After the Mexican Senate ratified the ILO Agreement 98 on September 20, 2018, whereby Mexico adopted obligations to ensure labor union freedom and collective bargaining, so that a job may no be obtained or lost because of these concepts, there were indications that within one year a profound amendment to the Mexican Federal Labor Law ("FLL") would enter into force.

However, with the signing of the United States-Mexico-Canada Agreement ("USMCA") this process will be move forward quickly in order to be concluded prior to the end of 2018.

The labor chapter of the USMCA recognizes the commitments undertaken by the three countries within the framework of the ILO's Declaration of Principles and Fundamental Rights, such as a) freedom of association and the express recognition of a right to collective bargaining; b) the elimination of all forms of forced or mandatory labor; c) the effective abolition of child labor and d) the elimination of all forms of discrimination.

In particular, on the topic of freedom of association and the effective acknowledgment of a right to collective bargaining, Annex 23 of the Commercial Treaty sets specific obligations for Mexico which will surely afford greater clarity on how its labor legislation will be amended.

  • The FLL should establish a right of workers to involve themselves in collective bargaining or protection activities and to organize, form or join the labor union of their choice.
  • Prohibit the domination or interference of employers in labor union activities, and also prohibit discrimination or coercion against workers for union support activities or because of their refusal to join a duly recognized union.
  • The creation of an independent entity that will verify that collective bargaining agreements comply with legal requirements in support of workers, so that they may be freely registered without any outside coercion or interference.
  • Establish the following requirements to officially register a collective bargaining agreement:
    1. That the workplace be in operation;
    2. That workers have access to the agreement;
    3. That the majority of workers covered by the agreement have expressed their support through a personal, free and secret vote.
  • Verify majority support for future negotiations (salary /general workplace conditions) for all existing collective bargaining agreements, through a personal, free and secret ballot.
  • Existing collective bargaining agreements should be reviewed at least once every four years after the legislation has become effective.This does not imply the termination of any existing agreement, as long as it is demonstrated that there is the support of the majority of workers in the terms outlined above.
  • Collective bargaining agreements and documents relating to the labor union should be made available to all workers, in accordance with the General Transparency and Access to Information Law.
  • Have in place a centralized website with all collective bargaining agreements in force, to be managed by an independent entity.

Parties to the USMCA expect Mexico to make the necessary changes to its laws prior to January 2019, given that the entry into force of the USMCA could be delayed until such laws become effective.

As may be expected, the above changes will signify a profound transformation of collective labor relations in Mexico.

At Baker McKenzie, we believe that this is an excellent moment to act in a preventive manner, reviewing the existing structures of collective hiring.

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