Economic Integration, Labor Law and Social Security in the Americas

Viña del Mar, Chile, April 14 & 15, 1998



The North American Agreement on Labor Cooperation (NAALC) and some of the characteristics of labor legislation in the signatory countries of the North American Free Trade Agreement (NAFTA)

Leoncio Lara Sáenz

Commission for Labor Cooperation, Dallas, Texas




1.- Background


On September 14, 1993, the "North American Agreement on Labor Cooperation" (NAALC) was signed in Mexico City, Ottawa and Washington D.C., by the governments of the United Mexican States, Canada and the United States of America, as one of two Parallel Agreements, the other covers ecological matters, to the North American Free Trade Agreement (NAFTA). This Agreement is designed to complement said international instrument as regards the promotion and enhancement of labor conditions and the standards of living in each of the three countries.


2.- Objectives


Simultaneously implemented with the NAFTA on January 1, 1994, the NAALC embodies the basic necessities expressed by the Parties during prior negotiations with regard to the promotion and observance of fair and open competition based on innovation and the elevation of productivity levels. Likewise, this instrument highlights the importance of labor laws and principles, and places special emphasis on the assurance of internal compliance by each of the countries.


It is important to point out that the Preamble to the NAALC underlines the determinations established in the NAFTA by the three countries. Not only does it advocate the creation of a more open and secure market for the goods and services produced in the territories of the member states, together with the stimulation of the competitiveness of their companies within global markets, but it also upholds the creation of new employment opportunities and the improvement of employment standards and standards of living. Likewise, this document establishes the premise of protecting, broadening and ensuring the effectiveness of basic workers’ rights.


3.- Commitments


The general objectives of the NAALC are essentially focused upon the improvement of living standards in each country; the utmost promotion of the labor principles convened by the Parties; the stimulation of cooperation, the exchange of information and the subsequent publication of the latter. The foregoing measures will allow the reciprocal and favorable comprehension of the laws and institutions governing labor issues in each country, while also permitting the performance of labor cooperation activities in line with the notion of mutual benefit. Among its many different objectives, those related to enhancing the observance and effective application of current labor legislation in each country and the transparency of public labor administration, are especially important.


The Agreement has placed special emphasis on ensuring the internal compliance of each country with its respective labor legislation. The NAALC was based on the principal of "the national application of national law, as opposed to a body of common social norms for the three countries. This principle is such that article 1 of the Agreement recognizes "the right of each Party to establish its own domestic labor standards".


4.- The international labor organization (ILO) and the NAALC


For the following reasons and despite its somewhat modest social perspective, the North American Agreement on Labor Cooperation is nonetheless a highly innovative instrument:




In view of the fact that the countries of North America are involved at international level with the two main international labor organizations, the International Labor Organization (ILO) and the Commission for Labor Cooperation (CLC) pertaining to the North American Agreement on Labor Cooperation (NAALC), it is perhaps worth making reference to the comments made by Mr. John McKennirey, Executive Director of the Secretariat, during different public presentations with regard to the main differences between these organizations:











By using a graphical approach, we can see that the Parties of the NAALC have established a barrier against the problems and temptations that could possibly arise during the enforcement of labor laws. They therefore agreed upon the "Principles for the Enforcement of Labor Legislation" and for all such effects, have determined that none of the provisions of the Agreement may be interpreted in such a way as to permit the authorities of any of the Parties to perform activities pursuant to the enforcement of their specific labor legislation in the territory of the other Parties.   Not only does the foregoing situation confirm a basic criterion regarding the term of and respect for domestic laws, but also establishes the principle of the enforcement of national law by national authorities. In other words, the concept of sovereignty has made its presence felt as a natural barrier to the vicissitudes of commercial globalization.   Finally, we should bear in mind that the NAALC is the first international agreement of its kind to stem from a trade agreement, and as such, it offers a highly innovative way of dealing with international labor matters through the establishment of an international disciplinary structure governing the observance of and compliance with the domestic labor laws of the Parties.


