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Mexico

January 26, 2021

By Francisco Udave Treviño and Andrés Rodríguez

Back to International Employment Law

Mexico

KEY DEVELOPMENTS FOR 2020


 

Reform of Mexican Federal Labour Law

Labour and employment matters have been subject to huge changes in the last year. As part of the negotiations for the new North American Free Trade Agreement (the United States-Mexico-Canada Agreement ("USMCA")), a reform to the Mexican Federal Labour Law was recently enacted to ensure it is consistent with the Constitutional Reform of 24 February 2017.

There are two main topics dealt with by the reform; the first being the provision of justice, moving from justice granted by the Executive Power (Conciliation and Arbitration Boards) to justice granted by the Judicial Power (Labour Courts). The second topic relates to union and collective matters. Principles such as transparency and democracy have been reinforced under the new law.


 

The New United States-Mexico-Canada Agreement

The new United States-Mexico-Canada Agreement ("USMCA") came into force on 1 July 2020. The new USMCA comes with an array of labour challenges as, for the first time, any alleged failure in the fulfilment of labour obligations by Mexican companies (or U.S. and Canadian companies with Mexican subsidiaries) covered by the USMCA may result in a complaint being filed with a U.S. Government panel, which is legally entitled to impose sanctions.

 

KEY DEVELOPMENTS FOR 2019


 

Creation of the Federal Labor Conciliation and Registry Institute

New rules have been submitted to the Senate and the House of Representatives to approve the setting up of a new Labor Conciliation and Registry Institute at Federal Level. If approved, the new Institute will be responsible for offering mandatory conciliation between employees and employers prior to litigation. This will only apply to employers in the federal jurisdiction. The Institute would also be tasked with registering collective bargaining agreements.


 

New procedural rules on employment related litigation

New procedural rules for employment litigation have been submitted to the Senate and the House of Representatives for approval. One of its aims is to bring current proceedings in line with the changes that are being made as a result of the new mandatory conciliation obligation (see above). New Labor Courts will also need to be set up, which would form part of the Judicial Branch, as opposed to the Executive Branch.


 

New rules on collective bargaining agreements

New rules advocating for the enhancement of Union Rights have been submitted to the Senate and the House of Representatives for approval as a result of the ratification of Convention 98 of the International Labor Organization and the recently signed United States, Mexico and Canada Agreement (in substitution of NAFTA). If approved, employers and business friendly unions (i.e. inactive unions) will no longer be able to enter into employer friendly collective bargaining agreements.

 

KEY DEVELOPMENTS FOR 2018


 

Creation of the Federal Labour Conciliation and Registry Institute

Subject to the approval by the Senate and the House of Representatives, a new Institute will be in charge of mandatory conciliation between employees and employers, as well as registering collective bargaining agreements.


 

New Regulation Regarding Subcontracting (Outsourcing) Regime

A new initiative will change the current legal provisions establishing requirements for this type of work, providing greater certainty to workers and the contracting parties.


 

New Procedural Rules on Employment Related Matters

Subject to the approval by the Senate and the House of Representatives, all proceedings will need to go through mandatory conciliation prior to filing a lawsuit.

Labor Courts will be created which form part of the Judicial Branch, as opposed to Conciliation and Arbitration Boards belonging to the Executive Branch.

 

KEY DEVELOPMENTS FOR 2017


 

New forum for employment claims

Subject to the approval by the House of Representatives, employment related conflicts shall now be transferred to the new labour courts as opposed to Conciliation and Arbitration Boards for resolution.


 

New requirements to register a collective bargaining agreement

An initiative which would impose far more burdensome requirements on both employers and unions (in order to register a collective bargaining agreement to ensure that workers are aware of the existence of such collective agreements) is under review. There is also a proposal for a law to require unions to evidence workers’ representation when calling for the execution of a collective bargaining agreement.


 

New strike procedures

Several specific formal procedural rules have been proposed and are under review with the purpose of further regulating strike procedures and voting evidence.

 

KEY DEVELOPMENTS FOR 2016


 

Resolutions by Federal Courts regarding outsourcing

A non-binding finding was made which held that it is possible to pierce the corporate veil in order to determine whether several legal entities are from the same corporate group and form an economic unit which is jointly liable for employment related obligations.


 

Prevention of discrimination

During 2016 we saw an increase in initiatives with the purpose of eradicating employment discrimination towards pregnant women, the disabled, and LGBT people.


 

Increase in union conflicts regarding representation claims

During 2016 there was a significant increase in representation claims through which different unions claim to represent the majority of the workers at a certain workplace, in particular in the mining, automotive and hotel industries.

With thanks to Francisco Udave Treviño and Andrés Rodríguez of Santamarina y Steta for their invaluable collaboration on this update.

Contributors

Image: Suzanne Horne
Suzanne Horne
Partner, Employment Law Department
Image: Kirsty Devine
Kirsty Devine
Associate, Employment Law Department
Image: Aashna Parekh
Aashna Parekh
Associate, Employment Law Department