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May 06, 2019 Issue: May 2019

MEXICO - Collective (Traditional Labor) Law Reform

By: Francisco Udave Treviño, Santamarina + Steta, Mexico City, Mexico

The Mexican Congress approved the reform to the Federal Labor Law (“FLL”) and several related pieces of legislation, which was published in the Official Federal Gazette on May 1, 2019, having as main purposes: 1) adopting the Constitutional provisions in matters of labor and employment justice and collective bargaining which were enacted in February 2017; 2) implementing the principles of the Convention 98 of the International Labor Organization; and, 3) fulfilling the commitments acquired by Mexico in labor matters during the negotiation of the United States-Mexico-Canada Agreement (USMCA).

Among those aspects being modified as a result of the reform, those regarding unions and collective matters are described as follows:

A. Unions

  • It is prohibited for employers to act within the workers´ unions, specifically for employers to encourage the formation or support the functioning of unions which are aligned with employers´ interests.
  • Proceedings to elect union representatives should be carried out through personal, direct, free, and secret vote processes, including rules of democratic elections. Union representatives cannot act under indefinite terms, and proportional gender equality among the representatives should be observed.
  • Employers can request the cancellation of a Union registration if the Union has engaged in any blackmailing.
  • Unions must obtain a “Representativeness Certificate” issued by the Federal Center for Conciliation and Labor Registration ("FCCLR") and valid for a six-month period (except in strike proceedings), which may be obtained upon: filing a request at the FCCLR with a list containing certain details and the signatures of at least 30% of workers at a specific work site (such information could be verified by the Authority); and the request has been published at the work site to validate whether there is any other request supported by at least another 30% of workers.

In case of contending unions, the FCCLR will create a list of all workers at the work site which could be validated by work Inspectors to coordinate a voting process ensuring that workers are able to cast their direct, free, personal, and secret vote.

B. Execution of a Collective Bargaining Agreement

  • Once a Union has been chosen, there must be a consultation proceeding among the workers. This is a prerequisite for the validity of the collective bargaining agreements and their revisions.
  • Required consultation procedures require: 1) the FCCLR is informed about the CBA, and receives a copy of the executed CBA; 2) the Union provides workers with a copy of the CBA; 3) the consultation is carried out through a voting process ensuring that workers are able to cast their direct, free, personal, and secret vote; 4) the results are published at the work site; and 5) the FCCLR is informed on this, in the understanding that such Authority could annul the result in case of evident inconsistencies.
  • The existing CBAs should be revised at least once within the following 4 years, observing the preceding rules.
  • It is expressly prohibited that the employer intervenes in the proceeding for the Union to obtain the Representativeness Certificate or in the consultation process, irrespective of employers´ obligation of providing their workers with a copy of the CBA once the same has been filed and approved by the FCCLR.

C. Strikes

  • In case of strike proceedings regarding the execution of a CBA, the Union should exhibit the Representativeness Certificate. In any other cases, the Union should evidence that it has executed a CBA with the company against which the strike call is filed.

The labor law reform came into force on May 2, 2019, but its implementation will be gradual and will be overseen of a temporary agency named “Coordination Council for the Implementation of the Labor Reform”, in accordance with the following periods:

a.      The FCCRL (in its capacity as registration authority) will initiate its functions within a two-year period, attending to “budget possibilities”.

b.      Local Conciliation Centers and Local Labor Tribunals (created as a result of the reform and described in a separate article) will initiate their functions within a three-year period.

c.       The FCCRL (in its capacity as conciliation authority) and the Federal Labor Tribunals will initiate their functions within a four-year period.

Proceeding initiated before the current law will be grandfathered under the previous law, in accordance with the legal rules in force as of the date in which each proceeding has begun.

Additionally, some other aspects of the FLL were also modified as a result of the reform, including certain generalities, as well as changes in the litigation procedures. Those topics are addressed in separate articles within this issue of the Newsletter.