5.- The NAALC labor perspective. The Eleven Labor Principles


On the basis of the foregoing elements, we will now move on to the labor principles and obligations agreed upon by the Parties in the NAALC (APPENDIX I) (Articles 2, 3, 4, 5, 6 and 7):



  1. Freedom of association and protection of the right to organize
  2. The right to bargain collectively
  3. The right to strike
  4. Prohibition of forced labor
  5. Labor protection for children and young persons
  6. Minimum employment standards
  7. The elimination of employment discrimination
  8. Equal pay for women and men in accordance with the principle of equal pay for equal work in the same establishment
  9. The prevention of occupational injuries and illnesses
  10. Compensation in cases of occupational injuries and illnesses
  11. Protection of migrant workers




The obligations undertaken by the Parties are based on the general commitment of the latter to ratify full respect for the Constitution in force in each country. Furthermore, the Parties also agree to accept the right of each to establish its own internal labor laws or standards. Likewise, the Parties agree to the right of each to adopt or modify said Laws or Regulations, on the condition that they guarantee the prevalence of the highest and most congruent labor standards consistent with the development of high quality and productivity workplaces. The Parties have of course ratified their desire to make every effort to ensure the improvement of said labor standards within the specified context.




By means of the metaphoric use of the term "package", we will now analyze the mechanisms through which the NAALC could possibly have an effect on the enforcement of labor legislation in each country.


The first obligation assumed by the Parties of the NAALC (Article 3) concerns the implementation of government measures for the effective application of labor legislation. The Parties shall thereby promote the observance of their labor legislation and its effective enforcement by means of adequate governmental measures.




The second obligation undertaken by the Parties refers to the access of private persons to legal or other proceedings (Article 4), in the understanding that in accordance with the legislation in force in each country, all persons with proven juridical interest shall have due access to administrative or judicial labor tribunals for the subsequent enforcement of the labor law of each Party.


Procedural Guarantees constitute the third obligation undertaken by the Parties (Article 5) and stipulate that administrative, judicial, quasi-judicial and labor procedures involving the enforcement of labor legislation should be fair, equitable and transparent, thereby allowing full compliance with the due process of law, the guarantee of a fair and public hearing, except in those cases where the administration of justice requires otherwise.


The foregoing measures shall be understood within the overall context of the Agreement, inasmuch as none of the Parties shall be obliged to or prevented from establishing a judicial system for the application of labor legislation outside of the general judicial system used for the laws in each country.


The fourth obligation (Article 6) undertaken by the Parties subscribing to the NAALC involves the topic of publication and refers to the assurance given by the latter as regards the timely publication of the generally-applied laws, regulations, procedures and administrative resolutions used for matters covered by the terms of the NAALC, so as to make them available to all interested persons. Should the specific legislation of each Party so require, their respective governments shall publish in advance all proposed labor measures and shall receive the timely observations of all interested persons.


Finally, the sixth obligation (Article 7) states that each of the Parties shall promote public awareness of their specific labor legislation, guaranteeing the public availability of the latter and the procedures used for its enforcement and compliance, while also ensuring the education of their respective populations with regard to such legislation.





The creation of profiles and reports on the labor legislation in force in the NAALC countries constitutes an important part of Secretariat activities. In fact, as far as labor matters are concerned, not only has the Secretariat developed a Special Study on Company Closure and Workers’ Rights, but is also about to conclude the first volume of its Comparative Study on Labor Legislation in the NAALC countries. This is an extensive work that uses a matrix-based methodology to link the NAALC labor principles to the obligations undertaken by the Parties. The first volume will deal with collective labor rights: unionization, collective bargaining and strikes. It is worth noting that a preliminary report already exists on these topics. The second volume will focus on employment standards, and the third, on occupational safety and hygiene principles.


We have made a summary of a wide variety of different topics with the aim of stimulating interest in the rest of these highly interesting social institutions. (Table 6).



