MEXICAN FEDERAL LABOR LAW
I. LABOR RELATIONS:
Labor matters in the entire Mexican Republic are regulated by the Federal Labor Law (hereinafter FLL).
In general terms, the FLL establishes minimun rights and obligations for employees and employers. Consequently, the parties to a labor relation may agree on better working condition or on additional benefits to an employee, in the understanding that any agreement that may imply a waiver or rights granted by the FLL to the employee, has no legal effects.
Furthermore, it is important to point out that binding obligations are
established in labor matter not only by an express agreement between the
parties, but are also established by means of customs.
B) DEFINITION AND DURATION OF LABOR RELATIONS:
For all legal effects, a labor relation exists when a physical person
renders a personal service under the authority of another person on entity,
in return for a salary. Although labor agreements are to be entered into
writting, a labor contract exists when the above stated elements are found
in a relationship, an non-compliance with the requirement of being in writting
shall only bring about an administrative sanction to the employer.
Concerning the duration of labor relations, as a general rule, they exist for an indefinite period of time, and they may only be suspended, rescinded or terminated under the circumstance and conditions provided by the FLL. Only exceptionally and under circumstances where the nature of the work so requires may labor contracts exist for a fixes period of time or for a specific job.
C) SUSPENSION OF LABOR RELATIONS:
Labor relations may be temporally suspended when any of the circumstances
established in article 42 of the FLL for individual cases, or article 427
of the FLL for collective suspensions exists.
Taking into consideration that in order to suspend the labor relation in the manner established in the FLL, means a prior legal procedure which may be time consuming, the most practical solution to suspend a labor relations is by the agreement to that effect between the employer and the employee. A suspension by agreement between the parties may mean a complete stop of activities, during which time the employer shall pay an agreed percentage of the employee’s salary, or may be a temporary reduction of working hours with pay of only such worked time plus an agreed amount.
D) RESCISSION OF A LABOR RELATION:
An employer can rescind a labor contract entered with an employee, only
when exists a legal cause to do so, an for that purpose, article 47 of
the FLL establishes the hypothesis whereby an employer can rescind, without
any liability, a labor contract.
In case the rescission of a labor contract is not legally justified, the employer may be compelled to reinstate the employee in the post he occupied, or pay an indemnification equivalent to three months salary, at the employee’s election, and in both cases, the employer shall be liable for the payment of the back salaries from the time the labor contract was rescinded, until the day actual payment is made.
Obviously, when the labor contract is rescinded with legal cause, there is no liability on part of the employer. In such cases, the employer shall only pay the following benefits:
E) TERMINATION OF THE LABOR RELATIONS:
The labor relations may be finished by any of the hypothesis indicated
in the article 53 of the FLL. Needless to say, the most common cause of
termination is the agreement between the parties.
II. WORKING CONDITIONS AND FRINGE BENEFITS:
Briefly, I would like to point out only the main aspects of the working conditions and fringe benefits established in the FLL.
A) WORKING HOURS: The maximun duration of the working hours shall be eight hours for the day shift, seven hours for the night and seven and a half hours for the mixed shift. Nevertheless, it is possible that the working hours be distributed, within a working week, in order to allow the worker to enjoy more than one day of rest. For example, in day shifts the weekly working hours, that is 48, may be scheduled within five days in order to allow the employee to enjoy one extra day of rest.
B) DAYS OF REST: For every six days of work, an employee has the right to enjoy one paid day of rest. In case employee renders services on Sundays, he is entitled to an extra bonus equivalent to 25% of that day’s pay besides his weekly resting day.
C) HOLIDAYS: There are eight compulsory holidays during a year, plus the first of december of every six years, when in such a day a new President of Mexico takes office. (See article 74 of the FLL).
D) VACATIONS: An employee is entitled to six days of vacation for the first complete year of services. After that period, his vacations are established in accordance to his seniority, in terms of article 76 of the FLL. During the vacation period, the employees are entitled to receive an additional equivalent to 25% of their corresponding salaries during such time.
E) SALARY: An employee is entitled to receive at least, the minimun salary, which officialy is fixed on a yearly basis. For skilled workers, there are also fixed minimun salaries, which vary depending on the activities that an employee performs. Salaries, for employee engaged in mensual work, shall be paid in periods not exceeding one week, and for other workers, in periods not exceeding 15 days.
F) EMPLOYEE’S PROFIT SHARING: The employees have the right to participate in the profits earned by the employer. The amount to be distributed among the employees has been fixed in 10% of the gross profit of the company (before the payment of taxes).
G) HOUSING PROGRAM: An employer has the obligation to contribute to the FEDERAL HOUSING PROGRAM FUND an amount equivalent to 5% of the employees salaries.
H) TRAINING PROGRAMS: An employer has also the obligation to establish a training program for its employees, which shall be previously approved by the Federal Labor Authorities.
I) SENIORITY RIGHTS: An employee shall have the right to receive twelve days of pay for every year of services rendered. The amount to be paid shall be based on the employees salary at the time payment, but such bases may not exceded two times the general minimum daily salary.
This seniority bonus is paid, in case of voluntary termintaion, when an employee has 15 years of service, and in any other case of conclusion of the labor relation it is paid irrespective of the employee’s years of service. In any case, the seniority bonus is paid at the time rescission or termination of the labor contract.
J) CHRISTMAS BONUS.- Employees have the right ro receive, before the 20th day of December of each year, an amount equivalent to 15 days pay as a Christmas bonus.
K) SOCIAL SECURITY.- Any person subject
to a labor relation, is obliged to be affiliated to the Social Security.
Contributions to such Institution are made both by the employer and the
employee, except when an employee’s salary is minimum wage, in which case,
the employer pays the total contributions. The amount of such contribution
varies depending on the activities performed by the employer, the degree
of risk in such activities and the amount of salaries paid to an employee.
III. COLLECTIVE WORKING RELATIONS:
A) UNION: Unions may be organized both for employers and for
employees, being the most common situation that of an employee union. It
is not compulsory to have a union within a company, but that situation
may be forced upon a company whenever the majority of employees so request.
When this happens a union contract is entered into with the employer, whereby
the working conditions and worker’s fringe benefits, are regulated for
a given company or establishment.
Unions in Mexico, and specially in the Queretaro area, are not as aggresive and demanding as for labor unions in the United States.
B) STRIKES: A labor union whose members are employed by a company, may file a petition to strike, and consequently, any and all activities of the company may be suspended until the conflict is resolved. A petition to strike is filed before the Labor Board, and shall be notified to the employer at least 6 days prior to the suspension of activities. A strike needs to have any of the objectives stated in article 450 of the FLL.
C. INTERNAL WORKING REGULATIONS: It is suggested that any company, wheter or not a union is involved, to have a document called Internal
Working Regulations (Shop Rules). Such document shall contain the requeriments established by article 423 of the FLL, being the most important, for practical purposes, the disciplinary measures for employees.
IV. LABOR AUTHORITIES:
Although the FLL applies throughout the Mexican territory, the labor
authorities that apply such law are Federal and State Authorities, depending
on the legal regulations to be enforced and also depending on the type
of activities carried through by the employer.
Consequently, first of all, we have both Federal and State Labor Boards, which are entrusted with the solution to conflicts arising between an employer and its employees, both individual and collective conflicts.
In addition, there are Federal and State Labor Authorities with administrative functions, mainly entrusted with the supervision and application of the FLL regulations.
It is interesting to point out that Labor Boards, are composed by an
employee representative, by an employer representative and by a governament
representative, the latter being always the President of the Board. These
representatives vote on the resolution of the conflicts and litigations
presented before them, and the judgement can be rendered on a majority