Newsletter March 02/2019 – Reforms to Labor Regulations

As part of the execution process of the new Commercial Treaty Mexico, United States and Canada (T-MEC), Mexico accepted to be part of “Agreement 98” of the International Labour Organization (ILO).

Agreement 98 main purpose, is to provide free association access with Unions, granting to workers the possibility to join new Unions, and the obligation to employers to recognize the Unions with whom a Collective Union Contracts is executed(*).

As result of amendments to Federal Constitutional provisions on labor matters, and to Mexican Congress ratification of Agreement 98, labor reforms at secondary legislations are expected to be effective from May, 2019. Most relevant reforms:

  1. Elimination of the current labor justice system

Current Labor Courts (Juntas de Conciliación y Arbitraje), will be replaced by State and Federal Labor Tribunals, who will be responsible of solving conflicts between employees and employers.

Creation of a decentralized and autonomous entity (the Entity) for Conciliation and Registration.

New judicial process will have to be followed: (a) employees and employers before going to the Labor Tribunals, must go to the Entity for a mandatory conciliatory audience. In case of local controversies, audience shall be conducted at local Conciliatory Centers.

The Entity will also be responsible for the registration of all Unions, and Collective Union Contracts.

  1. Unions and Collective Union Contracts

Negotiations between employers and Unions must ensure legit interest of both workers and employers, seeking to guarantee the following principles: (a) certainty in the execution, registration and deposit of the Collective Union Contracts, (b) effective representation of Unions, (c) all Unions shall be “Active”, (e) free selection of Unions by workers, will allow to have more than one Union at the same company.

Registration of all Collective Union Contracts, either local or federal, and all administrative procedures related shall be of the exclusive federal competence.

Reforms seek to reinforce relationship between workers and Union, by having a stronger link with Union’s directors, and more effective affiliation process with Union.

All Companies will be subject to inspections from labor authorities seeking to confirm (i) compliance with labor general conditions, safety and hygiene measures, (ii) training.

Derived from inspections, companies in breach of labor obligations will be subject to fines.

Companies without workers, shall have to prove such situation.

(*) Collective Union Contracts. Contracts executed between Unions and Companies as employers, establishing labor conditions for the benefit of workers members of such Union.