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UPDATE 1-Mexico court rules against Walmex worker vouchers

Fri Sep 5, 2008 1:16pm EDT

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(Adds court ruling details, Walmex reaction)

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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), also known as Walmex and a unit of U.S. retail giant Wal-Mart Stores Inc (WMT.N), 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.

The stores, which sold goods to poor workers at inflated prices, were banned in the constitution after labor uprisings sparked the Mexican Revolution in 1910.

"A labor contract that requires workers directly or indirectly to buy items in certain stores violates the constitution and will be declared null and void," the court said in a statement.

A Walmex employee brought the complaint to the court about giving workers store cards as part of their pay.

"It is similar to the practices carried out in old-time stores where workers also received their salaries in the form of vouchers to be redeemed in the stores owned by the boss," the court said.

The practice also used to be common in the United States, especially in the mining industry.

Walmex noted in a statement that its store card program is voluntary, but said it would study the court ruling.

"We are a company that is committed to improving the quality of life of Mexican families ... and so we will carefully analyze the decision of the Supreme Court and its implications for the benefit plans of the company," Walmex said.

Critics often accuse Walmex and its parent company of paying low salaries and of being hostile to unions.

The Mexican unit of Wal-Mart employs over 150,000 people across the country at its more than 1,000 retail outlets ranging from supermarkets to clothing stores and restaurants. (Reporting by Mica Rosenberg and Chris Aspin; Editing by Derek Caney)



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