There is a new labor ball game in Mexico, as the country has amended its relevant laws to be in compliance with the incoming USMCA (U.S.-Mexico-Canada Agreement, soon to be NAFTA's successor). Most importantly, (i) there will be real, working unions, meaning that collective contracts signed with employer-friendly unions (commonly known as protection contracts) will soon be out the door, which then (ii) will likely bring new leadership and more than one union to a company.
Therefore, it is certainly timely to take preventive action to be in compliance with the new labor laws, to strengthen Mexican human resources departments, to identify incoming new leadership, and to know what is or may be bringing restlessness to the work force.
The enclosed summary of recent Mexican labor law changes may help your company have a clearer picture of what has been approved. With labor-specialized attorneys in Mexico and the U.S., Foley & Lardner LLP is positioned to advise companies with employees in Mexico on how these changes may impact their businesses and on how to manage the new variables described above.
The USMCA, signed in November 2018, has already been approved by the Mexican Senate and is making its way through the legislative process in the U.S. and Canada. Though subject to political calendars, it is expected to be ratified by the three countries this year.
As part of its commitments under the USMCA (see Chapter 23 and Annex 23-A), Mexico obliged itself to reform its labor laws and has done so as described in this document. Notwithstanding that, the leadership of the Democrat-controlled U.S. House of Representatives has shared that enforcement of the labor reform is a concern before the agreement can be put to a vote; environmental concerns and prescription drugs have also been raised as issues requiring attention.
Labor Reform in Mexico
On February 24, 2017, Mexico amended its constitution to give the highest legal support to the then incoming labor provisions:
International Labor Organization's (ILO) Agreement #98. Changes to the Mexican Federal Labor Law. ILO's Agreement #98
ILO's Agreement #98 deals exclusively with the right to form unions and collective bargaining. Like any other international agreement adopted by the country, its provisions rank second only to the Mexican Constitution. (We should note that there is no implementing legislation of international agreements in Mexico thus their provisions are applied as...