On Feb. 24, 2017, the Decree Relating to Employment Justice Through Which Different Paragraphs of Articles 107 and 122 of the Political Constitution of the United Mexican States are Amended and Modified (the Decree) was published in the Federal Official Gazette of the Federation. The Decree was approved by Mexico’s Federal Senate last October and by more than half of the local congresses of the states of Mexico throughout this year.

The Decree will become effective Feb. 25, 2017, and therefore the Constitution will have been amended on that date. The Decree sets forth a one-year time frame in which the federal and state congresses must enact and amend the relevant federal and local laws needed to comply with the Decree. Until such amendments are completed the Decree will not have significant impact on labor matters.

The purpose of this constitutional amendment is to introduce significant changes to the structure and operation of labor courts in Mexico. These changes provide for:

  1. Replacement of the Conciliation and Arbitration Boards with specialized labor courts or tribunals that will form part of the Judiciary Branch. The Conciliation and Arbitration Boards (whether federal or local) will no longer hear or resolve controversies arising from employment. New Federal and State employment courts or tribunals will be formed to take over these tasks.

  2. New mandatory conciliatory procedure before new specialized conciliation entities. In contrast with the current labor boards, the new employment courts or tribunals will not carry out conciliatory efforts. The Decree creates a mandatory conciliatory instance that must be satisfied before the matter reaches the employment courts or tribunals. That stage will be a single mandatory hearing.

    In labor matters that are heard by state courts, the new conciliatory instance will be administered by “Conciliation Centers.” The composition and function of which is to be set forth in local laws issued by each of the states of Mexico. In federal matters, this new conciliatory instance will be carried out by an independent federal decentralized entity that has not yet been named, and will be headed by an individual to be appointed by the Federal Senate out of a three-candidate short-list submitted by the Executive Branch. This individual will have a six-year term and the Decree allows for one reelection.

  3. Federal centralization of collective bargaining agreements and union organizations registration. The federal decentralized entity set forth above will be in charge of registering all collective bargaining agreements and all union organizations of any type, and will be responsible for substantiating all administrative procedures relating to these, setting forth that all such matters are of federal venue. States will no longer have any of these powers, which they previously enjoyed through the local Conciliation and Arbitration Boards.

  4. Requirement to prove the representation of the workers prior to requesting the execution of a collective bargaining agreement. Prior to the commencement strike actions seeking a collective bargaining agreement, a union will be required to prove that it represents the majority of the workers of a company. This provision aims to eliminate the practical need for employers to enter into so-called “protective” collective bargaining agreements through the disqualification of rogue unions, which previously, without representing employees, extorted employers with the use of strikes. Consequently, the Decree may also eliminate so-called “white” unions.

  5. Personal guarantee of a free and secret vote in union matters. The Decree guarantees the personal, free, and secret vote of workers to choose their union leaders, as well as in votes in the event of union conflicts.

Until the new employment courts or tribunals and/or the conciliation centers and the federal decentralized entity contemplated in the Decree are formed and begin to operate, the Conciliation and Arbitration Boards will continue to hear employment controversies and register and administer collective bargaining agreements and union organizations as they did before the publication of the Decree. Likewise, all proceedings initiated prior to these new entities being operational will continue to be processed under the laws in effect at the time they were initiated.