Mexico: The Commercial Agreement reached among the United States, Mexico and Canada includes Chapter 23 on Labour Matters and Annex 23 – A for Mexico

On October 1, 2018, the Governments of the United States, Mexico and Canada reached an agreement as part of the renegotiation of the North American Free Trade Agreement (“NAFTA”), generating a new commercial treaty among the three countries.

The new trade agreement has not been signed by the parties, neither has it been ratified by the corresponding parliaments, senates or offices. Chapter 23 of the new trade agreement specifies the labour legislations which must be fulfilled by the State Parties, Annex 23 – A of the chapter was included for Mexico, which the Mexican government must comply with in order to be considered a party to the Agreement.

Annex 23 – A contains specific commitments that the Mexican Government assumed on collective matters, also Mexico must adopt and maintain various legal provisions such as:

• The workers’ right to engage in collective bargaining or to organize, form and join the union of their choice, obviously any type of interference by the employer is forbidden.
• Independent and impartial authorities must be the ones in charge of the registration for union elections and of the resolution of labour disputes, as well as of union registration, the legislation of such Annex also establishes the need of an independent authority for conciliation and registration of collective bargaining agreements; the independent authority must have sufficient force to issue sanctions against those who breach its orders.
• Establish an effective system where the election of union leaders is carried out through the personal, free and secret vote of the union members.
• Establish that the Union Certification Process will be resolved by the Courts through the workers’ vote, and the process will not be delayed due to unnecessary objections or judicial appeals so procedural limits ought to be established.
• The current Mexican labour legislation must be reformed so:
  • The Independent authority shall verify that the collective bargaining agreements meet legal standards.
  • For the registration of a new collective bargaining agreement, the majority support of workers shall be verified, expressed through the exercise of the personal, free and secret vote.
• The legislation should establish that all the existing collective bargaining agreements should be revised, at least once within four years following the entry into force of the legislation.
• The legislation does not imply the termination of the existing collective bargaining agreement, as long as the majority of the workers support it.
• The revised agreement must be filed with the independent authority, which must verify either through documentary evidence (physical or electronic), direct consultations with workers or inspections at the workplace, that:
  • A copy of the revised agreement was known by workers covered by the agreement prior to the vote, and
  • The majority of the workers expressed their consent with the revision agreement through a personal, free and secret vote.
• Establish in the legislation that the collective bargaining agreement negotiated by a union, as well as the governing documents of the union must be available to all workers covered by the collective bargaining agreement, in terms of the General Law of Transparency and Access to Public Information.
• The legislations shall also establish a website that allows access to all current collective bargaining agreements, which must be operated by the independent authority in charge of the registration of such agreements.

It is important to note that Canada and the United States expect that the Mexican government adopts the necessary legislation before January 1, 2019, on the understanding that the entry into force of the new Trade Agreement ought to be delayed if Mexico does not comply with the obligation mentioned before.

As established in the Annex, the change in the Mexican legislation will certainly imply that employers make a total change in their labour strategies, which will have to be carried out quickly, but orderly, since those collective bargaining agreements already filed, at the time of their revision, must comply with the aforementioned obligation (approved by the majority of the workers, through personal, free and secret vote).

With the international pressure that Mexico has regarding the modification of its domestic law, imperative changes must be made and companies should be prepared to face those changes taking into account the number of workers, industry and region in which the workplace is located.