1 Legal framework

1.1 Are there statutory sources of labour and employment law?

The main sources of labour and employment law governing labour relations in Mexico are the Federal Labour Law and the Federal Law for Civil Servants, both of which have national application.

The Federal Labour Law regulates individual and collective labour relations and is contemplated in Section A, Article 123 of the Mexican Constitution.

1.2 Is there a contractual system that operates in parallel, or in addition to, the statutory sources?

No – since Mexico is a federalised state, the Federal Labour Law is the only legal instrument that governs labour relations throughout Mexico.

1.3 Are employment contracts commonly used at all levels? If so, what types of contracts are used and how are they created? Must they be in writing must they include specific information? Are implied clauses allowed?

Working conditions must be established in writing by individual employment contracts where there is no applicable collective bargaining agreement. The individual employment contract must contain the following:

  • the employee's full name, nationality, age, gender, marital status, unique national population registry code, federal taxpayer registration and address, and the employer's address;
  • the duration of the employment relationship and whether it is subject to a probationary period;
  • the service or services to be rendered, described as precisely as possible;
  • the place where the services are to be rendered;
  • the duration of the working day;
  • the form of payment and the salary;
  • the day and place of payment of salary;
  • an indication that the employee will be trained under the terms of the plans and programmes established by the employer;
  • other working conditions such as rest days, holidays and any other conditions agreed upon by the employee and the employer; and
  • the designation of beneficiaries of the employee in case of death or disappearance in case of a criminal act.

Employment relationships may be for a specific job or for a specific period of time if:

  • the temporary nature of the work is justified; or
  • the purpose of the role is to temporarily replace another employee, for a specific period of time.

If applicable, the employment relationship may be subject to a trial period or initial training.

If the contract is for an indefinite period or for a fixed term longer than 180 days, the contract may be subject to a probation period, which will initially be 30 days and may be extended to 180 days in the case of positions of direction, management, administration or specialised technical or professional work.

The Labour Law provides that the lack of a written contract does not deprive the employee of the rights enshrined by the law, since an employment relationship is presumed when the three elements that constitute such a relationship are present – that is:

  • subordination;
  • rendering of a personal service; and
  • payment of a salary.

2 Employment rights and representations

2.1 What, if any, are the rights to parental leave, at either a national or local level?

Working mothers benefit from a six-week break before childbirth and a six-week break after childbirth. At the express request of the employee and with the prior authorisation of an authorised physician, taking into account the opinion of the employer and the nature of the work performed, four of the six weeks prior to childbirth may be taken after childbirth. If the child is born with any type of disability or requires hospital care, the leave may be extended for up to eight weeks after the birth.

In case of adoption, mothers will have paid leave of six weeks after the adoption date.

Male employees will have five paid days off for the birth or adoption of a child.

2.2 How long does it last and what benefits are given during this time?

During maternity and/or paternity leave, employees will continue to receive their salary and all corresponding benefits in accordance with the individual employment contract.

2.3 Are trade unions recognised and what rights do they have?

Employees and employers have the right:

  • to form the organisations they deem convenient; and
  • to join such organisations on the sole condition of observing their bylaws.

Trade unions have the right to:

  • draw up their statutes and rules;
  • freely elect their representatives;
  • organise their administration and activities; and
  • formulate their action plans.

2.4 How are data protection rules applied in the workforce and how does this affect employees' privacy rights?

Personal data is protected by the Federal Law on the Protection of Personal Data in Possession of Individuals. The transfer of personal data is authorised only in terms of the provisions of that law.

2.5 Are contingent worker arrangements specifically regulated?

For an employment relationship to be for a specific period, or for temporary or specific work, its temporary nature must be justified in the individual employment contract. Employees are entitled to the corresponding benefits of the role in proportion to the number of days for which they render their services.

3 Employment benefits

3.1 Is there a national minimum wage that must be adhered to?

The National Minimum Wage Commission meets annually to establish the minimum wages for each calendar year. One minimum wage is established for the northern border region of Mexico and another for the rest of the country; there is also a list of professional minimum wages for specific professions.

3.2 Is there an entitlement to payment for overtime?

The law provides that the maximum duration of the workday is:

  • eight hours for a day shift (between 6:00 am and 8:00 pm);
  • seven hours for a night shift (between 8:00 p.m. and 6:00 am); and
  • 7.5 hours for a mixed shift (which includes periods of the day and night shift without exceeding 3.5 hours of the night shift).

