Mexico: Preliminary Analysis Of The Project To Reform The Federal Labor Law

In a work session held on April 3, 2019, the Labor & Social Welfare Commission of Mexico's House of Representatives issued the last draft of the decree to reform the Federal Labor Law (the "Law"). On April 11, the House voted and approved the general terms of the decree by an overwhelming vote of 417-1. The decree is now pending in the Senate.

Pursuant to changes made to Mexico's Federal Constitution in February 2017 addressing labor matters, as well as new commitments the Mexican Government took on as part of the United States-Mexico-Canada Agreement negotiation, the reform project seeks to reinforce workers' rights, judicialize labor justice and regulate the creation of unions, as well as strengthen workers' freedom to unionize and bargain collectively.

Although the project may face specific modifications in order to be approved in the plenary session, the following are the most relevant provisions that have been kept throughout the various work meetings of the labor commission:

Individual Employment

  • Individual employment agreements—i.e., agreements between a worker and the employer—must include the appointment of the workers' beneficiaries for payment of accrued salary and benefits in case of the employee's death or disappearance due to a criminal act. In the latter instance, the beneficiary must obtain a Special Declaration of Absence, which may be requested three months following the disappearance report or a complaint before the National Human Rights Commission.
  • The acknowledgement of internet-based tax certificates (comprobantes fiscales digitales por internet or "CFDI" for its acronym in Spanish) can be substituted for printed salary receipts. The Tax Administration Service (Servicio de Administración Tributaria) website can be used to verify their validity. Using the internet-based tax certificates would not relieve employers of the requirement to issue printed salary receipts upon the worker's request. Such printed salary receipts will require worker's actual written signature.
  • Each company must implement, in agreement with its workers, an internal protocol to prevent discrimination, address violence and sexual harassment cases, and eradicate forced labor and child labor.
  • A new provision mandates social security insurance for domestic workers. This provision will take effect once regulations are issued under the corresponding laws.
  • New provisions expand the eligibility criteria for workers' beneficiaries in case of death or disappearance. Those eligible for benefits who will not need to demonstrate economic dependency include not only the surviving spouse, but also children under 18, children 18 or older who have a disability of 50% or more (as it is legally determined), and children up to age 25 who are studying in Mexico.
  • Requests to void private termination agreements (i.e., without the certification of the Conciliation Center) may only be sought for agreements containing waivers of workers' rights.

Labor and Collective Relationships

  • Reform to the Law will implement an open and transparent model of union elections that will require workers' input into the content of the collective bargaining agreements ("CBAs") and the ability to revise agreements prior to their filing with the registration authority.
  • Closed shop provisions will no longer be allowed in CBAs.
  • The Federal Conciliation Center and Labor Registry (Centro Federal de Conciliación y Registro Laboral or "CFCRL" for its acronym in Spanish) is created, which shall be in charge of:
  • the registry of unions and related matters;
  • the registry of CBAs and internal labor regulations; and
  • the issuance of the representation certificates.
  • The concept of the Representation Certificate is introduced to guarantee the representation principles of the unions, and provide certainty in the execution, registration and filing of CBA and revision agreements. Such certificates will:
  • prove that a union represents at least 30% of the unionized or unionizable workers of a company;
  • be required to register a new CBA or to call to strike;
  • be valid for six months from its issuance date, unless a strike is called, in which case the certificate will be extended for such process.
  • Among other obligations, employers must deliver to every worker a copy of the CBA, as well as post and disseminate the announcement and other documents required for the representation certificate, or the announcement about worker consultations regarding the content of the CBA.
  • It will be prohibited for employers to carry out any conduct intended to take control of or influence the union to which its workers belong.
  • Employers will be required to enter into a CBA with only one union; should more than one union obtain a representation certificate, however, the registration authority will be in charge of organizing elections through secret ballot to determine the union with which the CBA shall be executed or administered. Employers cannot intervene in this process or be present during the elections.
  • Once the employer and the union agree on the terms of the CBA, its contents shall be disclosed to the workers for majority approval before being filed with the registration authority. Likewise, the employer may not participate during this process, and the agreement may only take effect after CFCRL approval. The requirement that salary revisions be made annually and full-text revisions be made every two years remains unchanged.
  • For CBAs in place at the time the reform takes effect, there will be an obligation to revise them at least once within the next four years, under penalty of termination of the CBA. If a CBA is terminated under this provision, workers will keep receiving the benefits set forth in that CBA.
  • A special collective procedure is established to address:
  • demands of ownership of the CBA (that is, a determination of which union will administer the CBA in place);
  • administration of the Law Agreement (a special type of CBA required for certain companies, industries and/or states);
  • breaches of internal labor regulations;
  • collective suspension of labor relationships for acts of God, lack of raw materials and lack of provision of State resources;
  • collective termination of labor relationships for acts of God, lack of matter and bankruptcy-protection measures;
  • reduction in force for introducing new machinery or technology;
  • violations of fundamental collective rights;
  • challenge of union elections; and
  • union penalties.
  • In the event of a strike, there are new requirements depending on the strike's scope:
  • If the strike is called for the purpose of executing the CBA or Law Agreement, the union calling the strike must show the corresponding representation certificate.
  • A certificate proving that the union entered a CBA with the employer must be filed with the registry if the strike was called to reestablish the balance of the production; to require the performance of the CBA/Law Agreement; to require the compliance with profit-sharing provisions; or to require salary revisions.
  • Regarding the procedure for calling a strike, the Court will summon the parties within the pre-strike period to hold conciliation talks, for which a Conciliation Center's conciliator may be appointed. In this hearing, the existence, nonexistence, justification or non-justification of the strike will not be analyzed, and may be postponed as requested by the union or both parties.
  • The pre-strike period may be extended: i) per the union's request; ii) for lack of approval of the CBA by the majority of the workers; or iii) by mutual agreement between the parties to reach a conciliatory settlement.
  • An employer may submit to the Court for consideration the conflict that produced the strike if the strike exceeds 60 days.
  • Any party may request that the Court issue a certificate of the existence or nonexistence of the call to strike.

