Imagine if 99% of union existing contracts were declared illegal in the United States and the unions had to start gaining recognition all over again. It would capture the attention of the country overnight and HR people would be all over it. South of the border in Mexico there were around 500,000 registered collective bargaining agreements in place in 2019 when new laws were passed that required them to be voted on by employees or they would disappear. The deadline for so called “legitimization” of CBAs is here and now…1st May 2023. The most recent statistics show that, failing a tsunami of ratification votes, less than 1% of existing agreements will exist after the deadline. In a country where an estimated 95% of workers were covered by union agreements in 2019, bargaining rights will disappear for almost all of them overnight.
One would think this would make world news, or at least news in North America… but it barely gets a mention outside legal circles in Mexico. The Government, led by Andres Manuel Lopez Obrador (AMLO), designed the law to outlaw so-called Protection Contracts and replace them with real agreements negotiated by genuine trade unions. So far it has been a spectacular failure. The unions have nothing to celebrate other than one or two victories in the auto parts industry. The US government made massive investments in a complaints procedure under the USMCA Treaty to facilitate and judge complaints on failures to uphold standards on Freedom of Association… there have been just seven. Meanwhile, and understandably, most employers are doing and saying nothing. This devastation of union rights dwarfs President Reagan’s attack on US air traffic controllers in 1981 and Margaret Thatcher’s wholesale demolition of the UK union movement from 1979 is passing by un-noticed, unchallenged and unheralded… yet.
Think back to 2019. There was a flurry of activity amongst US companies in Mexico concerned whether they should legitimize current “sham” agreements or prepare for all-out war with Mexico’s famous red unions and their red and black flags. Most did nothing … and it seems to have worked out fine… but is this an option going forward? The pendulum has swung … but the Mexican and US governments, and trade unions on both sides of the border, will not see this as a new and acceptable status quo. To quote Winston Churchill, this is not the end – simply “the end of the beginning”. Corporate America would do well to take stock and set out strategies for a new future.
The future for Mexico looks like it will be played by American rules. Unions will have to recruit members, win battles for recognition and negotiate contracts successfully and employers will not be able to rely on a Protection Contract sitting in a government register to prevent organizing. This is not the time to do nothing. There are many scenarios but here are three:
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Newly union-free companies who want to stay that way will have to clean house. Top of the to do list are the issues that have been proven to gain most traction for unions with workers – profit share, gender equality, and wages and hours. Think now about US approaches to workplace fairness that have not been top of the Mexican agenda.
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Mexico’s “red unions” need high profile fights and wins to gain the ground the new laws promised them. These will come in the auto sector and in the border town Maquiladoras… and likely in big name companies. The massive strikes in Matamoros in 2019 showed that workers can be mobilized for the right cause – in this case wages and profit share.
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The “white unions” have enjoyed a responsibility free income stream for many years and are unlikely to let it go easily. Their problem is that they have been organized to collect rent and register agreements, not to bargain them and represent workers… but they will learn.
Now is the time to start planning your union or union-free strategy in Mexico and even the region, and there is no better way to do so than attending HRPA’s LATAM Summit, where we have the most distinguished panel on this topic – including Carlos Martin Del Campo, Partner at Baker McKenzie, Juan Pablo Moreno Arreola, Mexico Labor and Employee Relations Manager at Caterpillar, Carlos Quintana, Senior Labor Advisor for Mexico, at U.S. Department of Labor, and Pedro Américo Furtado de Oliveira, Director for Mexico and Cuba at International Labor Organization. Additionally, we will release A Comparative Analysis of NLRA and Mexican Employment and Labor Laws at the meeting.
