Supreme Court in favor of free zones

[NewsWhore]

The Supreme Court of Justice issued an opinion backing the position of free zone companies in a dispute with workers, represented by the Federation of Textile Workers, Cotton Producers and Footwear (Fenatraca). The free zones prior to 2005 had the common practice of every year making severance payments to their employees that were rehired. This practice prevailed until January 2005. But many employees, upon leaving their jobs, found a legal loophole that was obliging employers to make the severance payments all over again. The government had issued Law 187-07 regulating the payments, but Fenatraca disputed the law as violating the Constitution. In the ruling, the SCJ upholds the validity of the law and the agreements reached between employees and employers through January 2005. The SCJ opinion eliminates the possibility of these workers seeking a second severance payment. The decision is only valid for payments made after January 2005.

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