The Labor Relation and Employment Stability


What is the employment stability situation prevailing within the legal systems of each country?




Mexico is governed by a social conception that protects workers and has abandoned the contractual labor relations theory. Consequently, regardless of whether they have a contract with their employers or are unionized or not, all Mexican workers are governed by the terms of the Ley Federal de Trabajo or Federal Labor Law (LFT) and are subject to the minimum employment standards set down in the Constitution and in legal ordinances. These terms even apply to individual and collective contracts; employers are obliged to respect them and trade unions are unable to reduce their scope and effect. For example, the "reasons for justifiable dismissal" set down in the LFT for the rescission of the labor relation may not be overlooked by employers and trade unions.


Conflicts arising from dismissal are resolved by Federal or State Conciliation and Arbitration Boards; such procedures are also characterized by a further element of worker protection, inasmuch as causes for dismissal must be satisfactorily proven by employers.


In Mexico, unjustified dismissal grants workers the right to choose between reinstatement or indemnization, while also obliging employers to either reinstate the worker or pay the corresponding indemnization. However, should a worker refuse reinstatement, the law demands that the employer pay a cash indemnization which is normally equivalent to three months plus twenty days salary for every year of service.




In Canada, employers are obliged to give their workers "reasonable notification" of the termination of the labor relation, or as is generally the case, pay them the amount corresponding to the termination of their contract instead of offering notification. While this is not a legal disposition, tradition dictates that this payment should generally consist of one month’s salary for every year of service. Canadian labor tribunals have generally ruled that the lack of notification or payment amounts to unfair dismissal; although the tribunal invariably orders that the corresponding payment be made, it is unusual for reinstatement to be stipulated. Employers may dismiss workers without prior notification on the grounds of serious misdemeanors such as misconduct.


In view of these limitations, employers are generally free to dismiss non-unionized workers, since the latter are not protected by the principle of justified cause or by a special agreement as contained in a collective contract. The workers covered by collective contracts, 33 percent of the total labor force and 24 percent of private sector workers, may resort to arbitration and subsequently obtain back pay and reinstatement.


Together with the provinces Quebec and Nova Scotia, Federal jurisdiction has adopted statutory laws to protect non-unionized workers from unfair dismissal. In Nova Scotia, the reparation of damages consists of reinstatement and the corresponding liquidation of all back pay. However, the Federal and Quebec jurisdictions state that reparations may include reinstatement, with or without compensation or other equivalent reparations. Throughout Canada, the prohibition of all forms of discrimination set down in statutory laws, has subsequently been extended to include dismissed workers. All of these factors have led to the suspension of the voluntarist "Common Law" labor contract doctrine present in Canadian Labor Law.


United States


Labor relations in the United States are of a contractual nature and are therefore maintained and governed by the freedom of the parties to establish employment standards and terminate contracts. The traditional notion of contractual doctrine allows employers to dismiss workers for "good reasons, unjustified reasons or without justification". Likewise, the termination of employment does not require any prior notification or indemnization.


This doctrine prevails in the United States for the majority of workers involved in the private sector, where collective contracts containing clauses pursuant to justified dismissal with the option of arbitration cover 12 percent of workers. Meanwhile, public sector employees are invariably subject to the protective provisions of the civil service. Nevertheless, aside from the specific agreements related to this issue contained in collective contracts, in certain cases the notion of freedom in labor relations has been limited by judicial ruling. Many labor analysts foresee the decline of consensus theory as new rulings are issued by tribunals or new legislation is subsequently adopted.


Of the 50 states in the American Union, only Montana, a rural state with little industrial development, has established a Statute for private sector workers providing for the development of a justified dismissal recourse system.


2.- What are the basic labor rights protected by the Constitution or fundamental laws in each country?




