Mexico’s Collective Bargaining Freedom Protocol: An Introduction for Employers Doing Business in Mexico

In accordance with the International Labour Standards on Freedom of Association (enshrined in the International Labour Organization (ILO) Constitution, the ILO Declaration of Philadelphia, and the ILO Declaration on Fundamental Principles and Rights at Work) and the Mexican Political Constitution, Mexico’s Administration of Labor Inspection of the Labor Ministry has issued the Collective Bargaining Freedom Protocol measure, which, among other things, establishes the procedures and rules that inspectors of the administration will have to follow when conducting labor-related inspections at the worksites of employers operating in Mexico to verify the existence or absence of collective bargaining agreements (CBAs).

Although the protocol is applicable directly to administration’s inspectors (and, indirectly, to employers in Mexico), it will affect employer as follows:

1. Inspectors will visit Mexican employers’ worksites, on a random basis, in order to verify whether a CBA is in place and whether: (i) the CBA has been published in a visible place at the worksite and has been made available for the review of unionized employees at any time; and (ii) the CBA has been distributed (i.e., delivered in hard copy and received in writing by the unionized employees of the corresponding worksite) to the employees of the site. The foregoing complies with Article 132, Section XVIII of the Mexican Federal Labor Law (FLL).
2. Unionized employees of the worksites (5 to 10 percent of the available employees) will be interviewed by an inspector in order to verify whether a CBA is in place at the relevant worksite and, if one is, whether it has been visibly published and distributed among the unionized employees.

Sanctions Under the FLL

Keep in mind that, under the FLL, Mexican employers that fail to comply with the provisions of the FLL requiring that CBAs be published and distributed (as listed in (1) and (2) above) could be subject to fines or sanctions that  span from 50 to 5,000 times the daily minimum wage in Mexico (Mex$73.04). In other words, a fine or sanction could range from Mex$3,652.00 to Mex$365,200.00 (USD$202 to USD$20,288).

Important Note for Employers

Although the FLL does not establish an express obligation for Mexican employers to execute or enter into CBAs with labor unions, it is advisable that a CBA be at least executed with a protective union or so-called “white union” (i.e., a union closely aligned with the interests of the employer) in order to be better protected from a third active union, or so-called “red union,” which could file a strike call procedure against the company and ultimately cause a work stoppage.

Finally, employers doing business in Mexico should remember that the FLL and the Mexican Federal Constitution recognize the principle of freedom of association—the right to bargain collectively and organize—as an inherent right of employees and employers.