Preview of Protocol in Mexico for Existing Union Relationships

7/19/19

For followers of the Mexico story, you will be aware that from 2nd May, 2019, new rules applied to the recognition of trade unions and the ratification by employees of any new collective bargaining agreements.  As yet, the machinery to assure compliance with the laws has not been put in place—this will happen over a period of four years ending in 2023.

On 2nd August, the government will issue a new and important protocol that explains how current collective bargaining agreements will be dealt with, including so-called protection contracts and agreements with “white” or “red” unions.  

For the estimated 95% of companies in Mexico operating under protection contracts this is extremely important.

The protocol is under public consultation at the moment, but will be published on or before the 2nd of August.  For anyone planning or implementing their future strategy, getting to grips with this document is crucial.  So, what does it say?

If an employer has a current CBA—no matter how it was arrived at—the union must consult with employees to determine if there is support for the union that has negotiated the current CBA before it can be renewed.  The process is as follows:
  • The union must notify the Labor Department that it intends to conduct a consultation process with employees in a company.
  • The consultation process will involve a ballot of all employees covered by the agreement and may be conducted by a Labor Department official or a notary public.
  • If more than 30% of those eligible to vote support the union, the Labor Department will approve the consultation and the union must inform the employer.  The union will then be able to renegotiate the terms at a future date. 
  • The date, time, and address for the consultation will be established by the union.
  • Prior to the consultation process, the employer must deliver a copy of the current CBA to all employees.
  • Ten days prior to the consultation vote, the union must publish an invitation at the workplace for the employees to appear to vote.
  • The vote results will be published at the workplace.
  • If the union is not supported by 30% of employees or is not otherwise updated in accordance with the new law by May of 2023, it will be considered terminated.
There are many key practical elements to consider—here are just a few:   
  1. The union decides if and when to look for support for the union.
  2. 30% of the bargaining unit (usually the location) must vote in favor of the union to secure the agreement—anyone not voting is a vote against.
  3. Any current CBA cannot be renegotiated or adjusted without the union securing 30% support in a ballot.  If the union does not seek support, then the CBA becomes a “zombie” agreement until May 2023—i.e., it continues to exist but cannot be updated and the company is free to change terms and conditions unilaterally.
Logical union behavior would be to contact the company and seek an agreement to go together to the workforce (remember, they probably do not know the union or the agreement exists) to secure the 30% necessary to go forward.  Getting your answer to any such approach is crucial—especially if you have the objective of being “non-union” going forward.

This is complicated and of course this is a summary.  If you would like to talk it thought, feel free to contact Alan Wild at awild@hrpolicy.org or LAMERG Executive Director Steve Gilbert at sgilbert@lamerg.com.