The application of equity in the resolution of labor disputes in Guatemala

By: Lionel Aguilar

Our Labor Law, materialized in the Labor Code that entered into force in Guatemala as of May 1st, 1947, introduces, in its sections, different principles that every Judge must observe when resolving controversies that arise between employers and their workers.

Such principles, especially the “principle of reality and objectivity”, in our opinion, have been misinterpreted and misapplied at present in the face of claims of those workers who have achieved, “exceptionally”, an economic level and knowledge equal, similar or even superior to that of their respective employers. All this, without prejudice to the fact that the cases are aggravated when the person claiming labor protection is the one who, in his capacity as Manager or Administrator, had control over the operation and development of the employer’s company, and in particular, in the administration of human resources.

Indeed, in these exceptional cases, the desire or wish of labor law to grant the latter preferential legal protection no longer has any sense or ideological basis, since the economic inequality existing between the employer and the worker, which is the basis for the application of labor principles and guarantees, no longer exists.

In other words, that economic inequality, source of the ideological principles of labor law, in very exceptional cases, no longer exists. Therefore, the question to be resolved in this study would be the following: “Could it be that, on the basis of a well understood equity, the guarantees and protections contemplated in the labor laws for workers who do remain in conditions of economic inequality vis-à-vis their employers should be applied to those exceptional cases?

I will begin by transcribing, in its entirety, the “principle of reality and objectivity” developed in literal “d” of the 4th paragraph of our current labor code, to then study, separately, each of the key words or expressions that compose it and all to understand the meaning and the desire of this principle of labor order in the resolution of conflicts.

Principle of reality developed in literal “d” of the 4th considerate section of the Labor Code: “Labor law is a realistic and objective law; the former because it studies the individual in his social reality and considers that in order to resolve a given case on the basis of a well understood equity, it is indispensable to focus first and foremost on the economic position of the parties, and the latter, because its tendency is to resolve the various problems that on the occasion of its application arise, with social criteria and on the basis of concrete and tangible facts.”

First key expression to be clarified: what does it mean to “resolve a given case on the basis of a well-understood equity”?

From the different linguistic meanings contemplated by the dictionary of the Royal Spanish Academy in relation to the expression “EQUITY”, it’s inferred, for the case at hand, that this expression means: “to be guided by the feeling of conscience rather than by the prescriptions of the final text of the law”.

This definition of “Equity” provided by the Dictionary of the English Language is closely related to the definitions that philosophy has given us of this expression throughout its history.

For practical purposes, the most accepted definition and applied in concrete cases, is the one provided by Aristotle. This philosopher said, that “Equity” in its very nature, is the rectification of the law when it proves to be insufficient in a concrete case because of its universal character”.

We know that all laws, in this case labor laws, necessarily have general effects, and therefore, sometimes, they prove to be imperfect, insufficient or difficult to apply in very particular cases, thus generating the application of the legal logic principle that “every rule admits exceptions”.

In our opinion, “Equity” intervenes in the solution of labor conflicts to judge, not on the basis of the law, but on the basis of the justice that the law is intended to achieve. For philosophy, Justice and Equity are the same thing. It is then that, for philosophy, equity is superior, not to what is just in itself, but rather to what is just as formulated in the law, which, by reason of its universality, is subject to errors in the solution of certain cases.

From what has been expressed above, it can be concluded that, in the labor procedural field, every judge has the instruction that, when resolving a concrete case, he/she must do so based on a “well understood equity” and in some very special cases, he/she can generate “the exception” of not protecting a worker with protective guarantees of the labor legislation, as opposed to the rule that “every worker has the right to receive such protection”.

It is very important to keep in mind that the instruction received by the Labor Judge to resolve a concrete case in accordance with a “well understood equity”, which is immersed in the paragraph under study, finds its materialization and development in the labor law itself, especially in article 361 of the Labor Code. In this article, the Judge is ordered that, when issuing a sentence and at the time of evaluating evidence, except in the case of public and authentic documents, judicial confession and the facts that the Judge personally verifies, he will appreciate the evidence in conscience, being obliged to state “the principles of equity or justice on which he bases his criterion”.

In attention to the principle of reality, which is reported in the consideration section under study, this instructs every labor judge, in the solution of a controversy, that the individual must be studied in his social reality.  That is to say, the individuality of an individual in his social environment and his economic position within the same must be studied; all this so that the resolution of the case that was submitted to him is solved, in addition to attending and applying a well understood equity, with social criteria and based on concrete and tangible facts.

This is how we understand that the principle of reality and objectivity should be applied and interpreted in the resolution of labor disputes.

Now, if we focus on these “very special” cases that, in our opinion, generate the exception to the rule of applicability of labor tutelage, we ask ourselves the following question:

By the mere circumstance that the Labor Code (law) provides in its 4th article that the employer’s representatives are laborly bound to the latter, will it be that, in very special and specific cases, such representatives deserve or not an effective labor judicial tutelage? In our opinion, the answer should be: NOT IN ALL CASES.

To exemplify the exception to the rule that all workers deserve effective judicial protection, by way of example, I cite a very special case that in our opinion allows not applying such protection based on the principle of reality and objectivity and based on a well understood equity.


A natural person who renders services as General Manager and legal representative of the employer entity, who earns a salary of Q.100,000.00 per month, plus monthly or exceptional annual bonuses that allow affirming that annually he earns amounts in excess of Q.1,000,000.00, and is also a shareholder of the employer’s entity that allows him to earn annual dividends in the distribution of profits, is it possible that, applying the principle of reality and objectivity that evidences in him a preferential and privileged economic position, he should or should not be protected with respect to eventual claims related to minimum and un-renounceable guarantees contemplated in the labor law?

Our answer would be that such protection should NOT be granted because, when the matter is resolved in conscience, based on a well understood equity and justice, the economic position of the claimant cannot be considered economically unequal against the employer. On the contrary, when studying the claimant in his social reality, it can easily be concluded that there is no such inequality between the parties, having fulfilled in the claimant the desire of all labor law (ideology) to achieve economic equality between the two.