### Supreme Court Approves Labor Law Reform Increasing Paid Vacation Days
The Second Chamber of the Supreme Court of Justice of the Nation (SCJN) ruled on August 14, 2024, that the reform to Articles 76 and 78 of the Federal Labor Law (LFT), which was published in the Official Gazette of the Federation on December 27, 2022, meets the legislative requirements and does not violate the principle of non-retroactivity. This reform, presented by President Andrés Manuel López Obrador, increases the annual vacation period to a minimum of twelve days for employees with more than one year of service.
The ruling, delivered by Minister Luis María Aguilar Morales, was supported unanimously by four votes, with Minister Lenia Batres Guadarrama absent. The decision denied legal protection to GND Constructora, which argued that the reform to Article 76 of the LFT was unconstitutional.
“The Union’s Justice does not protect GND Constructora against Articles 76 of the Federal Labor Law and the second transitional article of the ‘Decree reforming Articles 76 and 78 of the Federal Labor Law on the matter of vacation.’” The decree was published on December 27, 2022.
The reform, which was approved by both chambers of the Congress of the Union in December 2022, states that employees with more than one year of service are entitled to a paid vacation period of not less than twelve working days. This period increases by two days per subsequent year of service, up to a maximum of twenty days.
GND Constructora argued that the reform turns the vacation premium from an employee benefit into a “tax burden” borne by the employer, which includes various taxes and social security contributions, causing economic harm to the company. However, Minister Aguilar Morales found these arguments unfounded, stating that the Congress of the Union met the necessary legislative criteria.
Furthermore, the court determined that the company’s claims were inoperative since the alleged unconstitutionality could not arise from specific or hypothetical circumstances. The regulation of the vacation premium and related contributions was not part of the subject matter in dispute, the minister added.
The unanimous decision was supported by Ministers Aguilar Morales, Javier Laynez Potisek, Yasmín Esquivel Mossa, and Pérez Dayán. The court affirmed that the Congress has legislative competence over the reform, which aims to advance workers’ rights. The reform seeks to improve workers’ health, promote family cohesion, and encourage recreation and cultural activities by ensuring rest periods.
The court also noted that the reform does not violate the principle of non-retroactivity since it does not disregard any acquired rights or alter pre-existing legal consequences that should remain unchanged.
### Secondary Article: Further Insights on the Labor Law Reform
Additional insights gathered from recent discussions and reports on the labor reform underline its significant impact on the labor market. Labor experts highlight that the increase in vacation days can boost employee productivity and job satisfaction. Employers, on the other hand, express concerns about the economic implications, especially for small and medium-sized enterprises.
A recent study published by a labor think tank points out that adequate rest and vacation periods are crucial for mental health and overall well-being. The study underscores that countries with more generous vacation policies often have higher employee retention rates and better workplace morale.
Moreover, international comparisons show that Mexico’s updated vacation policy aligns more closely with global standards, as many developed nations offer similar or even more generous vacation entitlements. This alignment is considered an important step for Mexico in fostering a more balanced and fair labor environment.
Labor unions and workers’ rights groups have praised the Supreme Court’s decision, viewing it as a victory for labor rights. They argue that the reform is a necessary adjustment to outdated labor laws that previously offered minimal vacation time.
Conversely, some business associations remain skeptical and call for additional measures to support employers in adapting to the new requirements. Suggestions include tax incentives or subsidies to offset the increased operational costs associated with the extended vacation periods.
As the reform takes effect, both employees and employers will need to navigate the new landscape. For now, the focus shifts to implementation and ensuring that both parties can benefit from the enhanced labor standards.