HR Policy Global

Mexico: Newest Labor Complaint under the USMCA Involved in Contract Ownership Dispute

Last week, Mexico accepted the fourth labor complaint filed by the US government under the USMCA (T-Mec), to probe alleged worker rights violations at a Stellantis factory, where two unions disputed the ownership of the collective bargaining agreement of the facility. Additionally, a liquidation suspension of any unliquidated imports from the plant will be imposed while the investigation is conducted.  

The unique situation about the facility is that two collective bargaining agreements allegedly cover the workers in the facility – one negotiated by traditional union CTM, which was not recognized by the US government, and another by the separate Sindicato Nacional de Trabajadores Mineros, MetalúrgicosSiderúrgicos y Similares de la República Mexicana (the Miners Union). The latter union was a party to the labor complaint that spurred the request, alongside AFL-CIO and UAW.  

The union dispute has been going on since 2014. Even though Mexico's federal labor center in May said the Miners Union held the only valid contract, CTM continues to allegedly block workers from being represented by the Miners Union. Following the request, Mexico government will have 45 days to present a solution to their US counterparts.  

While Mexico may rule the CTM’s contract invalid and effectively prevent them from engaging with workers in the facility, the government also could order a vote to decide which union has the ownership. Depending on the outcome, unlike the previous Tridonex and General Motors cases which have been resolved through negotiations, the US government could strike a proceeding before a dispute resolution panel, according to the USMCA. 

Outlook: including the Panasonic case, US government has suspended both facilities in question from importing certain goods, which adds to a huge financial pressure for employers to resolve the probe as quickly as possible. Additionally, companies also should be careful about working with a new union as workers at VU manufacturing have reported been considering filing a complaint against the company imposing a union favorable to the company.

Published on: June 22, 2022

Authors: Wenchao Dong

Topics: Latin America

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