Management and Labor seeking to grasp the full significance of Mexican labor reform

While some employers say it was too little too late, and other detractors claim it went too far, the Mexican Labor Reform of 2012 was undoubtedly the most sweeping change that Mexico’s government has implemented to the country’s labor statutes since the 1970s. The overhaul streamlined the cumbersome rules that many claimed discouraged smaller businesses from hiring workers, which had resulted in millions of Mexican workers seeking employment in the off-the-books, large informal sector of the country’s economy. At present, nearly two years after the historic legislation passed, many workers and employers still remain uncertain of just what the changes specifically entail and how these changes affects them. Below is a list of the more pertinent changes resulting from Mexican labor reform, and what they mean for the country’s businesses.

Discrimination Policy Clarified: Anti-discrimination law was brought more in line with that of other developed nations, making it unlawful to discriminate on the basis of national or ethnic origin, sex, age, health, disability, religion, migratory status, sexual orientation, or civil status, and among other prohibited categories.

Employment Status: The new Mexican labor reform specifically allows for temporary and seasonal employment, basing pay on an hourly, minimum-wage standard. Companies may hire outsourced labor through an outsourcing firm, but only in special cases, and only if outsource workers are guaranteed the same benefits as permanent staff. The new law also provides for a 30-day probationary period to confirm employee skills and abilities, thus limiting the risk to shouldered by employers in hiring new personnel.

Back Pay: Rather than handicapping employers by awarding full and unlimited back pay to terminated employees in cases the courts deem to be unfair terminations, regardless of the length of time since their termination, the reform has struck a compromise to preserve employee rights without imposing excessive burdens on employers. Back pay is now limited to 12 months, as a result of changes made under the Mexican labor reform.

Unions: The reform has made the courts responsible for publishing collective bargaining agreements between labor unions and employers as well as union financial accounting statements and official standards. Employees do not have to be in the dark regarding these agreements and the internal workings of their unions, as had been the case in the past.

Joint Committee for Productivity and Training: The new Joint Committee for Productivity and Training has replaced the Joint Training Committee to reflect the emphasis of the Mexican labor reform on productivity. Employers with over 50 employees must now form such a committee, which is composed of representatives from both management and labor. Programs for proper training and productivity maximization and evaluation are established by this committee, which will hopfully result in the creation of a business climate and workforce capable of achieving increased productivity and improved education, labor competence and levels of skills.