April 13, 2021

Seniority Bonus Must Be Paid Even If Not Expressly Requested

By Adrian Salgado

On March 12, 2021, the Second Chamber of Mexico’s National Supreme Court of Justice published a ruling in contradiction to opinion number 2a./J. 66/2020 (10a.), titled “Seniority Bonus. Even if not expressly requested, its payment is required when the employee’s seniority is confirmed and such employee has been terminated or the employment relationship has otherwise been terminated”.  In its holding, the Court resolved the contradiction of opinions 178/2020, between the opinion XIV.T.A.7 L (10a.), issued by the Labor and Administrative Collegiate Court of the Fourteenth Circuit (previously commented on CCN MexicoReport® September 2014 issue) and the opinion issued by the First Labor Collegiate Court of the Eighteenth Circuit by its resolution to the direct amparo 17/2020. In the new opinion analyzed here, the Second Chamber determined that “the payment of the seniority bonus is required if the seniority of the employee is confirmed, provided such employee was terminated or the employment relationship was otherwise terminated.”

The ruling was made considering that section III of article 162 of the Mexican Federal Labor Law provides that the payment of the seniority bonus is an immediate and direct consequence of the termination of the employment relationship. Thus, such bonus must be paid to employees who voluntarily resign or who have been terminated, notwithstanding whether the layoff was with or without cause.  By confirming the employee’s seniority and a termination of the employment relationship, the authorities are required to charge the employer with paying the bonus, even if it was not expressly requested. However, the Second Chamber also establishes that in the case of a voluntary separation, the payment will apply if the employee has seniority of at least fifteen (15) years.  Note also that if the employee is reinstated in his or her former position, payment of the seniority bonus will not apply, since the employment relationship would not be terminated.