, unless any of the exceptions held by the SCJN apply, such as in the interpretationof clauses in collective labor agreements that set forth compensation for employees in amounts greater than theamounts provided by law. The SCJN reasoned that any such clause that goes beyond the minimum legal rights shallbe strictly interpreted and in accordance with principles of good faith and equity, which was cited as the decidingfactor in the case.