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Labour Law Reform In Mexico

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Mexico is preparing a reform to improve its laubor law and encourage private investment. New payment regime, clear rules and time frames regarding dispute resolution and better regulation of unions are some of the main goals of this initiative. If the Mexican Congress is agreed with Mr. President Calderon’s administration and passes this reform it could be a positive signal that Mexico is taking concrete steps for legal certainty to investors and employees.

Today payment is based on a daily-salary; with this propose payment would be based on hourly rate, which is a standard in North America because it is more convenient for employer and employees in terms of efficiency and proper retribution.

Long process to resolve labour disputes, severance packages and right of strike have been inhibiting factors for foreign investment. With this new set of rules, the Mexican government is proposing to expedite dispute resolutions, set a limit of six moths in severance packages and establish a time line to resolve strikes, after 60 work-days, the laubor authority could intervene to find a proper solution.

Some commentators say that the actual labour law has allowed union leaders to take advantage of employer and of members of their organizations; therefore, this initiative proposes to prohibit automatic discounts to pay union fees and unfair clauses on collective contracts.

With this initiative the Mexican government is working to improve labour structure and encourage private investment. Now, it is up to the Congress to decide which route Mexico should follow in the near future.

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