Francisco Martínez
Adecco Mexico
Expert Contributor

A Look at the Labor Reform One Month Later

By Francisco Martínez | Thu, 09/30/2021 - 09:02

In September of last year, the legislative process to reform the chapter of the Labor Law on outsourcing of personnel began with the discussion of the issue by the Ministry of Labor and other government entities, which gave rise to the president launching in November 2020 the formal initiative to the legislative power for discussion and approval.

According to an analysis on the perception of the outsourcing of personnel in the Mexican market and society, carried out by the Adecco Mexico Institute that is about to be launched, more than 94 percent of the country's public opinion was focused on the reform due to the statements of the president of Mexico in his morning conferences, which created great expectations regarding the impact that this reform could have on the working lives of millions of people.

In this study, it is also mentioned that 68 percent of people had a negative perception about outsourcing, where the prevailing idea was that outsourcing or subcontracting of personnel favors the over-exploitation of labor and the loss of labor rights, which is why they consider that the decision to reform the law is a great step to improve the rights, security, justice, and dignity of workers.

However, 32 percent of the population had a positive perception of this activity, based on two main reasons. The first is that those who are in favor of eliminating outsourcing are people who have never created a job or who have never had to pay a payroll. The second is that they consider that the elimination of this model will trigger unemployment for thousands of people who work under that scheme in Mexico.

As a specialist on the subject, I can only agree with the idea of ​​improving the rights and dignity of workers. I believe that this should be one of the main objectives in the world of work, both today and in the future, since human capital is the most important and relevant asset of any organization. At Grupo Adecco, we put that idea into practice through our vision, which is, “Make the future work for everyone,” based on dignified and formal employment; however, to know if this expectation has materialized, it is important to consider two points.

The first is to recommend the enrichment of our labor relations model to complement this new reform, with the enactment of a new Temporary Work Law to be able to use a new figure, such as the Specialized Temporary Work Service Companies (ETTs), as one more option for the management of temporary employment in any field or activity, whether it is core or not, of a company, generating formal job opportunities, especially in industries that due to this new normal are generating more jobs than ever and that are seasonal, such as tourism, mass consumption, e-commerce, retail and logistics.

Temporary work agencies create opportunities for young people to gain their first job and offer new employment opportunities for disadvantaged groups, such as women, the over-45 set or people with disabilities, in addition to providing greater formality in employment. It is proven that in countries where ETTs are well regulated, informality decreases exponentially and disadvantaged groups increase their employability. France, Italy, Spain and the US are great examples. Who can verify that the management of temporary employment only through companies directly eradicates informality, the payment of quotas or similar to wages? ETTs would be a great solution in Mexico.

The second point to consider is the time necessary to see the real results of this reform. Since its approval last July until its implementation on Sept. 1, companies that now offer specialized services have had little time to transform the operating model for their clients, not to mention that in less than two months they had to comply with all the requirements requested by the Ministry of Labor, through the REPSE to obtain the certificate and validation of operation by the labor authority of the country.

My estimate is that we must wait at least until the beginning of 2022 to make an assessment of the benefits of this reform and confirm whether the expectations generated by it were truly met, since what we are now seeing is an increase in the labor model with schemes such as commission agents and payment of fees. Companies continue to evaluate which model they will adopt, without internalizing their workforce or deciding whether they will use specialized services for various noncore areas of their business, while continuing to work on their adaptation and transformation in the new normal.

So, a month after the implementation of the Labor Reform, we can say that the market is still assessing what its effects will be within companies, where many companies still cannot decipher what type of specialized service would be indicated for their operation. There are thousands of companies that are still in the process of accrediting their activity as providers of specialized services, by the Ministry of Labor and Social Security.

Without a doubt, 2021 is a year of momentous changes and transformations in all areas of our lives, as we continue to adapt to the new normal caused by the COVID-19 pandemic. In this reality, the work element has become a fundamental pillar of personal and professional fulfillment.

Photo by:   Francisco Martínez