Wal-Mart Loses Mexican Pay-Voucher Case

[Judi Lynn]

Wal-Mart Loses Mexican Pay-Voucher Case
By MIGUEL BUSTILLO in Houston and ANN ZIMMERMAN in Dallas
September 6, 2008; Page B6

Mexico's Supreme Court ruled this week that Wal-Mart de Mexico, the country's largest retailer based on sales and a unit of Wal-Mart Stores Inc., violated the constitution by paying workers in part with vouchers only redeemable for merchandise at the chain's outlets.

Wal-Mart de Mexico, also known as Walmex, gave store coupons as part of salaries. In a statement, the retailer said the program was voluntary, and "designed to help our employees acquire basic necessities." It went on to explain in the statement that under the program, Walmex would put store credit on electronic cards, and the employees could contribute a matching amount. The credit could then be used at Wal-Mart outlets throughout Mexico.

Representatives for the retailer declined to comment beyond the statement.
The case stemmed from a lawsuit filed by a Wal-Mart employee in Mexico, but details of the suit weren't available.

In its decision, Mexico's Supreme Court likened Wal-Mart's practice to exploitative labor practices in Mexico more than a century ago that led to the Mexican Revolution in 1910.

http://online.wsj.com/article/SB122066524815506105.html?mod=googlenews_wsj

[Judi Lynn]

1. Mexican Supreme Court rules against Walmex

Mexican Supreme Court rules against Walmex

The Associated Press
Friday, September 5, 2008

MEXICO CITY: Wal-Mart's Mexico subsidiary on Friday defended a voluntary program that pays employees in food vouchers they must spend at company stores, despite a Supreme Court setback.

A Walmex employee challenged the policy before the Supreme Court, which on Thursday ruled the company could not require the employee to spend vouchers at Walmex. The court didn't order Walmex to abolish the program entirely because no other employees sued.

In a statement, the court said the program resembled those seen at "old company stores," a system in which employees were paid vouchers good only at shops their bosses owned, where prices were often inflated. Mexico's constitution outlawed those stores in 1917.

Walmex, Mexico's largest private-sector employer, stressed that its voucher program is voluntary and includes an electronic debit card that can be used at any Walmex outlet. Still, it vowed to review the program.

"We are a company committed to improving Mexican families' quality of life and complying with the laws and court decisions of this country," the Wal-Mart de Mexico SA statement said. "That is why we will carefully analyze the Supreme Court decision and its implications for the program."

More:
http://www.iht.com/articles/ap/2008/09/05/business/LA-Mexico-Wal-Mart.php

[Judi Lynn]

2. Reuters: Mexico court rules against Walmex worker vouchers

Mexico court rules against Walmex worker vouchers
Fri Sep 5, 2008 1:16pm EDT

MEXICO CITY, Sept 5 (Reuters) - Mexico's Supreme Court ruled that the country's top retailer, Wal-Mart de Mexico, violated the constitution by paying a worker in part with store cards only usable in the chain's outlets, the court said on Friday.

Wal-Mart de Mexico (WALMEXV.MX: Quote, Profile, Research, Stock Buzz), also known as Walmex and a unit of U.S. retail giant Wal-Mart Stores Inc (WMT.N: Quote, Profile, Research, Stock Buzz), gives electronic store cards as part of salaries, which the court said harked back to exploitative wage practices of over a century ago.

For now, the ruling only applies to the one worker and will not oblige Walmex to scrap the card scheme.

But if enough other employees group together to bring a similar case to court it could ensure all future rulings on the card scheme would go the same way, a court spokesman said.

During the long dictatorship of President Porfirio Diaz, which ended in 1911, wealthy landowners and businessmen paid employees with special currency only valid in company stores.

More:
http://www.reuters.com/article/rbssConsumerGoodsAndRetailNews/idUSN0545865120080905

[dipsydoodle]

3. Interesting scam.

That's been illegal in the UK since the 15th century and I'd be surprised if similar legislation wasn't in place in the USA.

The old Truck enactments were very numerous and date from about the year 1464. The particular evil intended to be remedied was the truck system, or payment by masters of their men's wages wholly or in part with goods -- a system open to various abuse -- when workmen were forced to take goods at their master's valuation. The statutes were applied first to one branch of manufacture, and then in succession to others, as experience and the progress of manufactures dictated, until they embraced the whole or nearly the whole of the manufactures of England. They established the obligation, and produced, or at least fortified the custom, of uniformly paying the whole wages of artificers in the current coin of the realm.

http://en.wikipedia.org/wiki/Truck_Act

[Judi Lynn]

4. Thanks for this information. Had no idea whatsoever.

Going to reread your material again to try to make sure it stays with me.

It's horrendous to realize the difference between what happened there and what happened in the U.S. to the desperate, unrepresented victims trying to sustain themselves as coalminers in the American Appalachian region. Jeez. You were truly lightyears ahead of the way they did it here, believe me!

What a shame our own system has failed to encourage real awareness of things beyond the immediate present and immediate place! That makes it so easy for our vast scale criminals.