Author: Lisey Lee, Attorney-at-Law.
Ruling No. 0095 of the Constitutional Chamber of the Supreme Tribunal of Justice (STJ). Date: February 12, 2025. Case File No. 24-0458.
Inadmissibility of Indexation on Back Wages in Labor Stability Lawsuits. STJ Ruling.
The Constitutional Chamber of the Supreme Tribunal of Justice has established this through its Ruling No. 0095, dated February 12, 2025. In this decision, the Chamber clarified the nature of back wages (salarios caídos) and their exclusion from inflation adjustments (indexation) in special labor stability proceedings.
The Chamber entered into the analysis of the case under File No. 24-0458, stating:
“…it is observed that in special labor stability trials, the order to pay back wages does not constitute a ‘value obligation’ per se, but rather a sanction imposed on the employer for unjustified dismissal. In this sense, this Constitutional Chamber must specify that, given the compensatory and sanctioning nature of this concept, the application of the judicial indexation mechanism is not applicable to them.” (Emphasis added).
Regarding the technical distinction of monetary obligations in labor matters, the Chamber established the following in the aforementioned ruling:
“…indexation is a mechanism intended to correct the loss of purchasing power of value debts. However, in the case of back wages, their quantification is carried out based on the last salary earned by the worker at the time of dismissal, and their character as ‘wages not received’ places them in a category where the law already provides specific protection. Therefore, extending indexation to these concepts would distort the figure of labor stability, turning the sanction into a disproportionate benefit that would affect the right to due process and the employer’s economic balance.” (Emphasis added).
Thus, the Chamber issued a binding pronouncement indicating:
“From the criteria of this decision, it follows that trial court judges must refrain from ordering inflation adjustments (indexation) on the concept of back wages in stability trials. This interpretation is of mandatory compliance for all courts of the Republic, in order to unify the criteria on the intangibility of the economic sanction in labor matters.”
Furthermore, it expressly maintained the criteria regarding the protection of the employer:
“…effective judicial protection not only protects the worker but also guarantees that legal sanctions do not exceed the limits of economic rationality, preventing the inflationary differential from turning a legal obligation into a confiscatory burden for the work entity.”
To consult the full judgment (available in Spanish), click the following link: http://historico.tsj.gob.ve/decisiones/scon/febrero/341426-0095-12225-2025-16-1106.HTML
