HR Policy Global

USMCA’s Third Labor Case Closed with Unprecedented Contract by Independent Mexican Union

A Panasonic facility in Reysona, Mexico recently reached a deal with its newly-elected union with a 9.5% salary increase and reinstatement of wrongfully terminated workers. The union, backed by Susana Prieto and representing multiple facilities at Mexico’s northern border, has demonstrated its ability to successfully lead collective negotiations with global employers, leverage support from the USMCA and international unions and organizations, and most importantly, call for a strike. 

Background: Last September, workers in the facility voted to terminate a pre-existing contract with a CTM-affiliated union. However, the company signed a new collective bargaining agreement with another CTM-affiliated union without a proper voting process in March. In April, the independent union SNITIS filed a petition to represent the employees and subsequently won the election. Meanwhile, SNITIS also filed a complaint under the USMCA challenging the March contract. In May, U.S. DOL and USTR asked Mexico to review the case and suspended all unliquidated entries of goods from the facility. 

Historic CBA: Mexico accepted the request and has been working with the two parties on a contract. An agreement was reached earlier this month including:

  • A 9.5% salary increase, higher than the inflation rate and the 8.5% deal negotiated in May between a global automaker and its independent union, but lower than the 40% increase initially proposed by the union;

  • Payment of a one-time bonus;

  • Reimbursement of illegally deducted union dues to the previous union;

  • Establish a Truth and Justice Commission to help ensure workers’ rights; and

  • Reinstatement of workers who were dismissed due to their union activities on July 1.

Notably, the union called for a strike prior to reaching the agreement. Even though the strike was eventually canceled, it reflected the union’s strong influence on the workers. 

Role of labor attachés: Employers should also pay attention to the role of labor attachés in this case. They were posted by U.S. DOL to monitor implementation of the USMCA labor obligations and support bilateral cooperation on labor and employment matters. In this case, labor attachés “visited Reynosa to interview stakeholders, hear worker testimony, and further the department’s ability to collect case evidence crucial to the successful resolution,” according to a DOL statement

Outlook: The key for any new independent union is to see if they can gain trust from workers through grassroots campaigning. SNITIS has shown the workers their ability to negotiate better wages and benefits. We are likely to see it continue to leverage the USMCA and international unions, expand its influence in the region, and try to organize more companies.

Published on: July 22, 2022

Authors: Wenchao Dong

Topics: Employee Relations, Latin America

Wenchao Dong

Director, Global Affairs, HR Policy Association

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