The working day may be extended by up to three hours three times a week; these hours will be paid at double the hourly rate according to the employee's salary. If the overtime exceeds nine hours per week, the employer must pay the excess time at triple the value of the hour at the employee's rate of pay.

3.3 Is there an entitlement to annual leave? If so, what is the minimum that employees are entitled to receive?

Employees are entitled to a minimum of 12 days' holiday for the first year of service, increasing by two days of holiday for each subsequent year up to a maximum of 20 days. After the sixth year, the holiday allowance will increase by two days for every five years of service.

In addition, employees will be entitled to a holiday bonus that cannot be less than 25% of the salary corresponding to the holiday period.

3.4 Is there a requirement to provide sick leave? If so, what is the minimum that employees are entitled to receive?

If an employee's disability has resulted from an occupational hazard, the employee is entitled to the payment of up to 100% of his or her salary by the Mexican Institute of Social Security. The employee must be evaluated by a doctor of the institute for this purpose.

If an employee's disability has not resulted from an occupational hazard, the employee must also attend the Mexican Social Security Institute for an evaluation so that the institute can specify how much time the employee should be given off work due to the illness. In addition, the employee will be entitled to have the institute cover 60% of his or her salary as of the fourth day of disability.

3.5 Is there a statutory retirement age? If so, what is it?

Yes, the retirement age in Mexico is:

  • 60 for advanced retirement; and
  • 65 for old age.

The difference between the two concepts lies in the age at which the retirement requirements established in the Social Security Law are met.

4 Discrimination and harassment

4.1 What actions are classified as unlawfully discriminatory?

The law prohibits the establishment of working conditions or conduct in the workplace that would result in discrimination among workers based on:

  • ethnic or national origin;
  • gender;
  • age;
  • disability;
  • social status;
  • health conditions;
  • religion;
  • immigration status;
  • opinions;
  • sexual preferences;
  • marital status; or
  • any other condition that violates human dignity.

4.2 Are there specified groups or classifications entitled to protection?

The Labour Law establishes specific provisions for categories of workers who qualify for special protection or guidelines, as follows:

  • employees in positions of trust;
  • ship employees;
  • aeronautical crew employees;
  • railroad employees;
  • motor transportation employees;
  • field employees;
  • professional athletes;
  • actors and musicians;
  • teleworkers;
  • household workers (domestic workers);
  • mine employees;
  • employees in hotels, restaurants, bars and similar establishments;
  • family industry employees;
  • resident doctors who are training in a specialty; and
  • employees in universities and autonomous institutions of higher education.

4.3 What protections are employed against discrimination in the workforce?

Employers must implement protocols in the workplace:

  • to prevent discrimination based on gender;
  • to deal with cases of violence and harassment; and
  • to eradicate forced and child labour.

4.4 How is a discrimination claim processed?

The competent authority to receive complaints of discrimination is the Federal Employees' Defence Office (PROFEDET). Anyone who is the victim of a discriminatory act in any workplace can file a complaint with PROFEDET, submitting sufficient evidence to allow the authority to determine whether it is grounded. The evidence may consist of photographs, documents, videos, voice recordings, text messages or witness testimony.

4.5 What remedies are available?

Once a complaint has been filed, PROFEDET will examine the evidence and will specify the corresponding sanction, depending on the case. Where the employer has discriminated against the employee, a fine may be imposed under Article 994, Section VI of the Labour Law. The amount of the fine varies and will be determined by PROFEDET.

4.6 What protections and remedies are available against harassment, bullying and retaliation/victimisation?

Under the protocols discussed in question 4.3, each work centre must establish its own mechanisms for dealing with cases of harassment, bullying or violence.

5 Dismissals and terminations

5.1 Must a valid reason be given to lawfully terminate an employment contract?

Yes, there are several grounds for the justifiable termination of an employment relationship. The Labour Law sets out:

  • a list of grounds for termination without liability for the employee; and
  • a list of grounds for termination without liability for the employer.

If the employer terminates an employment relationship without just cause, a severance payment must be made.

5.2 Is a minimum notice period required?

If the employment relationship is terminated due to the fault of the employee without liability for the employer, the employer must give notice to the employee personally or through the competent labour court within five business days of learning of the fault.

In cases of voluntary resignation by the employee, the law does not establish a minimum period of notice to be given to the employer.

