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AMENDMENTS TO THE FEDERAL LABOR LAW

On April 11, 2019, the Chamber of Deputies approved the bill to amend the Federal Labor Law (the “Law”) and on April 29, 2019, the Senate in a full vote also approved such bill.

On May 1st, 2019, in coincidence with the International Labor Day, the executive decree by which several provisions of the Federal Labor Law are amended or derogated was published in the Federal official Gazette.

BACKGROUND.

The origin and basis of the “Amendment to the Law” come from three sources:

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

CONTENT OF THE AMENDMENT TO THE LAW.

Transformation of labor-law justice system.

  • The existing Conciliation and Arbitration Labor Boards are to disappear and be replaced by labor 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 solving the disputes will be judgments of law, rather than equity.
  • The labor-law rules of procedure are substantially amended. New sets of rules are introduced: (1) employers and employees will be subject to a procedural pre-requisite to attend and complete a conciliation stage prior to filing any judicial action with a labor court, and (2) a new ordinary employment-law procedure, mainly oral, will be implemented, but with a written stage.
  • The labor courts will comply, during the prosecution of all stages of a new proceeding, with principles of orality, immediacy, continuity, concentration and publicity; thus, it is expected a more efficient and expediting process.
  • A notification and communications system between the authorities and the parties is proposed by using information technology for expediting the labor-law procedure.

Creation of a Federal Conciliation and Registration Center (the “Conciliation Center”).

  • At federal level, the Conciliation Center will be in charge of: (1) conciliation proceedings and (2) registration of union contracts, internal work rules, and labor organizations and their officers.
  • At a state level, there will be Conciliation Centers to be in charge of conciliation proceedings, only.

Amendments to Collective Bargaining Rights.

  • The bill acknowledges that union members will be entitled to exercise the following rights of free affiliation and participation in labor organizations; the most important are the following:
  •        No one may be forced to join any labor organization, without retaliation.
  •        Be elected as a member of the managing board of a labor organization through the exercise of the personal, free and secret vote of each member.
  • The execution, filing and registration of a union contract will be conditioned upon the securing of a so-called “union certification record,” whereby any union shall evidence that it represents at least 30% of the majority interest of the employees and that such employees have expressed to the union their intention of membership.
  • All existing union contracts should be reviewed according to the procedure set out for such purpose within a maximum term of four years following the effective entry date of the Law.
  • Any notice of intention to strike for the purpose of entering into a Collective Bargaining Agreement or salary and/or benefit adjustment revision will be filed accompanied by a union certification record; otherwise, such strike notice will be null and void. The purpose of this procedure is to terminate any notice of strike not being supported or represented by the employees of the workplace

No change or amendment is currently made to the current outsourcing regime, therefore the provisions contained in Article 15-A of the Law remain in full force and effect; however, in the event of a future change or amendment, it will be reviewed during subsequent legislative periods of times.

TRANSITORY ARTICLES.

  • The Organic Law of the Conciliation Center will be issued within the six months following the effective date of the new Law.
  • The registration of Collective Bargaining Agreements and labor organizations 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 labor courts must be open for operation within three years from the effective date of the amendments.
  • The Labor Boards, at federal and state level, as well as the Ministry of Labor, will continue to address the ordinary and collective proceedings and the registry procedures, that begin after the Law becomes effective until the labor courts and Conciliation Center are incorporated in accordance with the legal terms set forth in the transitory articles.

SINCERELY,

Jorge de Presno
Álvaro González
Sofía Gómez
jorgedepresno@basham.com.mx
agonzalez@basham.com.mx
sgomez@basham.com.mx

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