The Reform on subcontracting will be discussed in two weeks

Legislators must prioritize the impact on the productivity of industries when defining when this mode can be used and when it can’t, specialists agree.

Changes to Articles 14, 15A to 15D of the Federal Labor Law (LFT), which were included for the first time in 2012 in the legislation to regulate subcontracting, could be discussed in two weeks’ time when the draft opinion on the new regulation reaches the House of Representatives.

Since the bill presented by the Federal Executive Power on November 12, 2020 to the Federal Congress, the discussion on the new regulations that will have to be followed by companies in hiring and administrating their workers has been delayed; “the discussion in the Commission on Labor and Social Welfare will take place in two weeks, it is a topic in which there is a commitment to move forward with the objective of putting an end to bad practices that have harmed public finances and have negatively affected the rights of the workers”, said the Morena legislator, Anita Sánchez, secretary of said chamber commission.

The legislator explained that after talking with the coordinator of the Political Coordination Board and the president of the Commission on Labor, Jesús Baldenebro, the need to discuss the proposal that seeks to connect the Federal Labor Law, the Social Security Law, the Infonavit [National Worker’s Housing Fund Institute] Law, the Tax Code, the Income Tax Law and the VAT Law was presented.

Additionally, the central point of the bill sent by President Andrés Manuel López Obrador “prohibits subcontracting personnel, which means that a natural person or an entity provides or makes their own workers available for the benefit of another natural person or entity.”
When consulted in this regard, specialists pointed out that even when the period for discussion with the Private Sector was extended, fundamental aspects have not been taken into account, particularly those related with productivity; three such aspects have been detected: delimiting the concept of the prohibition of subcontracting to the corporate purpose; that shared services (insourcing) are allowed; that the outsourcing of specialized services or higher technology that make large industries more efficient, as in the case of the automotive industry, be allowed.

“Aside from the economic aspect that the companies will have to negotiate, particularly the PTU [Profit Sharing], the issue of operation is even worrying: Article 14 establishes what can be done by stating that “specialized services or the performance of specialized works are not considered to be personnel subcontracting and they establish that in order to conduct subcontracting it is required that they are not part of the corporate purpose or of the economic activity of the company; and this is practically impossible when it comes to assembling cars, the loss of competitiveness is evident”, explained Óscar de la Vega, partner at the D&M Abogados Firm.

In this sense, he pointed out that “there is still time for legislators to identify what is required to maintain competitiveness and it has nothing to do with paying fewer salaries or evading responsibilities.”
For his part, Germán de la Garza said that “it will be essential for the discussion on the reform to take place in the next few days, because it would provide clear signals about the new legal framework. There are companies with more than 30,000 workers that don’t know what decision they will make; there is great internal pressure that prevents organizations from conducting an adequate restructuring, above all because it involves resources, termination payments, notices to Social Security.”