The Mexican Constitution expressly guarantees the freedom of association, the right to worker and employer unionization and the right to strike. Likewise, it also provides for a series of minimum labor standards that have become unrenounceable workers’ rights. These include minimum wages, working hours, overtime payments, rest days, vacations and holidays, under-age labor, occupational safety and health, dismissal recourses, the principle of equal salaries for equal work, seniority, as well as other rights which may not be in any way reduced or altered in the case of individual labor, or by employers or trade unions during collective bargaining.




The Canadian Constitution does not contain any express provisions regarding labor rights or minimum labor standards. However, it does provide for and guarantee the rights of general freedom of association, freedom of expression and the right to pacific assembly. These provisions are set down in Section 2 (d) of the so-called Canadian "Charter of Rights and Freedoms".


The Supreme Court of Canada has expressly ruled that the constitutional guarantee of freedom of association protects the right of workers to organize, but does not include the right to collective bargaining or the right to strike. Both the Federal Government and its provincial counterparts have specific faculties derived from the Constitution to allow them to legislate on such matters.


United States


As in the case of Canada, the Constitution of the United States does not expressly establish labor rights or standards. Nonetheless, the interpretation of the "First Constitutional Amendment" deals with the protection of the freedom of assembly, expression and petition, and has subsequently extended a considerable number of these rights to many of the aspects of workers’ rights, such as the organization of pickets, leafleting, boycotts and political participation.


Furthermore, Article 6 of the constitutional "Commerce Clause" empowers the Federal Congress to "regulate the trade between various States", a fact that has allowed Congress to issue laws pursuant to matters of union organization, collective bargaining and strikes.

3.- Labor Jurisdiction.


Which government level - Federal, State or Provincial - is responsible for ensuring compliance with and the enforcement of labor laws in the three countries?




Mexico has a sole Federal Labor Law (LFT), issued by the Congress of the Union, and which is enforced in all 33 national jurisdictions and shared between the 31 states and the Federal District (situated in Mexico City) and the Federation or Federal Government. The latter has exceptional jurisdiction over industrial branches and services of national scope, as well as certain federal matters such as training and other aspects like occupational hygiene and safety, which are subsequently shared with the States. In Mexico, more than 30 percent of the labor force is unionized; approximately 25 percent of workers come under federal jurisdiction, half of whom are also unionized.


One example of the importance of companies subject to state jurisdiction is the in-bond sector. There are some 2,300 in-bond companies in Mexico, employing more than 700,000 workers. Almost 1,800 of these business concerns, with more than 600,000 workers, come under State jurisdiction and are primarily situated along the border with the United States.


The Labor Authorities empowered with enforcing and ensuring compliance with Labor laws are: at federal level, the Secretaría del Trabajo y Previsión Social (Secretariat of Labor and Social Prevision - STPyS), presided over by a Labor Secretary appointed by the President of the Republic. The STPyS has 49 Federal Labor Delegations throughout the country, together with different tripartite National Commissions such as the Minimum Salary Commission, the Workers’ Profit Sharing Commission (formed every ten years); the Instituto del Fondo Nacional para la Vivienda de los Trabajadores (The National Workers Housing Fund Institute - INFONAVIT) and the Instituto Mexicano del Seguro Social (The Mexican Social Security Institute - IMSS). In the States and the Federal District there are 32 Labor Departments or Secretariats, one for each federal entity.




Canada has eleven different labor legislation systems; one for the federal sector and the two territories, and one for each of the ten provinces. Even though the Federation and the Provinces share common labor principles, the latter enjoy virtually total sovereignty as regards labor legislation. Although essentially similar, this legislation does have special characteristics in each of the provinces.


In accordance with its Constitution, the Canadian Federal Government has jurisdiction over industrial or service branches of a national or international nature. Approximately 10 percent of the labor force is subject to federal jurisdiction, while the remaining 90 percent of Canadian workers are governed by provincial or territorial labor laws. It is also worth noting that more than two thirds of these workers are subject to the legislation prevailing in three provinces: Ontario, Quebec and British Columbia.


