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News Article

Profit Sharing Causes Tension Between Grupo México And Workers

By Paloma Duran | Tue, 05/24/2022 - 11:14

Grupo México has reached a series of agreements with the National Mining Union of the Confederation of Mexican Workers (CTM) for the paymentof profit sharing (PTU). However, there are still disagreements with workers who, due to the outsourcing reform in 2021, lost out on profits. Consequently, the company is trying to negotiate with them to avoid strikes.

Taking into account its legal responsibility and the high prices of copper, Grupo México agreed to pay out a legally mandated share of its profits for 2021, which stand at around MX$700,000 (US$35,190) per worker. Javier Villareal, Secretary General, CTM Sonora, explained that the payment negotiations began after the modification of the outsourcing law in April 2021 to ensure the company complies with all its legal responsibilities.

However, Villareal commented that not all workers are satisfied with the new agreements. For instance, at a plant in Nacozari, Sonora, workers were dismayed enough to plan a strike on May 18.  “Even though the distribution of profits would be 10 percent in Nacozari, this figure was similar to last year’s. The workers were displeased, especially because the price of copper has skyrocketed, benefiting the company significantly,” Villareal said.

Subsequently, CTM resumed its negotiations with Grupo México and reached a new agreement similar to that of Cananea, with which the strike was cancelled. “A good agreement was reached  as in the case of Cananea, where each worker received a share of their US$35,190 in profits,” said Villareal. The CTM also highlighted that Nacozari workers will also get additional benefits and a 7.5 percent wage increase.

In addition, Grupo México indicated that within a period of three months, a Tax Audit will be carried out to review CTM Section 07’s Claim of Nonconformity and establish the final amount to be paid. The company committed to make this payment as soon as the correct amount is established.

Grupo México currently has an injunction against the 2021 outsourcing reform, which established a maximun limit on the amount of profit sharing. Following the reform, this must be equivalent of three months of salary or the average PTU payment received in the last 3 years, whichever amount benefits the worker. The changes have sparked unrest among miners, as some have lost significant earnings. Consequently, there have been more problems between companies and unions.

“We consider this reform to be unconstitutional because profit sharing is a constitutional right. Article 123 says that workers have a right to these benefits. To ensure the system works, a multilateral National Commission will be established that will dicatate the percentage every 10 years. Suddenly, the deputies and senators come up with the idea of legislating the issue when it is not supposed to happen, hence the injuction. Nevertheless, we will continue to comply with the law," said Villareal.

The data used in this article was sourced from:  
MBN, El Economista
Photo by:   Peter Burdon
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Paloma Duran Paloma Duran Journalist and Industry Analyst