It is not often that we write in this newsletter about developments in the Americas. We prefer to leave that to our colleagues in HR Policy Association and HR Policy Global. But the last week saw a major development in Mexico which could have implications for any European company that has facilities in the country.
Workers at a General Motors plant in the city of Silao voted overwhelmingly in favour of a new, independent trade union, bringing to an end the role of a “protectionist” union. A “protectionist” union is one that signs a legally binding collective agreement with management which the workers the union claims to represent may not even be aware of. In fact, they may not even be aware of the existence of the “protectionism” union, but its presence excludes any other union from representing workers.
A 2019 labour reform passed by President Andrés Manuel López Obrador’s ruling Morena party was designed to end the role of “protectionist” unions and to encourage independent unions. The law was further bolstered by provisions in USMCA, which replaced the North American Free Trade Agreement in 2020.
President Biden, who has always made clear his support of unions, provided financial support to help implement Mexico’s reforms, including a new labour court system. The US government asked the Mexican government for a review under the terms of USMCA in the General Motors case to see whether workers were being denied genuine freedom of association.
“The (old) union always… backed the plant, it never backed the workers,” said María Alejandra Morales Reynoso, general secretary of SINTTIA, which won the GM vote. “What we want is to represent the workers.” More than 4,000 workers voted for SINTTIA with turnout of almost 90 per cent, the government said.
GM said the vote was an “unprecedented democratic exercise” and once it was formally notified, it would start negotiating with SINTTIA. “The whole manufacturing sector and the whole country should probably pay much more attention to what’s going on at GM,” Carlos Capistrán, head of Canada and Mexico economics at Bank of America Securities told the Financial Times. “This is one of the things that is going to determine the dynamic in the labour market for years to come in Mexico.”
If you want more information on Mexico or to keep up with developments in labour relations in the country then contact Wen Dong [email protected] who can link you in to our information sharing networks on Latin America and Mexico.