Almost all the Canadian provinces have a tripartite Administrative Labor Board, a public office made up of representatives from the worker, employer and provincial government sectors. The only exceptions to this rule are Nova Scotia and Alberta, where local laws have not actually provided for a tripartite system, but where labor-related matters have nonetheless been traditionally dealt with in a similar manner. The Federal Government has a neutral board consisting of publicly-appointed officials with no labor or capital affiliation. These Labor Relations Boards are generally independent administrative offices and do not form part of either the Federal or Provincial Labor Secretariats. Instead of using a Labor Administration Board for the enforcement of labor legislation, the province of Quebec has the General Labor Commissary’s Office which depends on Labour Ministry, as well as the Labour Tribunal forming part of the Government Judicial Branch.


United States


The United States has three laws for regulating the rights of organization, collective bargaining and strikes throughout the entire country: the National Labor Relations Act (Wagner Act), the Management Relations Act (Taft-Hartley Act) and the Labor Management Reporting and Disclosure Act (Landrum-Griffin Act).


The National Labor Relations Board (NLRB) is the main organization engaged in worker-employer relations. The Department of Labor (DOL) handles the enforcement of other important features of worker-employer relations, above all those related to internal trade union activities (Union Democracy), the financial and accounting activities of these organizations, and other national-level duties.


The NLRB is an independent office consisting of five neutral members appointed for a five-year term. The Board also comprises an independent General Councilor who is appointed for a four-year term. Both the members of the Board and the Councilor are directly appointed by the President and duly ratified by the Senate; an unwritten yet traditional practice states that not more than three members of the Board should belong to the same political party. The Department of Labor forms part of the Cabinet of the President of the United States and is presided over by a Labor Secretary.



This principle involves the right of workers to freely develop their organizations without hindrance and join these organizations of their own free will, with the aim of promoting and defending their interests.


The first and most important of all the labor principles is the freedom of association, which in labor terms implies the right to assembly as a means of collectively defending common interests and even extends to the right to form a trade union. These basic topics are present in constitutional provisions, the different jurisdictional systems and the measures applied to protect these rights in the three signatory countries of the NAALC.

1.- Protection of the Right to Organize.


In what way do the countries act in order to protect the right of workers to form trade unions?


The protection of the right to form and organize trade unions, undertaken by the three countries, requires that positive action be taken by the State in order to maintain and promote this right over and above the constitutional guarantee of free association. Likewise, defense mechanisms are also required for workers whose rights are not respected, or who have been subject to reprisals or coercion for having exercised their rights. A series of sanctions have of course been established and enforced for those transgressing these rights.


The right to association is a basic human right universally recognized by all International Human Rights Instruments. The three members of the Agreement have established laws prohibiting discriminatory and anti-union practices; regulations have of course been established to sanction those persons violating such rules and measures. Topics related to the efficiency of laws and recourses established for these purposes are subject to constant debate by the signatory countries of the NAALC.




The Mexican Constitution establishes the responsibility of employers in the unfair dismissal of workers and includes the case of dismissal caused by worker affiliation to a trade union or by participation in strike activities. Furthermore in 1950, Mexico ratified Agreement 87 of the International Labor Organization concerning the right of association and the freedom to organize trade unions. In accordance with the Mexican Constitution, after having been duly ratified by the Senate, this Agreement became part of applicable Mexican labor legislation. In Mexico, workers may initiate proceedings on the basis of unfair dismissal motivated by the organization of a trade union, and therefore have the right to sue their employer before the Junta de Conciliación y Arbitraje (Board of Conciliation and Arbitration - JC y A), requesting that the latter order their reinstatement or a cash indemnization payment equivalent to three months’ salary plus twenty days for every year of service, together with the payment of all corresponding benefits.


