Labor Reform in Mexico: Perspectives of the Labor Framework
Firm News
22 June 2010
Mexico, D.F. June 22, 2010.- On June 18, the 99th Session of the International Labor Conference took place (ILC). At ILC context, representatives from the Mexican Tripartite Delegation and the Secretary of Labor and Social Welfare, Javier Lozano Alarcón, held a meeting with the Secretary-General of the Organisation for Economic Co-Operation and Development (OECD), José Ángel Gurría, in order to exchange views and recommendations to enrich and promote the Labor Reform in Mexico.
Lic. Jorge A. de Regil and Lic. Ricardo Castro, partners of the Baker & McKenzie México Labor practice group, participated in this meeting as members of the Mexican Tripartite Delegation.
Based upon the meeting, we wish to share the following information:
• In the next months, Mexico will host a Seminar on competitiveness and productivity focused to workers, employers and the government, which shall be jointly organized by the OECD, the World Economic Forum and the Secretariat of Labor and Social Welfare.
• In our country, the Labor Reform’s main purpose is to generate more and better employment, supported by the modernization of its main structures, one of them the labor framework, where globalization establishes new competitiveness, productivity factors and social inequality reduction.
• The income disparity factor is also relevant, since by means of decent employment, training and equal opportunities is possible to reduce the difference between the richest decile and the poorest decile (in our country this difference is 25 times higher, when the OECD sets forth an average of 9 times).
• About flexibility in the labor market; relates to a balance between protection and the contracting capacity, and to try not to place all the burden upon the employer and also, that the domestic employees or women, for example, find equality as regards labor and social welfare.
• Limiting wages accumulation in the event of unfair dismissal, which turns into an incentive to the intentional extension of the labor proceedings, hindering new hiring (in Mexico the average to settle an unfair dismissal case is 38 months)
• This new employment framework should provide that severance payments be regulated pursuant to the regulations existing in other countries (in Mexico the compensations paid are above the average).
• One of the aspects which should be promoted in the country is the productivity within the labor force; therefore, compensation should be linked to the productivity factor.
• Our labor laws should be amended to allow global policies from multinational companies be inserted in a more practical and effective way.
• Finally, it is worth mentioning that outsourcing figure should not exist, temporary hiring should be limited to a term appropriate to the real purpose so as to observe the worker’s rights as regards social welfare and employment relationship with the employer.