The work stoppage due a sanitary contingency in a production or administrative facility, including the suspension of wages with a reduced indemnification, is permitted under Article 427 of the Federal Labour Law, which regulates the different hypothesis in which collective work suspension is justified, including suspensions caused by a sanitary emergency declared by a public health agency or authority.
Article 427, section VII reads in part:
Article 427: The causes of temporary suspension of employment relationships in a company or establishment are: … VII. The suspension of work, declared by the competent health authority, in cases of health contingency.
Article 429, section IV sets the maximum indemnification to be paid to the employees or workers affected by the suspension, in the following terms:
Article 429: In the cases indicated in article 427, the following rules shall be observed: … … IV. In the case of section VII, the employer will not require the approval or authorization of the Court and will be obliged to pay their workers compensation equivalent to one day of the current general minimum wage, for each day the suspension lasts, without exceeding one month.
In the context of this legal framework, we recommend that, in the event of a confirmed case of COVID-19 in the workplace or related facility, the employer should first establish the extent of the contingency, whether it is an individual case, or a collective or generalised situation, as this will determine:
a) if the employer should suspend the work activities, and, if so; b) the extent of the suspension (e.g. total or partial closing of the facility).
If it is an individual situation, the individual will most likely be isolated by the public health authority, and he/she will be covered under the Social Security Law with respect to his/her medical treatment and economic subsidies. This should not require the total or partial closing of the facility.
Alternatively, if the health authorities consider the situation to be a general emergency, and they issues an order to suspend the work activities, the company will be obliged to pay their workers compensation equivalent to one day of the current general minimum wage, for each day the suspension lasts, regardless of the actual salary or job position held by the affected workers, without exceeding one month. If the suspension exceeds the term of one month, the employer shall have no further obligation with respect to salaries. It is very important to keep in mind that this rule only applies if the suspension is ordered by the health authority.
If the employer makes a unilateral decision to suspend the work, he will be responsible to cover the actual wages and salaries of his workers and employees during the suspension.
If the company considers it appropriate to implement a general suspension, the employer is advised to contact the competent health authority in order to obtain the health contingency declaration, and to avoid any potential labour disputes or challenges that could arise.
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