Mexico: Key Bill Of Amendments To The Mexican Federal Labor Law And Its Potential Impacts On Employers In Mexico

On September 1, 2012, President of Mexico Felipe Calderón submitted to the Mexico House of Representatives a bill of amendments to the Federal Labor Law (FLL), which was thereafter approved almost in its entirety by the House of Representatives and the Senate. This proposed bill of amendments is expected to become effective within the coming days and is highly significant for the legal labor framework of Mexico. If approved, it would have a major impact on all employers in Mexico, including foreign companies that have operations in Mexico.

An amendment to the FLL currently in effect became an urgent matter given that such law was enacted in 1970 and had its last material amendment merely on procedural matters in 1980. Meanwhile, Mexico and the international scenario have changed substantially, leaving certain relevant provisions of the FLL impractical and burdensome, and some even obsolete. The international and Mexican business community have insistently requested throughout the years to the Mexican government an amendment to the FLL, which this administration is finally pursuing.

Among the topics most relevant to employers and employees in the bill are the following:

Hiring and Individual Labor Relations

  • Inclusion of new hiring patterns, such as:
    • Seasonal work, which would allow certainty in the hiring process of employees who perform seasonal work activities, such as sales people and agricultural workers.
    • Trial periods and training periods for new employees for up to six months. The current FLL does not provide for this type of training and trial work.
    • Telecommuting benefits. The current FLL does not contemplate telecommuting.
  • Including workplace and sexual harassment against any person as a cause for justified termination of employment. These conducts are not contemplated in the current FLL as a cause for justified termination of employment.
  • Strengthening of the rights of working mothers, providing flexibility to elect maternity leave periods (before/after birth), allowing shorter shifts for mothers breastfeeding their children, among others.
  • Prohibition of all types of discrimination in the workplace in accordance with international standards.
  • Sanctioning underage labor (below 14 years) as a crime.
  • Including the right to paternity leave (for three days), for childbirth or adoption, which is not contemplated in the current FLL.
  • Requiring companies with more than 50 employees to adapt their facilities to allow access to handicapped employees, which is not contemplated in the current FLL.
  • Improving working conditions for household, agricultural and mining workers, providing for more adequate labor shifts and ensuring they have the same benefits granted by the FLL to all other types of employees.
  • Providing clear rules for employers hiring employees to work abroad.
  • Encouraging the training of employees by providing clear rules on the training obligations, which would require employers' compliance.

Work Under the Subcontracting Regime

Over the years, certain groups have used work under the subcontracting regime (outsourcing of personnel) as a mechanism to avoid full compliance of labor obligations toward employees. The bill of amendments contains certain restrictions for the employers of the personnel, as well as for those companies that benefit from the services of such personnel in order to avoid a wrongful practice of this subcontracting regime.

In the event the outsourcing of personnel is used as a mechanism to avoid employer obligations, the contracting party (the true beneficiary of the services rendered by the contractor's personnel) would be considered a true employer for all legal purposes under the FLL, making it responsible for all labor obligations, including Social Security obligations.

Additionally, the outsourcing of personnel will not be allowed when employees are transferred from one company to another with the purpose of reducing the labor rights of the employees. Penalties are imposed for breach of these provisions.

Procedures at the Labor Courts

The revised provisions under the bill:

  • Contain rules making the delivery of the notice of termination of the labor relationship in accordance with the FLL an easier procedure for the employer.
  • Limit to one year the payment of accrued salaries in trial procedures for unjustified termination that exceed this term. Currently, in trials initiated for unjustified termination, a favorable judgment to the employee may contain accrued salaries from the date the employee was terminated without cause, as of the date of payment of the award, without any limitation.
  • Include expressly the possibility to submit evidence in the trial procedures using the different available information and communication technologies. This is not currently provided in the FLL, making it challenging for defendants to prove their case.
  • Set forth the professionalization and ongoing training for civil servants of the Federal and Local Labor Courts, whereas this is not provided in the current FLL.

Labor Union Related Topics

Certain union-related topics that were originally included in the bill submitted by President Calderón, such as limitations to the strike proceedings, the delivery of the financial information of the unions to their members and the classification of the information related to the registration of the collective bargaining contracts as public information, are still under discussion. Uncertainty remains on whether these proposed amendments will be approved.

The Mexican government has indicated that the bill being submitted has two main goals: (1) to promote the creation of new and better-paying jobs by encouraging the productivity of companies; and (2) to develop labor relationships under regulated conditions (not street or informal trade), fostering the means to enforce the labor rights provided by the FLL.

This long-anticipated amendment to the FLL is likely to provide more legal certainty conditions for those companies investing in or planning to invest in Mexico and would also promote a more expeditious, modern and efficient administration of justice by the Labor Courts. It could eventually contribute to the improvement of conditions for creating a more internationally competitive productive market.

If approved, the new hiring patterns and the revisions to the existing procedural provisions proposed in the bill may contribute toward preventing abuse by those employees taking undue advantage of the current employee-oriented provisions of the FLL.

Should the proposed amendments be approved, all employers may want to review and update their current hiring programs, policies and documents in light of the new provisions in order to comply with the requirements and benefit from them.

About Duane Morris

Duane Morris will continue to monitor and report on any new developments arising from the proceedings for the approval of this bill, as well as on the final outcome of those proceedings and the implications of the new provisions of the FLL.

About Duane Morris and Miranda & Estavillo

International law firm Duane Morris LLP and Mexico City law firm Miranda & Estavillo, S.C. have entered into an agreement creating an alliance that formalizes and strengthens a longtime referral and networking relationship between the two firms. The firms have provided clients with legal counsel on U.S. and Mexican legal issues, particularly in the area of international corporate transactions. The firms will now offer clients expanded geographic reach and practice strength in cross-border matters.

If you would like more information about this Alert, please contact any of the members of the Mexico Business Group, any of the members of the Employment, Labor, Benefits and Immigration Practice Group or the attorney in the firm with whom you are regularly in contact.

This article is for general information and does not include full legal analysis of the matters presented. It should not be construed or relied upon as legal advice or legal opinion on any specific facts or circumstances. The description of the results of any specific case or transaction contained herein does not mean or suggest that similar results can or could be obtained in any other matter. Each legal matter should be considered to be unique and subject to varying results. The invitation to contact the authors or attorneys in our firm is not a solicitation to provide professional services and should not be construed as a statement as to any availability to perform legal services in any jurisdiction in which such attorney is not permitted to practice.

Duane Morris LLP, a full-service law firm with more than 700 attorneys in 24 offices in the United States and internationally, offers innovative solutions to the legal and business challenges presented by today's evolving global markets. Duane Morris LLP, a full-service law firm with more than 700 attorneys in 24 offices in the United States and internationally, offers innovative solutions to the legal and business challenges presented by today's evolving global markets. The Duane Morris Institute provides training workshops for HR professionals, in-house counsel, benefits administrators and senior managers.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
 
Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
 
Email Address
Company Name
Password
Confirm Password
Position
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Compliance
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement

Mondaq.com (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of www.mondaq.com

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about Mondaq.com’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.

Disclaimer

Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.

Registration

Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to unsubscribe@mondaq.com with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.

Cookies

A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.

Links

This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.

Mail-A-Friend

If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.

Security

This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to webmaster@mondaq.com.

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to EditorialAdvisor@mondaq.com.

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at enquiries@mondaq.com.

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at problems@mondaq.com and we will use commercially reasonable efforts to determine and correct the problem promptly.