Outsourcing, a mode that had become vitiated and that it was prudent to eradicate: Francisco Hernández

Note published on April 5 in El Sol de México, Sociedad [Society] Section by Bertha Becerra.
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Workers and employers, with the federal government, reached agreements on subcontracting this Monday.

Outsourcing was a mode that had become vitiated and that it was prudent to eradicate, said the national leader of telephone workers Francisco Hernández Juárez, collegiate leader of the National Workers’ Union (UNT), after the agreement on subcontracting between workers and employers, with the federal government.

“But I do not fail to acknowledge that this represented good progress. It was a good agreement. It will limit this type of illegal practices”, he told El Sol de México.

He maintained that the Departments of Labor, Treasury and the Social Security Institute will be very vigilant to ensure that this mode is not misused and that it is only used for specific cases that are not essential to companies and that lower salaries are not reported and, above all, that taxes are paid.

He said that there are large companies that only have the manager on their payroll. The rest of the employees are subcontracted, and the payroll is in the hands of another company.

“For some time, we have been seeking that a law be made that definitively eradicated this subcontracting model , a mechanism that was used in an abusive manner in order to avoid the payment of employee profit sharing; to take legal benefits away from them and, obviously, to affect their rights.”

On the other hand, for Labor Law expert, lawyer Héctor de la Cruz, the agreement that was reached this Monday at Palacio Nacional [Seat of the Federal Executive Power] between the workers’ and the employers’ sectors with the federal government on the topic of subcontracting or outsourcing, considers 3 fundamental axes:

The definitive prohibition of personnel subcontracting. Companies will only be allowed to contract specialized services or works that are not part of their main economic activity or of their corporate purpose. The existence of contracts in which the labor force of Mexican workers is essentially contracted will be illegal.

There will be a registry of subcontractor companies, under the responsibility of the Department of Labor and Social Welfare (STPS).

And a term of three months will be granted for the contracting companies to incorporate the subcontractor’s workers into their payroll.

These agreements, signed at Palacio Nacional this Monday go hand in hand with the proposal for the amendment of Article 127 of the Federal Labor Law, that preserves the right of workers to participate in profit sharing that will now have a maximum cap of 3 months of salary or the average of what was received in the previous 3 years, he said.

This guarantees that there are no distortions in certain production sectors that could end up having to distribute very high amounts and put the financial stability of the work source at risk.

In the opinion of the specialist in Labor Law “this agreement protects the working class by preventing certain companies from abusing subcontracting and undermining employees’ labor rights by paying them very low salaries, not giving them social security or sharing profits.”

Once the worker is acknowledged as an employee of the true employer, he can enjoy the rights granted by law.

However, said expert De la Cruz of the De la Vega & Martínez Rojas Law Firm, the topic of profit sharing protects only a sector of companies that can generate disproportionate profit sharing, but it does not protect the needs of small companies, who have the obligation of paying 10% of profit sharing, together with other operating expenses, social security, among others.

He believes that, in many cases, it could result in their looking for ways of avoiding responsibility or even closing down.

And he highlighted that it would be important to provide a reasonable term for the implementation of this regulation for companies to be able to make the necessary adjustments, as there are also changes in the tax legislation in regard to the non-deductibility of invoices issued by outsourcing services and also in social security matters.

“In my opinion, it cannot be implemented immediately, particularly since the STPS must issue the general provisions to obtain the authorization that contracting companies must have, which, to date, do not exist.”