Death foretold of 492,500 collective bargaining agreements in Mexico

Death foretold of 492,500 collective bargaining agreements in Mexico

There are an estimated five hundred thousand collective bargaining agreements signed throughout the country. However, only fifteen percent of these contracts will be legitimized By May 1, 2023. As analyzed in our previous newsletters, according to the Eleventh Transitory Article of the Labor Law Reform of May 1, 2019 in matters of Labor Justice, Union Freedom and Collective Bargaining, the term for unions to legitimize their collective bargaining agreements expires on April 30, 2023. After that date, all not legitimized collective bargaining agreements will be without effect and terminate automatically.

We are in a transit stage and currently the term to legitimize collective bargaining agreements is running fast. The Secretary of Labor, Luisa María Alcalde Lujan, stated that there are an estimated five hundred thousand collective bargaining agreements signed throughout the country.  However, she estimates that only fifteen percent of these contracts will be legitimized -7,500-, that is, she predicts that eighty-five percent will be terminated, that is 492,500. And the Secretary´s predictions are very optimistic.

And the term expires in approximately one year!

It is impossible to fulfill the deadline for legitimization. There are not enough officials, nor the necessary resources, much less enough time to legitimize more than half a million collective bargaining agreements in one year, nor has there been enough awareness to create the will required to do so.

The automatic termination of non-legitimized collective bargaining agreements will be a problem that will affect workers, companies, unions and the government in Mexico.

The current reality is that, according to the Federal Center for Conciliation and Labor Records, only around 3,300 collective bargaining agreements have been legitimized. This is far from the five hundred thousand that exist. It will be interesting to see how many more contracts will be legitimized in the remaining year. What is certain is that May 1, 2023, is the date announced for the death of thousands of collective bargaining agreements, as well as union organizations. How many will be left alive, remains a big question.

So, what should happen after the deadline? The Mexican federal government must negotiate an extension to the deadline established for the legitimization of collective bargaining agreements in Mexico, in the name of Mexican unions, companies and workers, and it should appeal to US counterparts and US unions that this will safeguard the stability of labor and maintain productivity of US investments in Mexico.

In 2019, when the law was reformed, no one expected that a COVID-19 pandemic would put to a halt public and private life for two years. Now, that the economy is returning to normal, as possible, awareness for the importance of legitimizing collective bargaining agreements must be raised.

What is the process to legitimize a collective bargaining agreement?

To proceed with the legitimization it is necessary to summon the worker, who must be provided with a copy and submit it to a personal, free, secret and direct vote in the presence of a notary public -notary or labor inspector-, who will attest to the result. If the workers approve its contents, the Federal Center for Labor Conciliation and Registration will grant the corresponding Certificate of Legitimacy, and if the vote is adverse, it will be terminated and filed, but the same working conditions will continue to apply as long as they are not inferior to the law.

The obligation to legitimize the collective bargaining agreements is also established in chapter twenty-three of the United States-Mexico-Canada Agreement (USMCA) in its annex 23-A. According to that treaty and under the terms of its annex 23, freedom of hiring and association, the elimination of all forms of forced labor and discrimination, abolition of child labor, regulation of minimum wages and working hours, as well as occupational safety and health, are of strict compliance.  This will be monitored by observers appointed by the United States and Canada, and non-compliance can be reported, and the Rapid Response Labor Mechanism can be activated.

The spirit of this measure is to put an end to so called «protection agreements», meaning those signed by companies and unions without the knowledge of the workers. They are paper pacts condemned to remain in a file cabinet without ever being reviewed, without any advantage for the worker and with the sole objective to protect the employer against so called “red” or conflictive unions.

The goal of this Annex 23 is to improve the working conditions of Mexican workers; a measure that is required as a condition for the USMCA to be in force. Certainly, in the absence of better wages and working conditions, Mexico becomes an unfair competition for the low cost of labor, and this is understandable since there is no real negotiation in collective bargaining contracts and no real union representation.

The purpose of this exercise of union democracy is for the workers to ratify by means of a vote the content of the collective bargaining agreements that their unions have filed with the Conciliation and Arbitration Boards, both local and federal.

The provisions in this matter determine that, if the majority of the workers vote in favor of ratifying the collective bargaining agreement, the competent authority, the Federal Center for Labor Conciliation and Registration, will issue a certificate of majority that will serve as the basis for the unions to prove the legitimacy of the collective bargaining agreements they have in their favor.

So far, the legal background, but questions arise from the ambiguity in the regulatory framework governing the legitimacy of collective bargaining agreements.

First, the vote must be personal, free, direct and secret. This means that the principle of union representativeness, the essence of which not only has a constitutional connotation but also an attribute and a function of efficiency, will no longer be taken into account.

It is clear that there is an overregulation of union freedom. The vote should always have been free. And nothing more. However, it is known by all that the labor reform in union matters was one of the many concessions made by the past administration to the United States to achieve the signing of the USMCA.

Chapter twenty-three of the USMCA in its annex 23-A was drafted by American unionists and laborists and reviewed by Mexican representatives, who may not have seen all implications about Mexican reality.

Another complexity in this matter lies in the majority record. The rules establish that the union will be issued a majority vote if the majority of the workers who come to vote on whether or not to ratify the content of their collective bargaining agreement vote in favor of it. However, it is not defined in what sense to interpret what majority the law refers to: majority of union members, majority of the list of workers (tabulador), majority of the total number of workers, majority of those who come to vote?

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