5.3 What rights do employees have when arguing unfair dismissal?

If the employee is the victim of unjustified dismissal, he or she may, prior to the judicial stage, request a conciliatory process before the corresponding conciliation centre, in which the employee and the employer can reach agreement on the dispute. The employee has two months from the day following that on which his or her employment is terminated to request conciliation. The conciliatory stage may not last more than 45 calendar days. If no agreement is reached, the conciliation centre will issue a certificate to confirm that this mandatory pre-judicial stage has been exhausted and the matter will proceed to the judicial stage before the corresponding labour court. If the parties reach agreement during the pre-judicial stage, an agreement will be signed which will be binding on the parties.

5.4 What rights, if any, are there to statutory severance pay?

If the existence of an unjustified dismissal is proven, the indemnity will depend on the duration of the individual employment contract.

If the employment relationship was for a fixed term of less than one year, the indemnity will consist of an amount equal to the salary for half the period of services rendered. If the employment relationship was for a fixed term of more than one year, the indemnity will consist of an amount equal to the salary for six months for the first year and 20 days for each subsequent year of services rendered.

If the employment relationship was for an indefinite period, the indemnity will consist of 20 days' salary for each year of services rendered and three months of the 'integrated salary' of the employee. The employee's 'integrated salary' comprises his or her base salary, plus additional payments made in cash for:

  • daily instalments;
  • gratuities;
  • bonuses;
  • room and board;
  • commissions;
  • benefits in kind; and
  • any other amount or benefit paid to the employee for his or her work.

In the event of a conviction against the employer, the employee will also be entitled to the payment of 'fallen wages', meaning an amount for the duration of the lawsuit. This amount consists of:

  • the employee's salary for the first year of the trial; and
  • if the trial lasts for more than one year, monthly interest of 2% on 15 months of salary.

6 Employment tribunals

6.1 How are employment-related complaints dealt with?

As mentioned in question 5.2, there is a pre-judicial conciliatory stage which must be exhausted in all cases, with the following exceptions:

  • cases involving discrimination in employment and occupation due to pregnancy;
  • cases involving the designation of beneficiaries in the event of death;
  • cases relating to social security benefits derived from occupational hazards, maternity, illness, disability, childcare or accidents; and
  • matters relating to:
    • freedom of association and union freedom;
    • labour trafficking;
    • forced labour;
    • child labour;
    • collective bargaining disputes; and
    • challenges to union bylaws.

Once the pre-judicial stage has been exhausted, the matter will proceed to the judicial stage, which begins with the filing of an initial writ of claim.

6.2 What are the procedures and timeframes for employment-related tribunals actions?

The statute of limitations for labour actions is one year from the day following that on which the obligation becomes due, with the following exceptions:

  • The statute of limitations is one month where the case involves:
    • the actions of employers to dismiss employees, to discipline them for fault or to make deductions from their salaries; or
    • the actions of employees to terminate their employment for causes attributable to the employer.
  • The statute of limitations is two years where the case involves:
    • the actions of employees to claim indemnity for labour risk;
    • the actions of beneficiaries in case of death due to occupational risk; or
    • actions to request the enforcement of judgments or agreements of the court.

7 Trends and predictions

7.1 How would you describe the current employment landscape and prevailing trends in your jurisdiction? Are any new developments anticipated in the next 12 months, including any proposed legislative reforms?

Various reforms have been introduced in recent years in relation to:

  • subcontracting;
  • labour justice;
  • democracy and freedom of association; and
  • holidays.

These reforms made important revisions to the labour regime and have given rise to new criteria and changes, mainly in relation to the administration of labour justice.

A new justice system is also bedding in, as the dedicated labour courts recently commenced operations. In the coming months and years, the courts may introduce new interpretation criteria.

8 Tips and traps

8.1 What are your top tips for navigating the employment regime and what potential sticking points would you highlight?

The main recommendation is that employers ensure full labour compliance in work centres, to avoid labour contingencies derived from bad practices or inadequate internal controls. It is also important to maintain friendly union relations, as the unions have a great deal of influence on the labour force.

One potential sticking point to note is that the contracting of services by third parties could potentially fall within the scope of prohibited subcontracting. Under Mexican law, it is prohibited to subcontract services from third parties that fall within the corporate purpose or the predominant economic activity of the company. Therefore, employers should pay attention to contracting schemes and avoid risks by directly hiring employees to undertake all activities that fall within the scope of their corporate purpose, and subcontract only those services that are not part of the corporate purpose.

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.