Mexican President Signs New Labor Law

May 03, 2019

President Andrés Manuel López Obrador signed labor law reform legislation containing wide-ranging changes that will affect every business with operations in Mexico—not least in the elimination of “protection” or “white union” contracts.

Provisions in the bill include—but are not limited to: 

  • Trade union recognition and ratification of collective agreements will be subject to majority vote.  Thirty percent of employee support will result in recognition and new CBAs will need to secure majority employee support.  The machinery for supervising votes will not be in place for some time—and “interim” processes will be put in place over the next three months.

  • Conciliation and Arbitration Boards will be replaced by Courts of the Federal Judicial Power and state courts with powers to resolve labor disputes arising between employees and employers.  Federal courts will start to operate over the next four years and state courts will start operations within three years.

  • A new Federal Center for Conciliation and Labor Registration will oversee conciliation at the federal level and will preside over the registration of unions and collective bargaining agreements.  It will be two years before the agency will start registration activities.

  • Work must be carried out in a way that assures dignity and health for employees and their dependent family members.  The law calls for a work environment free of discrimination and violence.  Pregnant women gain additional rights in cases of dismissal or discrimination.

  • Acts that disguise the existence of an employment relationship to avoid compliance with labor and social security obligations, and registration of employees with salaries lower than the actual salary earned, are outlawed.

  • Individual employment agreements must include the appointment of beneficiaries in case of death of the employee or if the employee is declared as missing.

  • Agreements entered into without the involvement of the authorities shall be valid and may only be claimed null and void with respect to any employee waiver of rights, but the remaining provisions of the agreement shall remain in full force and effect.

  • Employers must deliver notice of termination of employment directly to the employee or through the labor authorities and a failure to do so will be deemed wrongful dismissal.  Other employer actions, like requiring employees to sign blank pages on hiring or during employment, will be illegal.

Outlook:  Prepare for a time of uncertainty as laws are put in force which encourage trade union organizing in the absence of regulating machinery.  In the words of AFL-CIO President Richard Trumka: “This will be a mess.”