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Delicate, Precarious Times for Employees

Alfonso Rodríguez - Legalmex
Director General

STORY INLINE POST

Sat, 10/28/2017 - 17:25

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Q: How would you evaluate the working environment in Mexico? A: This is a delicate time, where salaries do not adequately compensate the work performed. There is a precariousness in general regarding employment and this results in employees who are discontented and discouraged. According to the authorities, employment rates have increased on the basis of incomes of new IMSS registrations but this fails to take into account working conditions, such as the number of work-related casualties. Nor does it take into account the average wages of the insured parties, which are ridiculously low in comparison with any other OECD country.

Trade unions have lost much of their strength and changes to the law have contributed to this. Their freedom to pressure companies and the government itself has been more strictly regulated so they will now have to demonstrate that they effectively represent workers’ rights and will be obligated to make the union’s finances transparent to its members.

Q: What challenges do companies face with the implementation of the latest labor reform? A: The mining industry was seriously affected by the changes of the law in 2012 in terms of occupational health and safety. Regardless, it is necessary to recognize the enormous effort of employers within the mining sector, as well as some unions - especially SNMM - in accident prevention. Effectively, they have managed to reduce the incidence of accidents and fatalities.

The latest constitutional labor reform is scheduled to be implemented by Feb. 24, 2018 and mainly deals with the disappearance of the Conciliation and Arbitration Boards, which will now be incorporated into the judiciary through labor courts or tribunals. This was done in an effort to try to make justice more effective, efficient and honest and replace the currently flawed process.

Another major change is the creation of a new independent, autonomous body with its own assets, which will be in charge of regulating the registration of trade unions, the expedition of payment, changes in statutes and directives, registration of new collective agreements and revisions to existing ones, accreditation of representativeness in both cases, supervision of and compliance with transparency obligations, among other duties. This has worried many of the unions, which are considering challenging the constitutionality of this measure through an amparo.

Q: What impact will the implementation of the reform have on unions?

A: If the law is fully implemented according to its explanatory memorandum, the vast majority of trade union, will be significantly affected. This also applies to trade unions in the mining industry, with few exceptions. Since important unions like SNMM are not employer-led, nor do they employ protection contracts, in theory they should not be impacted or worried about the change. But other unions that have served as allies of employers and that have collective bargaining agreements (which only exist on paper since they are not legally binding) may find that the amendment creates conflict within their corporate and financial management structures.

Q: What additional changes have to be made to labor legislation?

A: At present the labor issue has been overseen by the Public Prosecutor. Few entrepreneurs are fully informed about the implementation of the CFDI payroll system, and most relevant the filling of the complementary CFDI payroll V1.2. This is important since with these documents, which are mandatory as of Jan. 1, 2017, the tax and labor authorities, IMSS, Infonavit, local treasuries, the Ministry of Labor and Arbitration and Conciliation Boards are able to immediately detect failure to adhere to the law. This includes subcontracting, improper or incomplete payment of employer taxes and other issues.

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