In accordance with the commitments acquired by the Mexican Government with the signature of the Free Trade Agreement between Mexico, the United States and Canada (USMCA), it was established in Annex 23-A that all existing collective bargaining agreements in Mexico must be reviewed and approved by the majority of the workers covered by them through their personal, free and secret vote, within a term of four years from the entry into force of the reform to the Federal Labor Law; agreements that are not reviewed and ratified by the majority of workers within this term will be declared to be null and void.
The Executive Order for the Reforms to the Federal Labor Law was published on May 1 2019 and entered into force on May 2 of the same year. Its Article Eleven includes the commitment established in the USMCA in relation to the legitimation of collective bargaining agreements and, therefore, these agreements must be legitimized by May 1 2023, at the latest, under penalty of being declared to be null and void.
In this regard, it is important to note that the obligation of legitimizing the collective bargaining agreement corresponds to the union that holds the agreement, without intervention from the employer; the Federal Center for Labor Conciliation and Registration is the responsible authority in charge of verifying the legitimation process of collective bargaining agreements.
The process for the legitimation of collective bargaining agreements is significantly behind schedule, considering that the deadline for compliance is less than a year away and, to date, according to information provided by the Department of Labor and Social Welfare, around 4,794 agreements have been legitimated out of a universe of 500,000 existing collective bargaining agreements, that is, less than 10%.
If this trend continues, 80% of all collective bargaining agreements will have been declared null and void next year, which will entail a radical change in many of our clients’ labor relationships.
We remain truly yours for any additional Information in relation to this note.