January 18, 2019

Key Points of the Bill to Amend the Federal Labor Law in Mexico

Holland & Knight Alert
Leslie Palma

Leer en Español: Puntos clave de la reforma a la Ley Federal del Trabajo en México

The House of Representatives in Mexico on Dec. 22, 2018, received a project to amend the Federal Labor Law (FLL) to regulate the Constitutional Amendments made to articles 103 and 123, in effect since Feb. 24, 2017, to comply the Agreement 98 of the International Labor Organization (ILO) as well as with the Annex 23 of the United States-Mexico-Canada Agreement (USMCA). The objective is to modernize the labor justice system in Mexico.

The following points are the most relevant changes to the FLL:

Union Democracy and Free Collective Bargaining Negotiation

The directors of an employees' union will be selected by means of a free and secret vote of its members.

The board of directors of a labor union will have to present biannual statements of the incomes, expenses and the administration of the union estate.

A federal Conciliation and Union Registry Center will be created, which will have the responsibility of registering all labor unions and collective bargaining agreements nationwide, among other activities such as the conciliation process in labor disputes.

In order to file a call for strike and/or to file a collective bargaining agreement for its registration, the labor union will have to obtain a "Majority Certificate," which will certify that the union represents the majority of the workers in a certain workplace.

Also, the process to register a new labor union will be simplified and the board of directors will have to be gender inclusive.

Conciliation and Union Registry Center

As provided in the amendment to article 123 of the Mexican Constitution, an independent body named Conciliation and Union Registry Center will be created and have the following main duties:

  1. Being a conciliator in federal jurisdiction conflicts between employers and employees. The conciliation process will be a pretrial mandatory stage, since a certificate of having attended this conciliation process will need to be attached to all complaints filed before a Labor Court.
  2. Register of all the collective bargaining agreements and internal work regulations related to labor unions.
  3. Set forth professional career development for its employees.
  4. Determine training and professional development plans.

In the same manner, local Conciliation and Union Registry Centers will be incorporated nationwide. Said local centers will be dependent on the local government of each state, having the main duty of assisting in conciliation process of local jurisdiction conflicts.

Labor Courts

This project set forth the guidelines for the operation of the new Labor Courts that will replace the Conciliation and Arbitration Labor Boards. The new courts will be part of the Federal or Local Judicial Branch, depending on the jurisdiction.

Labor Procedure

If approved, the Labor Procedure will be substantially modified. These will be the main changes:

  1. The Court will have a digital platform to make electronic notifications to the parties in a lawsuit.
  2. A voluntary registration system will be implemented so that the employer can register to receive information of new lawsuits filed against them.
  3. Offer of reinstatement will not revert the burden of proof to the employee, and even in these cases, the employer will have to demonstrate that the employee was terminated for cause or that the dismissal never took place.
  4. Electronic paystubs (Comprobantes Fiscal Digital por Internet or CFDI) will be valid as original documents.
  5. The initial complaint must include: a) Certificate that proves that the pretrial conciliation process was completed, b) proxy letters and/or power of attorney, and c) documental evidence.
  6. Once the complaint is admitted, the court should notify the defendant who will have 15 working days after said serving, to present its written answer to the complaint along with its documental evidence.
  7. The plaintiff will have eight working days to present arguments against the written answer to the complaint and then the defendant will have five days to file its written response.
  8. After the abovementioned period is elapsed, the Court will appoint a date for a preliminary hearing, at which time the Court will rule on the admission of the evidence and will set forth dates for the evidentiary hearings (i.e., witnesses and parties testimonies).
  9. Once both parties have presented all of their witnesses and other evidence, they will be able to present oral closing arguments. Afterward, the court should issue a final ruling within the following five working days after the final hearing.

Human Rights and Gender Perspective

  1. No discrimination and violence environment will be of public interest.
  2. The employer will have to implement a protocol to prevent gender discrimination and to give attention to violence and sexual harassment cases.

Other Important Changes

  1. If agreed by the employer and employee, the digital paystubs may replace the printed version.
  2. Employers cannot obligate an employee to be part of certain labor union or to interfere in the employee's decision of who should represent them in collective bargaining negotiation, neither to act toward controlling its employees in connection to labor unions.
  3. The federal Conciliation and Labor Registry Center will start operations no later than two years after the bill is approved.
  4. Local Labor Courts and local Conciliation and Labor Registry Centers will start operations no later than three years after the bill is approved.
  5. Federal Labor Courts will start operations no later than four years after the bill is approved.
  6. Until the new Labor Courts start operations, the local and federal Conciliation and Arbitration Labor Boards will continue working on individual and collective labor cases.

Finally, please note that this project to amend the Federal Labor Law does not include any changes to the outsourcing regime or additional penalties to the ones currently in effect.    


 

Information contained in this alert is for the general education and knowledge of our readers. It is not designed to be, and should not be used as, the sole source of information when analyzing and resolving a legal problem. Moreover, the laws of each jurisdiction are different and are constantly changing. If you have specific questions regarding a particular fact situation, we urge you to consult competent legal counsel.


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