As consequence of the amendment to article 123 of Mexican Constitution published in the Mexican Official Gazette (MOG) on February 24th, 2017, on May 1st, 2019 the “Decree to amend, add and derogate several dispositions of the Mexican Labor Law (MLL), the Federal Judicial Power Organic Law, the Federal Law of the Public Defense Attorneys, the National Housing Fund Institute Law and the Social Security Law, on Labor Justice, Union Freedom and Collective Bargaining” (the Decree).
On terms of Transitional Article First of the MLL Amendment, such amendments entered into force on May 2nd, 2019. However, diverse transitional articles establish different terms to constitute the new labor authorities.
Among the new authorities we can find: a Federal Registry Organism (Conciliation and Labor Registry Federal Center), Local Conciliation Centers (one per federative entity) and Labor Tribunals (both at local and federal level), which must be constituted in the terms established in the transitional articles, so that the Labor Amendment fully enters into force.
While the new organisms and tribunals are constituted, the Labor Ministry (STPS), as well as the Conciliation and Arbitration Boards (CAB) will establish the proceedings in which the rights and obligations established by the Labor Amendment, and will continue with their prior attributions and functions. In order to do so, STPS must issue a protocol of action in which the formalities and corresponding authority are determined for, among others, unions’ representativeness confirmation, update of union members lists, and union leaders election, registry and ownership of the collective bargaining agreements. The Constitutional Amendment established two main lines: a collective line and a Labor Justice line, along with other important amendments. These main lines were approached by the May 1st, 2019 amendment which established diverse faculties and terms.
- A Conciliation and Labor Registry Federal Center will be created, which will be in charge of unions and collective bargaining agreements registration. It must initiate functions within two years after the Decree enters into force. While Conciliation and Labor Registry Federal Center is constituted, the STPS and CAB will continue with registry functions.
- As part of the right to organize, the MLL Amendment established that no one shall be forced to be part of a union, federation or confederation; personal, free and secret vote is also protected.
- In the aviation industry, the existence of a collective bargaining agreement applicable to all workers will not be an obstacle for the coexistence of a guild collective bargaining agreement for pilots and flight attendants. This disposition can be found in the special chapter of Aeronautic Crew Work.
- The unions must adequate their bylaws within 240 days after the Decree enters into force, in order to establish the leaders’ election procedure through personal, free, direct and secret vote.
- The proceeding to sign an initial collective bargaining agreement (CBA), which must always comply with representativeness standards, is established. In general terms, there are three ways:
- By parties’
- By request of the union. Union must prove to the Conciliation and Labor Registry Federal Center its representation of at least 30% of the workers to whom the CBA will apply.
- By workers’ “consultation”. This way applies when there is more than one union intending to represent the workers.
In case representativeness is proved, the Conciliation and Labor Registry Federal Center will issue a “representativeness record”, which is necessary to start the negotiations of an initial CBA or to call to strike if applicable.
- Diverse ways of voting or “consultation” are established for workers, guaranteeing a free, personal and secret vote. In some cases, vote must be issued “directly” as well, which implies a prohibition to vote indirectly or by means of a proxy. Among matters to be voted, we can find:
- Determination of the union representing the majority of the workers, in order to negotiate an initial CBA.
- Approval of the initial CBA terms.
- Workers’ approval of the negotiation terms regarding an existent CBA.
- CBA’s ownership in case there is a dispute between unions regarding representativeness.
- Union’s leaders election.
- To extinguish a CBA by mutual consent. In this case, majority of workers must agree and the proceeding of registration and review must be followed before the Conciliation and Labor Registry Federal Center.
While the Conciliation and Labor Registry Federal Center is constituted, the STPS or the CAB will verify the elections and issue the representativeness records, union’s representation record (toma de nota) or any other related matter. This situation may derive in temporary formalities to vote until conciliation and Labor Registry Federal Center starts to work.
Regarding union’s representation records (tomas de nota), the authorization of the members’ lists and the bylaws will be made by the STPS or the CAB.
- With the objective of complying with Mexican Constitution, as well as with international obligations acquired by the Mexican State, the existent CBAs must be reviewed at least once within four years after the Decree enters into force. In case any CBA is not reviewed or in case such CBA does not have the support of the majority of the workers, the MLL established its termination, but working conditions established in it will keep in force.
- The unions may lose their registration if they do not act accordingly with their objective. This situation may arise whenever leaders or representatives commit acts of extortion.
LABOR JUSTICE LINE
- The Conciliation and Labor Registry Federal Center will start receiving conciliation requests within four years. While such Center is constituted, the Federal CAB will be the conciliatory organism for federal labor matters.
- Local Conciliation Centers will be constituted. Such centers will function as conciliators for local labor matters, as established in Mexican Constitution. Centers must start operating within three years and while they are constituted, local CABs will be the conciliatory organism for local labor matters.
- A tribunal of the Federal Judicial Power (Federal Tribunal) and a tribunal in each federative entity (Local Tribunals) will be created. Regarding Local Tribunals, each entity will establish its particular regulation.
- These tribunals will hear about labor conflicts, whether individual or collective, which may arise between workers, employers, and/or unions.
- Local Tribunals will start operations within three years, while Federal Tribunal will start operations within four years.
While Tribunals are constituted, Federal or Local CAB, as applicable, will keep hearing about disputes.
- Active proceedings at the day the Decree enters into force will be solved and concluded by STPS and CABs.
- Proceedings initiated after the Decree enters into force will be started before the STPs or the applicable CAB, until Tribunals and the Conciliations Centers start operating. New legislation will be applied in all new cases.
OTHER IMPORTANT AMENDMENTS
- Beneficiaries’ designation in the individual employment agreement. As of May 2nd, 2019, it is mandatory to designate beneficiaries for accrued but unpaid salaries and benefits in case of death or disappearance of the worker.
- CBA delivery. Employer must deliver employees a copy of the initial CBA and after each review, free of charge, within 15 days after its submission before the Conciliation and Labor Registry Federal Center.
- Home workers. In the special regime of Home Workers, there is a new obligation to enroll such workers before the Social Security Institute and to pay corresponding fees.
- Severance deposit before Tribunals (before CAB during transition period). In the case of workers listed in article 49 of MLL (workers with a seniority lower than 1 year, workers in direct contact with the employer, trust-dependent employees, home workers, and temporary workers), the employer may deposit severance before corresponding Tribunal, prior initiation of a paraprocedural proceeding.
- New action protocols. As part of the new employers’ obligations, action protocols to prevent the following matters must be established:
- Gender discrimination
- Child work erradication
- Attention in case of:
- Sexual harassament
- Family responsibilities. It is guaranteed that women and men have the same rights and obligations. With the objective of protecting male and female workers with family responsibilities, equal treatment and opportunities are granted.
- Union fees discount. Workers are able to request in writing their will to not pay union fees. In such case, employer may not withhold union fees by any means.
- Termination notice. Lack of termination notice to the worker, whether personally or by means of the competent Tribunal, will presume there is no cause for termination. However, it is now possible to prove otherwise in trial, so exceptions and defenses may be now invoked afterwards to prove the dismissal was justified by cause, as long as strong evidence is available.
In order to implement this labor amendment, whether at a local or at a federal level, the Coordination Counsel for the Implementation of the Amendment will be created. It will have as objective to establish the policies and promote national coordination as needed. The CABs, both federal and locals, will establish the actions that will be taken to conclude active trials.
The purpose of this communication is to inform the strategic lines of the amendment, so it must not be considered a legal advice.
BSN Bufete Sánchez-Navarro, S.C. is able to give particular counsel on specific matters as required by our clients.