Employers with operations in Mexico are about to experience an unprecedented shift in labor and employee relations. As Wen Dong, Director, Global Affairs for HR Policy Global, writes, after May 1, as a result of Mexico’s 2019 labor law reforms, nearly all the 500,000 collective bargaining agreements that previously existed will disappear.
Effective May 1, 2023, the 2019 labor reform law requires collective bargaining agreements to be voted on by employees and states that any agreements not legitimized through this voting process before that date will be eliminated. While proponents designed the law to outlaw so-called Protection Contracts and replace them with agreements negotiated by genuine trade unions, the law is so far not executing as planned. Recent statistics show that, failing a tsunami of ratification votes, less than 1% of existing agreements will exist after the deadline. In a country where an estimated 95% of workers were covered by union agreements in 2019, collective bargaining agreements will disappear for almost all of them overnight.
End of the beginning for labor reform in Mexico. The future for labor reform in Mexico looks like it will be played by American rules. Unions will have to recruit members, win battles for recognition and negotiate contracts successfully while employers will not be able to rely on a Protection Contract sitting in a government register to prevent organizing. Read Wen’s full blog for strategies to prepare for and address the coming changes.
Register for HRPA’s Latin America Summit in Orlando, Florida on May 11 and 12. Themeeting features a timely panel discussion on this topic Moderated by HR Policy’s Roger King, and– including Carlos Martin Del Campo, Partner at Baker McKenzie, Juan Pablo Moreno Arreola, Mexico Labor and Employee Relations Manager at Caterpillar, Carlos Quintana, Senior Labor Advisor for Mexico at U.S. Department of Labor, and Pedro Américo Furtado de Oliveira, Director for Mexico and Cuba at International Labor Organization. Additionally, we will release a Comparative Analysis of NLRA and Mexican Employment and Labor Laws at the meeting.
