On May 1, 2019, the reform to the Federal Labor Law and other related laws was published in the Official Gazette of the Federation. The main purpose of the reform is to adopt (i) the provisions on labor justice and collective law derived from the Constitutional reform of February 2017; (ii) the principles of Convention 98 of the International Labor Organization; and (iii) the commitments assumed by Mexico in labor matters in the Mexico, United States and Canada Free Trade Agreement (T-MEC).

The most important aspects of the reform include:

Labor Authorities.

• The Local and Federal Conciliation and Arbitration Boards disappear. Its functions will be carried out by the Federal and State Judicial Powers, through Courts specialized in labor matters.
• (i) the Federal Center for Conciliation and Labor Registration (”CFCRL”), responsible for the registration of unions and collective agreements (among others), as well as for the conciliatory function as a mandatory preliminary stage; and (ii) the Local Conciliation Centres, in charge of the preliminary conciliatory function at the State level.

Unions.

• Trade union election is guaranteed through the personal, free, direct and secret vote of the workers.
• Employers may request the cancellation of the registration of unions that extort them.
• Unions must have a “Certificate of Representativeness” issued by the CFCRL, valid for 6 months. A requirement to obtain it is to have the signature of at least 30% of the workers in the workplace.

Collective Employment Agreement (“CCT”).

• Consultation procedures are established between workers as a requirement for the validity of the initial CCT and their revisions. The procedure requires, among other things, that employers provide their workers, with an acknowledgment of receipt, with a copy of the CCT and/or its revisions. This is intended to end the practice of so-called “protection contracts”.
• Existing CCTs must be reviewed at least once within 4 years after the reform, in accordance with the new regulation.

Strikes.

• As a counterweight to the eradication of “protection contracts”, the reform establishes the obligation to accompany the proof of representation of unions that intend to employ employers by signing a CCT.

Individual work relationships.

• New requirements applicable to individual employment contracts are introduced.
• It is possible to replace printed payroll receipts with digital online tax receipts (CFDI).
• Employers are required to adopt a protocol to prevent gender discrimination, to address cases of sexual violence and harassment, and to eradicate forced and child labor.
• The employer may refuse to reinstate in specific cases, covering compensation for this purpose.

Procedural regulation.

• A preliminary conciliation phase is introduced. It must be exhausted prior to the labor trial, except for some exceptional conflicts. It cannot last longer than 45 calendar days.
• The judicial phase of the ordinary labor procedure is modified.
• The employer's defense of denying the employment relationship outright does not reverse the burden of proof on the worker. The employer's defense of denying dismissal and offering the job does not exempt him from proving his saying.
• It will not be possible to dismiss pregnant workers from the IMSS who say they are dismissed for this reason (after verifying their condition).
• The possibility of receiving notifications by electronic mailbox is introduced.

Deadlines.

• The reform took effect on May 2, 2019. However, its execution will be carried out by a temporary body called the “Coordination Council for the Implementation of the Reform of the Labor Justice System”.
• For registry purposes, the CFCRL will begin functions within 2 years after the reform, “taking into account budgetary possibilities”.
• As a conciliatory body, the CFCRL and the Federal Courts will begin functions within 4 years after the reform.
• The local conciliatory authorities and the local courts will begin their functions within 3 years after the reform.
• Matters that were initiated before the Conciliation and Arbitration Boards (Federal or Local) and before the Secretariat of Labor and Social Security will be concluded before them, in accordance with the legal provisions in force at the time of their initiation.

Several issues remained pending on the legislative agenda, such as the regulation of “outsourcing”, the distribution of evidence in court and the obligation to register domestic workers before the mandatory IMSS regime.

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