Mexico: Constitutional Reform On Labor Justice, Freedom Of Association And Collective Bargaining

The Decree amending Articles 107 and 123 of the Political Constitution of the United Mexican States as regards to labor justice, freedom of association and collective bargaining ("Decree") was published in the Federal Official Gazette ("DOF" for its acronym in Spanish) on February 24, 2017. The referred to amendments are explained below:

1. Article 107, section V, subparagraph d), relating to amparo claims against final resolutions or judgments ending a labor conflict, was amended to establish that such resolutions or judgments will now be issued by the new local or federal labor courts, instead of the awards rendered by the Local or Federal Conciliation and Arbitration Boards, which will disappear.

2. Article 123, Part A, section XVIII, was amended to provide that when the objective of a strike is to obtain the execution of a collective bargaining agreement, the union shall demonstrate that it actually represents the workers, seeking with this measure to eradicate strike notices made by "phantom" unions and avoid extortion practices against employers.

3. Article 123 Part A, section XIX was amended to precise that work stoppages require the prior approval of the labor courts, in lieu of the Conciliation and Arbitration Boards that will disappear.

4. Article 123 Part A, section XX was amended to provide that the resolution of conflicts between workers and employers will now be in charge of the federal and state labor courts pertaining to the Judiciary Branch, whose members will be appointed by the Federal Judiciary Council in the case of federal jurisdiction or in accordance with the Constitutions and Organic Laws of the States in the case of local jurisdiction, who must have proficiency and experience in labor matters.

Through this amendment the Conciliation and Arbitration Boards formed by representatives of workers, employers and the Government will disappear.

Another important change introduced in this section XX corresponds to the duty to attend a mandatory conciliatory hearing before the beginning of a trial before the labor courts. Subsequent conciliatory hearings will only be conducted by agreement between the parties to the dispute.

The conciliatory function within local jurisdiction will be assigned to Conciliation Centers to be established in the different states, which will have legal capacity and their own endowment, as well as technical, operative, budgetary, decision and management autonomy. Its integration and operation will be determined by local laws.

In the federal jurisdiction, the conciliatory function will be carried out by a decentralized government agency with legal capacity and its own assets, as well as technical, operative, budgetary, decision and management autonomy, whose integration and operation will be determined in the law to be enacted for such effects. It should be noted that this federal agency will also be responsible for the registration of all collective bargaining agreements and trade union organizations, as well as all related administrative processes.

The head of this federal agency must be voted by two-thirds of the members of the Senate from among a slate of three candidates proposed by the Mexican President, and will have a six-years tenure, and the possibility of being re-elected once.

The designation as head of the referred to federal agency must be made to a person who has proficiency and expertise in labor matters, has not held a position in any political party or been a candidate to hold a position of public election in the three years prior to his appointment, enjoys good reputation and has not been convicted of a felony.

5. Section XXII Bis is added to Article 123 Part A, with the aim of strengthening the right to collectively bargain and warranting the principles of representativeness of trade union organizations and certainty in the execution, registration and filing of collective bargaining agreements.

Likewise, it is expressly established that for the resolution of conflicts between unions, the request to execute a collective bargaining agreement and the election of trade union leaders, the workers' vote shall be personal, free and secret.

This measure aims to eliminate the use of "collective bargaining agreements for protection purposes" and to promote that workers participate actively and openly in the bargaining process.

6. Subparagraph (c) is added to Section XXXI of Article 123, Part A, concerning the exclusive jurisdiction of the federal labor authorities in relation to the registration of collective bargaining agreements and trade union organizations, as well as all administrative processes in connection therewith, functions which are the responsibility of the decentralized federal agency mentioned above.

Although the aforementioned amendments became effective the day after their publication in the DOF, legislative adjustments at both the federal and state levels must be made within a one year term from the date in which the Decree became effective in order to regulate and implement the changes herein described. Thus, significant changes to the Federal Labor Law currently in force and the enactment of secondary legislation on labor procedural matters are still expected.

Similarly, within the aforementioned one year period, the Mexican President must propose to the Senate the list of three candidates to perform as head of the decentralized federal agency in charge of the registration of collective bargaining agreements and trade union organizations.

As long as the new Labor Courts, Conciliation Centers and decentralized federal agency are not established and operating, the Conciliation and Arbitration Boards and, where appropriate, the Ministry of Labor and Social Welfare, will continue to deal with labor disputes and the registration of collective bargaining agreements and trade union organizations.

Matters that are pending before the Conciliation and Arbitration Boards at the time the new labor courts begin operating shall be resolved in accordance with the provisions applicable at the time of their commencement. The Conciliation and Arbitration Boards must transfer the proceedings and files they have under their protection to the new labor courts or to the decentralized federal agency for what regards to the registration of collective bargaining agreements and trade unions.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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