The LFT also protects the right of workers to organize, since it specifies that the process of trade union organization shall include all workers whose labor relation has been terminated within a period of thirty days prior to the date on which the trade union registration application is submitted, and thirty days after registration is accepted by the labor authorities: the STPyS at federal level and the JC y A at local level.


Consequently, the dismissal of workers on the grounds of having attempted to join a trade union is therefore both illegal and unjustified and obliges the employer to duly compensate the affected workers by means of the legally stipulated, constitutional payment.




In Canada, Federal and Provincial labor law has created protective measures for workers against dismissal inspired by "discriminatory labor practices". Under the terms of these measures, unfair dismissal is considered illegal and allows workers to sue employers for having utilized discriminatory and unfair practices.


Workers and trade unions may sue employers on the grounds of dismissal caused by union activity, or as a result of unfair labor practices, and aside from reinstatement, may also obtain the salary accrued by the worker as of the moment of dismissal. The Provincial Labor Relations Boards and the General Commissioner or the Quebec Labor Tribunal are empowered to order reinstatement and corresponding salary payments.


United States


The Wagner Act was passed In the United States in 1935, as a means of establishing the legal guidelines for the so-called "Unfair Labor Practices"; this initiative later served as the basis for the corresponding Canadian system. Known as "ULPs" by American labor lawyers, this legislation includes provisions focusing on "discrimination" caused by "concerted activities" such as trade union organization. Workers dismissed or sanctioned as a result of acts of concertation, requests for help or mutual protection including, yet not necessarily requiring measures against unionization, may sue before the National Labor Relations Board, which in turn, will begin proceedings against the employer.


In Canada as in the United States, workers or trade unions may accuse employers of unfair dismissal before the NLRB and demand reinstatement and the liquidation of back pay. Proceedings may then be initiated on the basis of such accusations before an Administrative Law Judge, whose decisions may be sent for appeal before the National Labor Relations Board.


The rulings of the NLRB are regularly and systematically submitted for review by the Federal Courts. The complete legal proceedings may often go on for months or even years, a fact that has led to a considerable degree of criticism since as the rights of trade union organization are invariably adversely affected. Despite the doctrine of deference based on specialized competence employed by the NLRB, its rulings in cases of unfair labor practice are frequently reconsidered by the Courts and often overturned.

2.- Observations on the Exclusivity of Trade Union Representation and Voting Procedures


It should be noted that in the three signatory countries of the NAALC, registration and certification procedures are not related to the principle of free association or with the right to organize. They are consequently not prerequisites for workers wishing to form a trade union, but are rather mechanisms to allow trade unions to obtain a degree of legal capacity to enable them to lawfully uphold the exclusive representation of their workers during negotiations and the concertation of collective contracts with employers.


In all three countries, registration and certification give trade unions exclusivity for collective bargaining with a given employer in what has been termed as the "negotiation unit". This principle of exclusive representation clearly contrasts with the notion of "plural representation" practiced in other countries, and as a result of which, various trade unions may exist and take part in the same negotiation unit. Even though the three countries maintain this exclusivity principle, in accordance with the legal provisions in force in each country, they still allow other trade unions representing worker majorities to express their opposition to the exclusivity of representation. The latter may therefore demand to be considered as holders of collective contract representation or that new elections be held.


In Mexico it should be remembered that a union may be formed with a minimum of twenty workers. Consequently, when two or more trade unions contest this representative faculty, or exclusive rights over the administration of a collective contract, by alleging that one of them represents the majority of the workers concerned, the conflict is resolved by means of special proceedings carried out before the JC y A. The Board certifies the majority representation of one of the unions by means of a "re-count", or a worker vote held at a session of the general union assembly; this act is duly certified by the JC y A, often in the presence of the employer.


In Canada and the United States, certification procedures are generally carried out by means of a secret worker vote which is invariably held at the workplace. These elections may be held for the certification of a new trade union as exclusive representative of the collective contract, or in order to determine which of the two unions holds majority representation.