Individual Litigation

  • Conciliation Centers will be created to carry out the pre-judicial conciliation procedure ("Pre-Judicial Conciliation") and must initiate activities within three and four years for local and federal jurisdiction, respectively, as of the date the decree is enacted. The Pre-judicial Conciliation must be exhausted prior to the labor conflict, except the following conflicts are exempt from the conciliatory process:
  • Discrimination in employment and occupation due to pregnancy;
  • Designation of beneficiaries due to death of the employee;
  • Social security benefits for work risks, maternity, illness, disability, life, day care, benefits in kind and work accidents;
  • Protection of fundamental rights and public freedoms of an employment nature (freedom of association, freedom of unionization, effective recognition of collective bargaining, labor trafficking, forced labor, and child labor);
  • Actions to challenge the administration of a CBA or a Law Agreement; and
  • Actions to challenge the bylaws of the unions or their modification.
  • The Conciliation Centers will initiate activities within three years for local competence and four years for federal jurisdiction, from the entry into force of the decree.
  • In cases of sexual harassment, discrimination or other acts of violence contemplated by law, the authority will take the necessary measures so that the applicant and the summoned person do not face each other; therefore, the summoned person must appear by proxy or representative.
  • If the parties do not reach an agreement, the Conciliation Authority will issue a certificate of completion of the Pre-Judicial Conciliation stage.
  • If an agreement is reached, once executed before the Conciliation Centers, it will acquire the status of res judicata, enabling executive actions without the need for ratification.
  • Undoubtedly a relevant aspect that emerges from the bill is the disappearance of the Conciliation and Arbitration Boards; Labor Courts will stand in their place, which will be part of the Judicial Branch.
  • Those matters currently before the Conciliation and Arbitration Boards will be resolved by those authorities. Matters arising after the Law reform takes effect will continue to be resolved by the Conciliation and Arbitration Boards until the Labor Courts enter into operation.
  • The judge will have the broadest powers to preside over proceedings, including the ability to verify the availability of the documents to be exhibited and to moderate the development of the parties' statements for the introduction and hearing of the evidence.
  • The bill to reform the Law establishes that the "plain and simple denial" of the dismissal (that is, a plain and simple statement that an employee was not fired), or a similar statement concerning the offer of a job, does not relieve the employer from the burden to prove its defense.
  • As proposed by the bill, employers will have the opportunity to prove in Court that the employee's dismissal was justified, even if no notice of termination was given, since the lack of notification would only lead to a presumption that the dismissal was unlawful. Employers would be able to admit evidence to support a justification for the dismissal.

Refusal to Reinstate

  • It is established that the employer can refuse to reinstate the worker by paying the full severance through a parallel procedure whenever the worker:
  • has less than one year of tenure with the employer;
  • works for, and is in direct contact with, an employer who is an individual;
  • is considered a trusted employee;
  • is a household worker; or
  • is a temporary employee.
  • If the employee does not agree with the procedure or with the amount of the severance, he/she can file a lawsuit against the employer. If the Court determines that the worker does not fall into the above categories, the deposit of the severance will be left without effect and the Court will apply the deposit amount to the final ruling, and is authorized to order the employer to pay the difference and interest that may apply.

Final Remarks

The project to reform the Law may face some modifications during its revision by the Senate. Since this proposal was driven by the parliamentary group with majority in the Congress, and has the approval of the Ministry of Labor and Social Welfare, we expect any modifications to be minor.

Most of the provisions contained within the last version of the project are a result of political and legal requirements founded on international treaties and the Constitution itself; therefore, the general direction of this reform will not be modified.

In accordance with Mexico's current political agenda, it is expected that the final approval of this decree will occur before April 30, and will be published in the Federation's Official Gazette on May 1, within the observance of Labor Day (to enter into force and effect the day after its publication) as occurred with the announcement of the construction of the refinery to be set in Dos Bocas, Tabasco on March 18, the day in which oil expropriation day is commemorated.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
 
Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Related Topics
 
Related Articles
 
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Mondaq Free Registration
Gain access to Mondaq global archive of over 375,000 articles covering 200 countries with a personalised News Alert and automatic login on this device.
Mondaq News Alert (some suggested topics and region)
Select Topics
Registration (please scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.

Disclaimer

The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.

General

Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions