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Only Friction of Contracts Been Legitimized During Mexico’s Labor Reform, a Report Shows

Published on: November 16, 2022

Authors: Wenchao Dong

Topics: Latin America

Mexico passed its significant labor reform in 2019, along with the labor provisions of the US-Mexico-Canada (USMCA) trade agreement, to provide and guarantee workers’ right to freely form or choose unionEven though independent unions have gained some momentum in the past year, new data from the Federal Center for Conciliation and Labor Registration (CFCRL) shows only 7,908 contracts were legitimized out of more than 530,000 registered in the country. Global employers should expect most contracts will expire next May and see a drastic drop on union representation rate in the country.  

Background 

In Mexico, 13% of the workforce are covered by more than 530,000 CBAs, and 85% of which were installed by “protection unions.”  Since the labor reform was implemented, 7,908 contracts legitimation processes have been carried out. Additionally, only 87 of them, or 1.1%, were voted out and renegotiated. Furthermore, 5 cases were filed by the United States to Mexico under the Rapid Response Labor Mechanism of the USMCA.  

What would happen after May 2023? 

On May 2, 2023, all collective agreements that were not legitimized by a vote will be invalidatedEven though all the terms and conditions will stay after the expiration of the CBA, millions of workers will lose their current union status and potentially be exposed to other unions. However, it does not appear a major union movement like what happened in the United States in 1930s will be replicated in Mexico due to the lack of resources and motivations.  

Nevertheless, we have and will continue to observe some movements from independent unions that have won victories against “protection unions” in several states across the country. The continuity of the momentum will largely depend on if there will be a larger organizational strategy in Mexico that takes an industrial and national approach, focusing on key employers and sectors in regional industrial concentrations along the northern border or in the auto supply chains. This strategic approach requires union campaigns towards entire sectors or regions instead of narrowly focusing on individual workplaces and relying on the spontaneous uprisings of workerswhich is what’s happening now.  

Wenchao Dong

Director, Global Affairs, HR Policy Association

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