With a recent amendment to the Federal Labor Law, Mexico has introduced changes to its system of employment law justice, intended to create a more streamlined and expedited procedure for resolving employment law disputes. Further changes relate to the organisation of union registration, membership and strikes.

By: Jorge De Presno Arizpe, Alvaro Gonzalez-Schiaffino and Sofia Gomez

Firm: Basham, Ringe y Correa SC

On 11 April 2019, the Chamber of Deputies approved a bill to amend the Federal Labor Law (the ‘Law’) and on 29 April 2019, the Senate approved the bill in a full vote. On 1 May 2019, coinciding with International Labour Day, the executive decree enacting these changes to the Law was published in the Federal Official Gazette.

Background

The amendment to the Law derives from three sources:

  • amendments to Mexico’s Federal Constitution in matters of labour justice in effect since 24 February 2017;
  • principles and directives set forth in Chapter 23 and Annex A of the United States-Mexico-Canada Free Trade Agreement (USMCA);
  • Convention No. 98 of the International Labor Organization (‘ILO’), which was ratified by the Mexico’s Senate on 27 September 2018.

What do the amendments involve?

The amendments will transform Mexico’s employment law justice system as set out below.

The existing Conciliation and Arbitration Labor Boards that currently deal with employment law disputes are to disappear and be replaced by labour courts assigned either to the federal or to state (local) judicial branch of government.

All matters that reach these courts will be heard in the presence of a judge and the rulings to be issued resolving disputes will be judgments of law, rather than equity.

The labour law rules of procedure are substantially amended. New sets of rules are introduced, as follows:

  • Employers and employees will be subject to a procedural prerequisite to attend and complete a conciliation stage prior to filing any judicial action with a labour court.
  • A new, mainly oral, ordinary employment law procedure will be implemented, but it will also involve a written stage.

During the prosecution of all stages of a new proceeding, the labour courts will comply with principle of prioritising oral proceedings. In particular, hearings will respect the principles of:

  • Immediacy: the judge will be present at all times during hearings with the parties.
  • Continuity: in general hearings and the proceedings will not be interrupted, meaning that motions to delay will be limited and very specialised.
  • Concentration: documents relating to the merits of the case will be integrated exclusively in one file (in contrast to the previous system, in which different motions could end up in several files).
  • Publicity: hearings are open to everyone and unless otherwise provided, files will be available to consult.

As a result, the process of resolving labour disputes is expected to be more efficient and expedited.

A notification and communications system between the authorities and the parties is proposed, using information technology to expedite labour law procedure.

Creation of a Federal Conciliation and Registration Center (the ‘Conciliation Center’)

At federal level, the Conciliation Center will be in charge of:

  • conciliation proceedings;
  • registration of union contracts, internal work rules, and labour organisations and their officers.

At a state level, there will be Conciliation Centers that will only be in charge of conciliation proceedings.

Amendments to collective bargaining rights

The bill acknowledges that union members will be entitled to exercise a number of rights of free affiliation and participation in labour organisations. The most important are the following:

  • No one may be forced to join any labour organisation.
  • Individuals have the right to be elected as a member of the managing board of a labour organisation through the exercise of the personal, free and secret vote of each member.

The execution, filing and registration of a union contract will be conditional upon the securing of a so-called ‘union certification record’, in which the union must provide evidence that it represents at least 30% of the majority interest of the employees and that these employees have expressed to the union their intention of taking up membership.

All existing union contracts should be reviewed according to the procedure set out for this purpose within a maximum term of four years following the effective entry into force date of the Law.

Any notice of intention to strike for the purpose of entering into a Collective Bargaining Agreement or salary or benefit adjustment revision must be filed accompanied by a union certification record; otherwise, the strike notice will be null and void. The purpose of this procedure is to terminate any notice of strike that is not supported by or representative of the employees of the workplace

No change or amendment is currently made to the current employment outsourcing regime, therefore the provisions contained in the Law relating to outsourcing remain in full force and effect; however, in the event of a future change or amendment, this will be reviewed during subsequent legislative periods.

Transitional provisions

  • The Organic Law governing the Conciliation Center will be issued within six months following the effective date of the new Law.
  • The registration of Collective Bargaining Agreements and labour organisations with the Conciliation Center will begin within a term not to exceed two years from the effective date of the new Law.
  • The Conciliation Center will implement the conciliation stage within a term not to exceed four years following the day after the Law becomes effective.
  • The state Conciliation Centers and state labour courts must be open for operation within three years from the effective date of these amendments.
  • The Labor Boards, at federal and state level, as well as the Ministry of Labor, will continue to hear ordinary and collective proceedings and registry procedures that begin after the Law becomes effective until the labour courts and Conciliation Center are incorporated in accordance with the legal terms set forth in the transitional articles.