Labour reform of 2nd of May 2019
On the 2nd of May this year there has been a reform of Mexican labour law. This mainly consists of an official redistribution of labour law arbitration matters.
Besides that, minors between the ages of 16 and 18 can now apply for a work permit from the Court of Justice. Minors under the age of 16 can obtain a work permit from their parents, guardian, union, labour inspector, political authority or court. This also applies to posted Mexican employees abroad.
Division of decision-making by the authorities
The innovations of the reform relate mainly to the division of authorities with regard to labour law decision-making. Here the Labour Court and the Conciliation & Registration Authorities perform different functions, but have the same objective: to ratify judicial or extrajudicial labour law settlements and severance payments.
Responsibility of the arbitration authorities
The authorities of arbitration and registration operate on a federal level with the following responsibilities:
Arbitration of labour law matters such as agreements, amendments to individual agreements, tariff agreements on a federal level. This preliminary stage is obligatory!
A further institution will in the future exercise so-called registration departments, whose main function is the registration of trade unions, tariff agreements, individual employment relationships and internal agreements. They are also responsible for the publication of tariff agreements.
In addition, emails will be recognized as an official means of communication and for submitting documents.
Labour courts
In case a matter cannot be clarified before the arbitration authority; a notification will be issued, which makes it possible to take the case to the labor court.
An ordinary labour law case involves two hearings, a pre-trial hearing and a court proceeding. According to the new reform, it is necessary to provide evidence from the beginning.
The Labour Court has jurisdiction over individual and collective conflicts between employees and the statutory health insurance scheme. The employee will also be offered assistance with reviews or amendments to employment or collective agreements. Changes of working conditions by trade unions are also handled by the labour court. It is responsible for implementing decisions of various commissions in order to fulfil social and economic functions and interests. In the event of a company´s commercial insolvency, the Labour Court may confiscate or auction the company assets to pay the liabilities to the employees.
Other key elements of the reform
– Obligation to register trade unions at the Federal Center for Labor Conciliation and Registration Offices
The employee has a payment claim against other creditors of the employer in case there is an execution of the judgment in favor of the employee.
– Notice of termination must be given in person or in court; in case of default the result would be an unjustified dismissal.
– a National Committee for Agreement and Productivity acts as a supporting body of the government. The Ministry of Labour and Social Affairs and the State Secretariat for Economic Affairs request employers, trade unions and institutions to join it. This serves to review and evaluate the functioning of the authorities of arbitration and registration – In the event of excessive workloads or low salaries for the work carried out, employees can bring an action directly before the court or file a complaint. The employees could appear in person before the labor court or file a complaint in case if there exist an excessive workload or the salary is too low for work, which is carried out.
– Employer’s obligation to agree with the employee(s) to a protocol to prevent discrimination, violence and harassment.
– More union freedom and flexibility, enshrined in the union’s statutes.
– Receipts of the tax authority (CFDIs) can now replace traditional salary statements and may be used as process evidence.
– the use of email as an official medium to receive notifications during the procedures as well as electronic submission of certain documents
Transitional arrangements
In theory, the aforementioned regulations are deemed to have entered into force on the 2nd of May 2019. However, for the transition, it was stipulated that the Organisational Act will take effect from the 2nd of November 2019 for arbitration and registration authorities. from the 2nd of May 2021, the functions of the governmental institutions will apply.
The functions of the local and state arbitration authorities and local courts will become effective from the 2nd of May 2022. At the federal level, the functions of the state arbitration authorities and federal courts will become legally effective in the following year as of 2nd of May 2023.
– Once during the 4-year period of validity of this ordinance, the collective agreements must be reviewed and legitimated.
The previous arbitration committees will remain in place until the functions of the new institution of the arbitration authorities come into effect and will afterwards be replaced.
Do you have any further questions concerning the labour reform of 2nd of May? Don´t hesitate to contact our legal expert! Learn more about our mexico legal service offer.
Contact: Ms Kerstin Kinder, kinder@wmp.mx
