Mexico: Final stage to implement the Labour reform

published on 27 February 2023 | reading time approx. 2 minutes

On 1 May 2019, the Mexican Senate approved a new labour law reform in Mexico. This reform includes important changes in labour law that must be implemented by companies in stages. 1 May 2023 is the deadline set by the Mexican labour authorities for every company established under the laws of the country to comply with the third stage of the latest reform. Companies should do their due diligence to become fully informed about the impact of the reform on their activities.

The amendment establishes that companies have the obligation to begin the process of legitimizing the collective bargaining agreement that the company has signed with the Union with which it works collectively and that have been signed before the entry into force of such reform.

The purpose of this process is to eliminate the unfair practice that some companies had, in which they signed a protection contract between the company and a Union, which was not going to guarantee any reliable representation of the workers before the company; therefore, with this third stage of the reform, it is sought to have a clear, affordable and transparent labour justice in order to ensure the benefits of workers and employers according to Mexican labour law. The main benefit of this reform is that it will allow workers to determine who will represent them in the negotiation of their working conditions.

The legitimization process must be followed as shown below:

The Union shall initiate the process at the competent Labour Conciliation and Registration Center of each company, depending on its economic activity, in order to comply with the administrative process of identifying its file, the number of workers entitled to vote, the call for the election, the integration of an electoral commission; as well as the authority that will attest to the legality of the voting process;
Once the collective bargaining agreement has been legitimized, a contractual revision will be made, which requires the approval of the majority of the workers to whom said agreement applies, by means of a free and secret personal vote;
Finally, the Center for Labour Conciliation and Registration will issue the certificate of representativeness, which will also apply to all those collective bargaining agreements that are entered into after the reform;

The main change of this reform is that the company will not be able to participate in the election of the Union, interfere or influence in workers’ decisions, nor in the voting process of the collective bargaining agreement; however, it must provide all the facilities and support to develop the voting process so that the workers can decide whether or not they wish to continue with the current Union.

If the companies do not comply with such reform, the collective bargaining agreement that they have in force will: 1. lose its validity immediately, 2. give the opportunity to other Unions to become part of the relationship between the company and the workers, or 3. the workers may form an independent organization. Likewise, workers will lose their representation before the company immediately if they decide not to rejoin the Union.

To avoid future labor disputes that could cause further costs and penalties for the company, we recommend that the implementation of this reform be prepared quickly and that the legitimization process be initiated.