Workers at two automotive plants in Mexico voted overwhelmingly in favor of independent union representation, paving the way for the first collective bargaining agreement (CBA) negotiations under Mexico’s reformed federal labor law.
Both companies ousted the Confederation of Mexican Workers, Mexico’s old-guard labor organization, earlier in 2022. Employees at auto parts maker Tridonex in Matamoros, Tamaulipas, cast their ballots for the Independent National Union of Industrial and Service Workers, while workers at a General Motors Co. truck plant in Silao, Guanajuato, voted in favor of representation by the Independent National Autoworkers Union.
Several legal experts say the votes were important tests of the United-States-Mexico-Canada Agreement (USMCA)—which replaced the North American Free Trade Agreement—and the Mexican government’s commitment to labor reform.
“These successful votes are just the beginning of what promises to be greater union organizing efforts, labor relations challenges between employers and unions in Mexico, and increased oversight by the U.S. government and at times the involvement of U.S. labor organizations,” said James Stone, an attorney with Jackson Lewis in Cleveland.
As part of Mexico’s new labor law under the USMCA, workers in Mexico are afforded greater protections and rights, including union elections secret ballot, transparent negotiation and CBA approval, an independent labor adjustment board, and the democratic election of union officers, Stone added.
Mexico’s new law also requires the establishment of state and federal courts along with agencies to enforce laws through judicial decisions, noted Oscar De la Vega, an attorney with De la Vega & Martinez Rojas S.C. in Mexico City.
“Mexican labor law is changing rapidly, and this will be especially impactful to larger and midsized manufacturing companies,” Stone said.
Role of Trade Unions in Mexico
Before labor reform in Mexico, companies could recognize unions and sign a contract—or a protection agreement—without any input or approval from workers, Stone noted. Employers, not employees, paid union dues.
“As a result, most unions in Mexico were not democratic, nor did they particularly represent the interests of the employees,” Stone said. “The agreements mostly accommodated the needs of the companies.”
Mexico’s new labor law requires democratic unions, Stone stated. Under the new law, a union in Mexico may be recognized as the exclusive bargaining representative if at least 30 percent of employees support it.
But ratification of a CBA—a legal contract between an employer and a union representing employees—requires support from a majority of all represented workers, Stone added.
Workers in Mexico now also have the right to decide whether they want to join a union or not, De la Vega said.
Mexico’s Changing Employment Landscape
Currently, it is not business as usual for U.S. and Canadian companies operating in Mexico, Stone explained. Manufacturers will be scrutinized in the early years of enforcement under the new labor law.
Under Mexican law, the use of replacement workers is limited, Stone continued. American companies organized by independent unions could face difficulties.
“Employers dealing with operations in Mexico should be aware that labor relations are highly regulated in the country,” De la Vega said. “Mexican employees generally have greater rights than their American counterparts.”
U.S. companies operating in Mexico should address the following questions when subsidiaries explore options to join a union, Stone said:
- What are our pay rates compared with other companies in the area?
- What benefits do we provide our employees?
- Do our employees consider themselves well-treated?
- Do supervisors maintain strong communication with their employees?
North American companies also need to accommodate employees who choose to be union-free, because this is a new alternative, De la Vega added.
Effective Leadership Strategies in Mexico
Employers in Mexico should expect increased union organizing efforts in coming years, noted Salvador Pasquel Villegas, an attorney with Baker McKenzie in Mexico City.
Companies should prepare by implementing policies and practices that promote positive employee-employer relations, he added.
Companies with manufacturing or commercial operations in Mexico should update their HR operating procedures, including:
- Labor strategies.
- Hiring and termination practices.
- Industry-specific union practice reviews.
HR professionals also need to connect with workers in Mexico to establish and strengthen relationships, De la Vega explained.
Depending on the nature of the job, workers’ access to social media may be necessary, either during their work shifts or after hours, according to Mexican federal labor law. HR often communicates with workers by recording and sending them audio messages on social media platforms like Facebook and WhatsApp, De la Vega stated.
Catherine Skrzypinski is a freelance writer based in Vancouver, British Columbia.