Amendment of Mexican Labor Law Is Finally Effective

After only five months in office, President López Obrador—who won by a landslide during the last presidential election and whose political party holds the majority of Congress—amended the Mexican Federal Labor Law and other applicable laws on May 1, 2019. The Mexican labor law amendment was pending per the latest constitutional reform in February 2017 and, strictly speaking, this amendment was delayed but is finally on track.

International treaties such as International Labour Organization Convention 98 (The Right to Organize and Collective Bargaining Convention, 1949) and the United States-Mexico-Canada Agreement (USMCA) gave a little push to the Mexican government to get the Mexican labor law amendment back on track. The amendment’s main pillars are the following:

Incorporation of a National Federal Registry of Unions and CBAs and Conciliation Center.

Within the next 180 days, Congress needs to draft the law that will regulate this registry and conciliation center. This registry and conciliation center shall be operating approximately two years from now and their main activities will be the following:

Conciliation: Prior to any labor claim being filed, every employee will need to attempt to solve his or her (and even union) issues amicably by trying to conciliate by negotiating. If a solution to the dispute through conciliation is not possible, then a certificate will be issued by the center. The certificate will be a requirement for filing a labor suit before the courts.

National Registry: All unions and collective bargaining agreements (CBAs) will be registered before this institute. The new law will stipulate requirements where transparency and liberty will be the basis for unions to register and to operate, union directives will need to be voted on via a transparent procedure, and CBAs around Mexico will be filed and deposited in the registry.

Certificates. Finally, the conciliation center will issue certificates to unions demonstrating that the union has a sufficient percentage of representation prior the union files for a CBA or strike.

Labor Courts

Labor courts will now depend on the judicial branch, which will need to be incorporated. It is expected that local courts will be ready within three years and the federal courts will be ready in four years.  Local courts will have jurisdiction over local labor matters, and federal matters will handle matters that are clearly included in the Mexican Constitution and in the Mexican Federal Labor Law.

For now, all matters will continue to be handled before the boards (dependent on the executive branch), and government needs to speed up processing of claims.

Union Classifications

Distinction between different types of unions will no longer exist. The current white, red, active, and nonactive classifications will no longer be applicable. As a result of international treaties and the Mexican Labor Law amendment, unions were heavily impacted. The amendment provides more responsibilities to unions and enables employees to participate more freely in union activity, if they wish to do so. Notwithstanding the date of incorporation of the union, the union will need to enroll itself before the Federal Registry and Conciliation Center. Unions will need to update their bylaws, determine their new directives and the means of the election, and provide information about quotas and assets every six months.

The relation between employers and unions will be heavily impacted. Currently employers that have CBAs will need to make sure that (i) employees are aware of the CBA, (ii) that they are aware of their actual union/directive, (iii) and that the union engage in actual representation of the employees by submitting the needed required information to the authorities (currently the board or labor ministry) since failure to do so, within the next four years, will result on immediate termination of the existing CBA. The previous, opens the opportunity for any union (representing at least 30 percent of the workforce) to represent workers and sue for strike requires the execution of a new CBA.