Supreme Court Of Puerto Rico Rules PR-DOL Christmas Bonus Exemption Decree Was Inapplicable To Unionized Employees

• Published date: 18 July 2023
• Law Firm: Littler Mendelson
• Author: Ms Anabel Rodríguez-Alonso

On June 30, 2023, the Supreme Court of Puerto Rico issued an Opinion and Order interpreting an employer's obligation to pay the Christmas Bonus to employees covered by a Collective Bargaining Agreement (CBA). Writing for the Court, Judge Rafael Martínez Torres reasoned that because the Puerto Rico Department of Labor and Human Resources ("PR-DOL") exempted unionized employees from its decision to relieve an employer of its obligation to pay a Christmas Bonus for financial reasons, the employer could not escape its obligation to pay the negotiated bonus under the CBA to its unionized employees.

Generally, the Christmas Bonus for Private Employees Act, or Act 148 of 1969 ("Christmas Bonus Act" or "the Act") mandates the distribution of Christmas Bonuses in the private sector. Article 7 of the Christmas Bonus Act gives the PR-DOL the authority to adopt any rule or regulation the Department deems necessary when it comes to the application of the Act's provisions. Article 6 specifically states that the provisions of this Act are not applicable to workers or employees who receive their Christmas Bonus under their CBAs, unless the sum provided is less than what the Act requires. Importantly, Article 7 of the Act allows an employer to request from the PR-DOL an exemption from paying the Christmas...