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Mexican labor relations

Mexican Labor Relations

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The statutory framework that governs Mexican labor relations in accord with Article 123 of the Mexican Constitution is found in the Mexican Federal Labor Law (Ley Federal de Trabajo) and the Mexican Social Security Law (Ley de Seguro Social).

The Federal Labor Law of Mexico

Mexican labor relations are governed by its Federal Labor Law.  The statute defines the rules and regulations related to the role of labor unions, function of labor courts, and conditions under which individuals are employed. The laws and rules and regulations also include a listing of minimum wages that are paid for different types of employment in the country’s various economic regions.

“At will” employment does not exist in Mexico.  In order to terminate a worker, the company for which an individual labors must have “just cause” for doing so.  The right to go to labor court exists for employees that feel that they have been terminated without cause.   As a result of labor court proceedings an individual may be reinstated to his or her former job or may receive monetary compensation.

Among the causes that are deemed “just” according to Mexican labor relations are:

  • Depletion of the resource in an extractive industry;
  • Company bankruptcy;
  • Worker mental or physical disability;
  • Mutual consent between company officials and worker;
  • Death of the worker or the employer;
  • Completion of contractually defined work.

Also, Mexico’s Federal Labor Law spells offers other safeguards that are not enjoyed by US workers.  These include specific directives related to:

  • Profit sharing;
  • Collective (Union) securities;
  • Severance pay;
  • Vacation premiums.

It is stipulated that, according to Mexican labor relations, work contracts be in writing, and are established with collectives (unions) and/or individual workers. The types of labor contracts that are entered into in Mexico include:

  • Seasonal employment -This type of contract is used in situations in which work is discontinuous, or when the required services are for a specifically defined period and duration.
  • Measurable contracts –This type of contract is used to govern labor relations in Mexico for individuals that a hired for a specific period, or who are hired to deliver certain finite services.
  • Indefinite-term contracts – Indefinite term agreements are the most common type of contracts in Mexico. They must be implemented when an individual is going to work for an employer for a period of more than 180 days.  These contracts can be preceded by a month-long training contract.  Unless otherwise stated it is presumed that an employee that works for a month for an employer is presumed to be a permanent employee of the company in Mexico.  It is also important to remember that the training period agreement can be extended for up to 180 days.
  • Training/trial period contracts -This class of agreement is used when contracting a worker for an initial training period. Under such an agreement, a worker gives his or her consent to be given an opportunity to acquire the skills that would lead to subsequent full-time employment.  Under Mexican labor relations, training contracts can last up to a period of thirty days.

Mexican Labor Relations Include Mandates

Mexican labor relations also mandate that one day of rest weekly be provided to employees.  Most of the time, this day is Sunday.  If a worker reports for duty on Sunday, however, he or she receives a premium of 25% of the day’s regular salary.  In Mexico, the work week is 48 hours, but employees are paid for fifty-six.  This includes payment for unworked hours on Sunday.

Mexican labor relations as spelled out in the Federal Labor Law include provisions related to employee vacations.  Under the law, each worker is entitled to:

  • An additional two days annually for every year of service until the end of the workers fourth year with the employer;
  • Six days of paid vacation after one year of work;
  • A bonus of twenty-five percent of weekly salary;
  • Two days of paid vacation for every additional five years with a company.

Companies are also required to provide Christmas bonuses to their employees, under the rules that govern Mexican labor relations.  Additional, “special” bonuses are also paid.  Among them are extra pay for perfect attendance, productivity, and punctuality.

The Ley de Seguro Social, or Social Security Law, also governs Mexican labor relations.   IMMS,  Mexico’s Social Security Institute is the largest government social security organization in Latin America.  It was founded in 1943 and is divided into five units that deliver benefits and services to Mexican workers.  Among them are benefits related to:

  • disability and life insurance;
  • employment related risk;
  • illness and maternity;
  • unemployment;
  • retirement

For additional information on labor relations and such legal issues in Mexico the reader is encouraged to view our blog at http://tecma.com and review Tecma’s Shelter Services that discuss specifics of how companies foreign to Mexico are operating factories successfully in Mexico.

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