The right to form a trade union would be of very little value without the capability to bargain collectively with the employer. Negotiation implies the legal recognition of a trade union (by means of registration or certification by the competent authorities), the capacity to negotiate and the possibility of organization continuity, and of course the obligation of the employer to negotiate with the union. Other important features of this topic are related to the role played by government labor authorities in the collective bargaining process and in the enforcement and extension of collective contracts.


1.- The Obligation to Bargain Collectively.


The topic of the right to collective bargaining necessarily means considering the type of relationship existing between the employer and workers. Since there are different ways of protecting this right, the societies and countries subscribing to the NAALC have selected a variety of mechanisms for such purposes in accordance with their specific history, economic system and culture of employer-worker relations.


In Mexico, while the Federal Labor Law provides for the freedom of collective bargaining, it also determines the right of trade unions to strike in the event of employers refusing to bargain collectively; this process therefore becomes a de facto induction rather than a legal obligation.


Canada and the United States have rules that oblige employers to negotiate in good faith with the trade unions representing the majority of their workers; this rule is applied regardless of whether employers voluntarily accept collective bargaining or not.




Mexican Labor Law does not establish collective bargaining as an employer obligation. Collective Contracts (CC) may only be negotiated with trade unions and in the event of employers refusing to negotiate with their union, the latter has the right to call for strike action in order to ensure the concertation of the contract. The Mexican system therefore consists of inducing the conditions for collective bargaining as opposed to making this practice a legal obligation, a fact that would clearly breach the guarantees of freedom and equality set down in the Constitution. When strike action is called for, the employer must appear before the JC y A, with the aim of implementing a conciliation mechanism to aid the concertation of the collective contract and the subsequent withdrawal of the strike threat.


The CC have a duration of four years; the parties may review them on a yearly basis so as to set new salary levels, and a complete review of all their clauses is performed every two years. The provisions of the CC are applied all company workers, regardless of whether they are members of the titular trade union or not.




In Canada, employers are "obliged to negotiate in good faith" with certified trade unions so as to formulate collective contracts. An employer’s opposition to concerting a collective contract implies the use of an unfair labor practice termed as "the refusal to negotiate", thereby making all such refusals illegal. Arbitration has been established in most of the Provinces and in the Federal sector to allow for the development of an initial collective contract in those cases in which a new trade union is incapable of coming to a collective bargaining agreement with the employer. The incidence of this kind of solution is greater in Canada than in the United States.


Access to the foregoing arbitration usually requires discretionary investigation by the corresponding Labor Relations Board or the Commissioner’s Office, since one of the parties has clearly failed in its attempt to negotiate a contract. The Provinces of Alberta, New Brunswick and Nova Scotia do not have special provisions for dealing with conflicts arising from the concertation of initial collective contracts.


United States


In the United States and in accordance with existing labor laws, employers are also obliged to negotiate in good faith. The Wagner Act defines the "refusal to negotiate" as an unfair labor practice. While in 1947, the Taft-Hartley Act established a similar concept of unfair labor practice, in this case it refers to the possibility of a trade union refusing to negotiate in good faith with an employer.


In both the United States and Canada, the principle of good faith protects the parties against "apparent negotiations", or in other words, against the simulation of negotiations which have no intention of leading to the concertation of a contract. In both countries, this situation constitutes an unfair labor practice (actually proving such a situation poses a real challenge for litigants). The requirements established for negotiating in good faith include prohibiting the employer from negotiating directly with the workers, from making a unilateral change in labor terms and conditions, or engaging in any violation of the right to negotiation.



3.- Conciliation, Mediation and Arbitration in Collective Bargaining.


To what extent may labor authorities intervene in collective bargaining processes in order to provide orientation or decide on their outcome?


The signatory countries of the Agreement act within a wide band of policies and actions which range from leaving negotiation to the free play of economic forces and the specific power of the contractual parties, to intervening with the aim of mediating or determining the development of negotiations.


