On April 28, 2016, Mexican President Enrique Peña Nieto presented to the Mexican Senate a bill proposing to amend several sections of the Mexican Constitution. These proposed changes would represent a significant reform to the Federal Labor Law ("FLL").
If approved, the most important amendments would be as follows:
- The local and federal courts, instead of the labor conciliation and arbitration boards, would preside over labor litigation cases. The former are part of the government's judicial branch, whereas the latter are administrative entities.
- Conciliation proceedings would become mandatory and held prior to the commencement of any litigation filed in the labor courts. The law would also create "Conciliation Centers," a new administrative agency to be administered by the Executive Branch that would be charged with presiding over the conciliation proceedings.
- With respect to the freedom of association and the right to collective bargaining, the new rules would require employers to demonstrate that the company's operations have begun; to submit payroll documents for all employees; and to demonstrate that all unionized workers are aware of the collective bargaining agreement (CBA). The main objective of these proposed rules is to prevent the filing of CBAs without the employees' knowledge.
- The proposal would also regulate the union certification processes, requiring information on the employee headcount as material evidence in determining which union will administer the existing CBA.
These proposed amendments must now follow the thorough legislative process before the Senate and the House of Representatives. As these proposals would represent an amendment to the Mexican Constitution, the bill will require the approval of the majority of the states' legislatures to become law. During this legislative process, both the Senate and the House of Representatives may introduce new proposed amendments or modifications to the amendments introduced by President Peña Nieto.
We will continue to monitor these potential FLL reforms.
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