The decree amending several provisions of the Constitution with regard to labour justice, freedom of association and collective bargaining was recently published in the Federal Official Gazette. Key amendments include the abolishment of the conciliation and arbitration boards and the establishment of a new federal agency which will be responsible for the registration of collective bargaining agreements and trade union organisations, as well as all related administrative processes.
Under the Federal Labour Law, fixed-term employment agreements can be validly entered into only when the temporary and extraordinary nature of a job requires it or an employer must temporarily replace an employee. Failure to apply fixed-term agreements in accordance with the law may result in a temporary employment relationship being classified as an employment relationship for an indefinite term and a finding that its termination was unjustified.
The National Minimum Wages Commission (CONASAMI) recently published a resolution increasing general and professional minimum wages. CONASAMI first increased the general minimum wage by Ps4, resulting in a rate of Ps77.04 per day, with the objective of gradually and steadily improving the purchasing power of employees who earn the minimum wage. Immediately thereafter, it increased both general and professional minimum wages by 3.9%, resulting in a rate of Ps80.04 per day.
The Seventh Collegiate Court in Labour Matters of the First Circuit recently ruled that stock options established in an individual employment agreement form part of the employee's salary and must therefore be taken into account when calculating the employee's severance pay. Employers should thus ensure that employee stock option plans clearly indicate that they are an extraordinary item of compensation excluded from such calculation.
The president recently proposed several amendments to employment and labour law. While the proposed new judicial structure in which collective matters are managed at a federal level is intended to increase Mexico's competitiveness and provide faster solutions for individual employment conflicts, the proposed collective bargaining agreement registration requirements appear to be quite burdensome.
A decree was recently published in the Federal Official Gazette which amends the Law on the Institute of the National Fund for the Housing of Workers. The decree introduces the possibility for employers to fulfil the payment and information requirements formulated by the Institute of the National Fund for the Housing of Workers by any means – including by electronic means.
In November 2015 a federal court controversy erupted over the monetary limit to lost wages claims that was introduced as part of major reforms to the Federal Labour Law. Several federal courts issued contradictory interpretations regarding the constitutionality of the lost wages limit in the context of labour proceedings initiated by employees. The Supreme Court has finally resolved the matter.
The National Minimum Wages Commission recently resolved that a single general minimum wage of Ps70.10 per day shall apply throughout Mexico, concluding the process of converging the minimum wages of Geographical Areas A and B. The minimum wage in Geographical Area B was increased by 2.66% to match that of Geographical Area A.
The Ministry of Labour and Social Welfare, together with the National Institute for Women and the National Council to Prevent Discrimination, recently published the Mexican Standard on Equal Employment Opportunities and Non-discrimination. The non-binding standard is intended to serve as a guideline to evaluate and certify equal employment opportunity and non-discrimination practices in the workplace.
In 2012 major reforms to the Federal Labour Law entered into force which included a limit on the lost wages that employees may claim from employers in case of wrongful dismissal. In contrast with previous federal court judgments, a federal court recently ruled that this limit is unconstitutional and against the principles established in several international treaties on human rights.
In 2012 amendments to the Federal Labour Law which govern outsourcing regimes became binding. The amendments immediately generated controversy, mainly due to deficiencies in the language of the provisions. However, two recent Supreme Court decisions have provided welcome clarity, confirming the constitutionality of the provisions and further defining their scope and legal purpose.
The Federal Labour Law is now aligned with both the Constitution – which was previously amended to reinforce the protection of human rights and prevent child labour – and new International Labour Organisation standards. One of the most significant new rules is the prohibition against overtime work, work on Sundays and mandatory holidays, and work after 10:00pm for minors.
The use of job offer letters has become a common practice in the business sector when an employer wishes to communicate the terms of employment to a potential employee. However, when it comes to labour and employment matters, Mexico remains an extremely traditional country. The use of job offer letters has generated a number of legal issues in this context.
In 2014 the Supreme Court of Justice issued rulings in two major employment discrimination cases. For the first time, the court defined the scope of employment discrimination, considering protection from discrimination to be a fundamental right which, if violated, may result in multiple penalties for employers.
Following legal challenges to a provision of the Federal Labour Law 2012, the Supreme Court has confirmed that payment of employee salaries through bank deposit, debit card, wire transfer or other electronic means is constitutional. However, electronic payment is completely optional for employees and employers should thus take certain precautions before implementing such payment systems.
Recent developments regarding the Ebola outbreak have reminded employers that a sanitary emergency could emerge when least expected. Thus, it is important to bear in mind that employment law has now changed. The Federal Labour Law establishes the legal effects of a sanitary contingency declaration on employment relationships.
Following the 2012 reform of the Federal Labour Law, a new limit was imposed on the payment of lost wages arising from wrongful dismissal. This change significantly reduces employers' potential liability in unfair dismissal cases. Moreover, a recent court judgment confirmed that the reforms regarding payment of lost wages and the new payment limit respect plaintiffs' human rights.
Two recent court rulings are good examples of how the courts have begun to apply the international human rights framework to employment matters in favour of employees, as guaranteed by the Constitution. These rulings have defined the scope of the law on discrimination against women, establishing important criteria that employers must meet before terminating pregnant employees or employees on maternity leave.
In 2012 an amendment to the Federal Labour Law was introduced which provided that workers may execute activities that are complementary or related to their main duties. This provision was almost immediately challenged as unconstitutional and a violation of workers' rights. The Supreme Court has now ruled that the provision is not unconstitutional, but this decision raises significant issues.
The Federal Labour Law was recently amended for the first time in more than 40 years. One of many relevant aspects of the new law is the inclusion of new regulations for outsourcing services. Every company in Mexico using the services or work of a third party must now observe several new rules, each of which presents its own challenges and potential risks.