As part of the international commitments recently assumed by Mexico, on April 29, 2019, the Chamber of Senators approved the Bill through which Several Provisions of the Federal Labor Law and certain secondary laws in matters of Labor Justice, Freedom of Association and Collective Bargaining are amended (the “Reform“). The Reform will enter into force as soon as it is published in the Federal Official Gazette.
Below please find the most relevant pieces of the Reform.
1. LABOR AUTHORITY
- The Conciliation and Arbitration Labor Boards (the current labor authority) are eliminated. Labor disputes will be resolved by the Courts which depend on the judicial branch (Labor Courts).
- The Conciliation and Registry Labor Centers (“the Labor Centers”) will be the Conciliatory Authority in which the parties must appear before starting a labor conflict. Collective Bargaining Agreements at both federal and local levels must be registered before the Federal Conciliation and Registry Labor Center.
- Modifications to the labor procedure are established, such as: a mandatory initial conciliation stage, new rules for offering and presenting evidence, procedures for the deposit of severance before the Court in the event that a reinstatement is not applicable, rules for the burden of proof, use of technologies during the procedure, among others.
- The following actions will be considered inappropriate: to require the execution of blank papers at the time of hiring, alteration of a document signed by the employee, and demand the ownership of a collective bargaining agreement without having any workers affiliated to the corresponding Union, among others.
- The Local and Federal Conciliation Courts and Centers should begin its duties in three years and four years respectively, as of the effective date of the Reform. The registration activities of the Conciliation Centers will begin in the following two years as of the effective date of the Reform.
- The matters currently in process before the Ministry of Labor and the Labor Boards will be concluded before these authorities, in accordance with the law in force at the time of the beginning of such matters. Likewise, the Labor Board will resolve all the labor processes that begin after the effective date of the Reform until the Labor Courts enter into their duties.
2. FREEDOM OF ASSOCIATION AND COLLECTIVE NEGOTIATION
- Unions must adapt their statutes to guarantee union democracy, including the election of the board members through a personal, direct, free and secret vote. The aforementioned must be done within one year as of the entry in force of the Reform.
- The Federal Conciliation Center will establish a consultation procedure on collective bargaining agreements and the negotiation of annual reviews, including a record of representativeness of the Union, the distribution of such consultation in the workplace and the worker’s approval to the negotiations through a personal, free and secret vote.
- The collective bargaining agreements currently in place should be reviewed at least once a year during the next four years following the entry into force of the Reform. If this revision is not made within such period and in accordance with the new consultation processes by the workers, the agreement will be terminated.
- Employers are prohibited from interference with the decision of workers with respect to who should represent them in collective bargaining, or perform any act to exercise control over the union to which the workers belong.
- If unions incur in extortion acts against employers in order to desist from a strike or claim of ownership, this may result in the cancellation of the union registration, among other penalties.
- Exclusion clauses for separation of the Union in collective bargaining agreements are prohibited.
3. NEW EMPLOYER OBLIGATIONS
- The main obligations for employers effective as of the entry into force of the Reform are the following:
- Include in the individual employment contracts the beneficiaries of the employees in case of death or disappearance, in terms of the Law.
- Delivery of salary receipts to workers in printed form, including the breakdown of the earnings and deductions for the time worked, which must be signed by the employees. However, these can be replaced by digital tax receipts (CFDI) and will serve as evidence if they are verified in the Tax Administration Service website.
- Provide employees with a copy of the collective bargaining agreement and its annual reviews within 15 days after its filing it in the Federal Conciliation Center. The delivery can be evidenced with the signature of receipt of the employee.
- Implementation of a protocol of anti-discrimination, workplace violence and sexual harassment.
- Establish and distribute in the work center the procedure requested by the Federal Conciliation Center regarding the consultation of collective agreements and the procedure requested by the Union regarding the negotiations of collective bargaining agreements.
- New obligations are established for employers in special jobs, such as jobs in the mining industry, crew and aeronautics, field workers, etc.
- Employers must register domestic workers in the compulsory social insurance regime, once the necessary regulatory adjustments are approved and entered into force.
The Hogan Lovells employment team in Mexico has extensive experience drafting employment and labor contracts, based on the specific needs of the business and the new legal framework. If your employment and labor agreements need to be reviewed in light of this Reform we are ready and able to assist. Should you require specific advice on this Reform and potential implementation, please feel free to contact us.