Mexico Oil Executive Asked to Resign After Worker Pay Dispute

Bookmark

A director at the trading arm of Mexico’s state oil company was asked to resign after authorizing payments under a profit-sharing plan, according to a person familiar with the matter.

Jose Luis Cardenas Dominguez, director of administration at PMI, is expected to leave the company, said the person, who asked not to be named because the information is confidential. Another employee has resigned amid pressure from the company to return the payments, the person said.

A spokeswoman at Petroleos Mexicanos, also known as Pemex, which controls PMI, didn’t immediately respond to a request for comment. Cardenas Dominguez couldn’t immediately be reached for comment.

The dispute over the payments comes as Mexico’s government tries to crack down on top officials’ earnings and promote a policy of austerity amid the rising human and economic toll from Covid-19.

Cardenas Dominguez was told by Pemex earlier this year it would prefer that PMI employees choose to forgo the profit-sharing payments, the person said. Then Covid-19 hit, forcing people at PMI to work from home. Cardenas Dominguez approved almost $1 million in payments to about 270 employees at PMI in May under the arrangement.

The move eventually led to a meeting in which Pemex told Cardenas Dominguez to quit, according to the person. PMI instructed employees earlier this month they would have to provide a written explanation if they wanted to retain the payments, even though profit-sharing is a constitutional right in Mexico.

Days after Bloomberg first reported that demand, the company backtracked. It said employees could keep the cash after all, although it encouraged them to make voluntary donations. President Andres Manuel Lopez Obrador weighed in, saying last week that the return of year-end bonuses -- a payment separate from the profit-sharing -- isn’t mandatory for Pemex workers.

Some of the cash being returned by workers at both PMI and Pemex will go to Pemex’s network of 24 hospitals and clinics, which has been heavily burdened with Covid-19 patients, according to two people familiar with the matter.

PMI has continued to make weekly checks on who has made donations, the people said. Pemex is asking directors, deputy directors and managers to return between 5% and 14% of their monthly salaries to the state, and for other workers to donate as much as 40% of their year-end bonuses, known as aguinaldo, according to documents seen by Bloomberg.

PMI has had to slash its operational budget, making it more difficult to fill job vacancies, the people said. PMI staff are working extra hours to compensate, and some have been forced to buy their own computers and equipment to work from home during the pandemic, the people said.

©2020 Bloomberg L.P.

BQ Install

Bloomberg Quint

Add BloombergQuint App to Home screen.