Collective Bargaining & Contract Law in Mexico
Collective Bargaining Agreement
Definition
A collective bargaining agreement is established between one or more trade unions and one or more employers (or employers’ organizations) to define working conditions.
Article 388: Multiple Unions
- If industrial unions are involved, the collective contract held by the union representing the largest number of workers within the enterprise prevails.
- If craft unions are involved, collective bargaining occurs with all major unions representing the professions, if they agree. Otherwise, each union holds a separate contract for its profession.
- If craft unions and business/industry unions are involved, craft unions may conclude a separate agreement if their membership exceeds the number of workers in the same profession within the business/industry union.
Review: General and Wage
Article 399: Review Petition
A petition for review must be submitted at least sixty days before:
- The expiration of a collective agreement with a fixed term of two years or less.
- The expiry of two years if the fixed-term contract exceeds two years.
- The expiry of two years for indefinite-term contracts or contracts for a determined work period. The calculation of this term is based on the contract’s specifications, or the deposit date if unspecified.
Article 399 Bis: Annual Wage Review
Collective agreements undergo annual review regarding daily cash wages, irrespective of Article 399. This review application must be submitted at least thirty days before the one-year anniversary of the collective agreement’s conclusion, revision, or extension.
Article 401: Termination
A collective bargaining agreement terminates:
- By mutual consent.
- Upon completion of the work.
- Due to company or establishment closure.
Key Features
- Mandatory
- Extensible
- Immediate
- General
Content
- Contract Clauses
- Regulatory Elements: Clauses pertaining to general working conditions.
- Mandatory Elements: Clauses establishing obligations.
- Accidental Elements: Clauses addressing specific situations.
Forms of Revision
- Conventional Review: Voluntary for both parties.
- Required Review: Initiated by either the employee or employer within the legal timeframe.
Amendment and Revision
- Revision occurs over time; amendment presupposes specific circumstances.
- Revision is standard; amendment is exceptional.
- Both cannot be initiated simultaneously.
Exclusion Clauses
Entry: The collective agreement or contract must stipulate that the employer will only accept workers who are union members holding the collective labor agreement or the union contract.
Separation: Agreements must establish that the employer separates from workers who resign or are expelled from the respective union.
Theories on Collective Agreements
- Individual Labor: Worker provides service; employer pays a wage.
- Contract Preparation: Aims at a subsequent contract.
- Transaction: Arises from a labor dispute/strike to resolve or prevent future disputes.
- Partnership: Pooled efforts and resources towards a common goal.
- Business Management: Deviation from the agreement implies non-ratification of management.
- Mandate: Must be expressed; essential for union-granted worker mandates.
- Complex Mandate: Dual mandate: improved working conditions and member compliance with the agreement.
- Provision for a Third Party: Benefits the employee; establishes rights and obligations for all workers.
Contract Law
Definition
An agreement between labor unions and multiple employers (or employer unions) to establish paid work conditions within a specific industry.
Article 406: Application
Unions representing at least two-thirds of unionized workers in an industry, across one or more states, economic zones, or the entire country, can apply for a contract-law.
Article 412: Content
- Names and addresses of participating unions and employers.
- Covered entity, states, or area(s), or nationwide effect.
- Duration (not exceeding two years).
- Working conditions as outlined in Article 391, Sections IV, V, VI, and IX.
- Rules for training and development programs within the industry.
- Other agreed-upon stipulations.
Article 415: Collective Agreement to Contract Law Conversion
- Application submitted by unions or employers to the Ministry of Labour and Social Welfare, Governor, or Head of Federal District, as per Article 407.
- Unions and employers must meet the majority requirement of Article 406.
- Petitioners must include a contract copy and indicate the depositing authority.
- The authority verifies the majority requirement and publishes the request in the Official Journal of the Federation or the official state newspaper, with a minimum 15-day opposition period.
- If no opposition arises, the President or Governor declares the contract legally binding, as per Article 414.
Article 419: Contract-Law Review
- Review requests can be made by unions or employers representing the majority specified in Article 406.
- Application submitted to the Ministry of Labour and Social Welfare, Governor, or Head of Federal District at least ninety days before contract expiration.
- The authority verifies the majority requirement and summons affected parties to a convention (Article 411).
- If an agreement is reached, the Ministry, Governor, or Head of Federal District orders its publication in the Official Journal of the Federation or official newspaper. Reforms take effect upon publication unless otherwise specified.
Article 421: Termination
- By mutual consent of parties representing the majority in Article 406.
- If no agreement is reached during review, unless parties exercise the right to strike.
Differences Between Collective Agreement and Contract Law
- Scope: Collective agreement is specific; contract law is general and broader.
- Review: Collective agreement: 60 days prior to expiry; Contract law: 90 days.
- Parties: Collective agreement: single firm or employer; Contract law: at least three employers.
- Conclusion: Collective agreement: with the union representing most workers; Contract law: by convention and elevation of collective agreement.
- Applicability: Collective agreement: specific company; Contract law: entire industry.