As a result of recent labor enforcement actions taken under the Canada-U.S.-Mexico Agreement (“CUSMA”) impacting Canadian companies with facilities or subsidiaries in Mexico, several questions arise regarding employer rights under Mexican labor law.
Specifically, what rights a Mexican company has in the midst of all this new enforcement activity. In the void of a union contract at the General Motors (“GM”) Mexican facility, for example, can GM — as it could generally under U.S. labor law — direct non-coercive and non-threatening communications to its employees regarding why a union is unnecessary, or tell employees how they will be unable to deal directly with their employer in a unionized setting?
Unfortunately, the answer is unclear under the relatively new Mexican labor law.
In May 2021, the first U.S. petition under the CUSMA’s “Rapid Response Mechanism” asked Mexico to investigate a union vote at General Motors’ Silao, Mexico facility. The vote had been suspended over allegations of vote tampering. Ultimately, in July 2021, the U.S. and Mexico entered into a comprehensive remediation plan to address labor practices, requiring a new legitimization vote at the plant. The remediation plan mandated cooperation from General Motors de México, General Motors Company, and certain of its affiliates.
Shortly thereafter, as a result of the remediation plan at the General Motors facility, workers conducted a new vote and voted to cancel their collective bargaining contract. The result of the new vote — which was live-blogged by the Mexican government — was fairly close: 2,623 in favor of the existing collective contract, 3,214 against, and 39 null.
On the other hand, we know relatively little about permitted employer actions in the absence of enforcement activity. The new Mexican Federal Labor Law does not appear to speak to the kinds of communications that an employer can have with its employees prior to a vote for the union. For example, Article 390 Ter., Section (II)(d) provides that employers “no podrá tener intervención alguna durante el procedimiento de consulta,” or, translated, “may not have any intervention during the consultation procedure.” However, the “consultation procedure” is the procedure by which employees vote upon a collective bargaining agreement. Before a union arrives at that point, it will likely have significant interactions with the proposed bargaining unit.
Source: Vision & Elkins
SYMBIOSIS is actively advising Canadian companies with operations in Mexico on all aspects of the broad Legal Compliance and Corporate Governance. We are tracking developments and are available to assist foreign investors with questions about Mexico’s legal framework and strict compliance options. For further information please contact us, the Partners and lawyers of Symbiosis are more than willing to work together with you to support you in analysing the impact of this criterion on your company’s operations in Mexico, as well as in any regularization activity.
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