The selection of mechanisms concerning the manner in which the freedom to negotiate should be offset by social and economic policies and objectives, is indeed difficult due to the different perspectives held by the Governments, the parties involved in the contracts and society as a whole. Consequently, each of the three countries has different systems for handling such matters.




In Mexico, labor authorities attempt to reconcile the interests of the parties. When so requested by the parties, they offer their mediation services in conflicts stemming from collective contracts. In all labor proceedings submitted before the JC y A,, including those related to collective bargaining, the Tribunal is obliged to seek the conciliation of the parties. Arbitration by the JC y A is generally not obligatory, except in certain situations and when specifically requested by the workers; in this case, employers are necessarily bound by its rulings.


The "General Coordination of Conciliation Officials" pertaining to the STyPS has historically played an important role in the mediation and conciliation of collective contracts and in the relationship between contracts and federal law.




Government mediation and conciliation are customary within the overall context of collective bargaining. Mediation and conciliation are obligatory prerequisites for strikes taking place under the terms of laws set down by the Federal Government and in most of the Provinces. Important exceptions to this rule are Quebec and British Columbia, where although such a situation is not obligatory, trade unions, employers or the Ministry of Labour may freely request mediation and conciliation before strike action is initiated.


In Canada, mediation takes on different forms which include "helping the parties come to an agreement"; the use of delegations to find data or proposals, Ministry of Labour recommendations and other procedures. In the event of private sector conflict, the parties frequently submit to compulsory arbitration; in this case a collective contract is imposed, regardless of whether it goes against the wishes of one or both parties.


As mentioned above, most of the Provinces and the Federal sector have provisions related to the obligatory nature of arbitration for the solution of conflicts arising from the negotiation of initial collective contracts by recently-certified trade unions.


United States


Government mediation and conciliation in the United States is voluntary and is only offered if expressly requested by both parties. In such cases, the parties request the intervention of a mediation official from the "Federal Mediation and Conciliation Services Office" (FMCS). The participation of this official is limited to facilitating the negotiation process by helping both parties find acceptable contractual terms.


Generally speaking, obligatory official arbitration is virtually non-existent in the private sector and within national labor laws (although contracts sometimes stipulate that the parties agree to submit all further conflicts to obligatory arbitration). This fact invariably leaves collective bargaining to the free play of the capabilities of the parties and the economic market (which as we will see below, has been considerably affected by the doctrine of strike substitutes or replacements).


3.- The Obligatory Extension and Enforcement of Collective Contracts.


Can a country establish the obligatory extension and enforcement of the terms of collective contracts, especially with regard to salaries and benefits, in all companies pertaining to given sector or economic activity?




Mexican labor law provides for the so-called Contracts-Law (CL). These are collective contracts declared obligatory by the labor authorities in specific geographical regions and for unionized workers and employers pertaining to a given activity or industry, whether Federal or State. Such contracts are imposed regardless of whether workers or employers have participated in the National Conventions summoned by the STPyS or the State Governors for the creation of a CL; the National Conventions serve as a forum for the arguments of both workers and employers.



There are currently seven CL in force in important industrial branches: cotton, wool, silk, hard fibers, rubber, radio and television. Together with its clauses, this kind of Contract is scrutinized and established with great care during times of economic difficulty, since compliance with its general provisions invariably becomes difficult for every company subject to its terms.




In Canada, the Federal Government sector and Provinces prohibit the application of a collective contract to parties other than those specifically subscribing it. Nevertheless, Quebec has a Decree-Law, under the terms of which a collective contract is still in force for twenty-nine branches of economic activity. The norms set down in this Decree-Law are applied in an obligatory manner to all the companies operating in the sector. Thirteen of these branches are covered throughout the province, while a further sixteen branches situated in the Montreal metropolitan area are covered on a regional basis.


These Extensive Contracts are supervised by "committees" made up of employer and worker representatives and cover more than 125,000 Quebec workers in sectors such as clothing manufacture, automobile repair, building maintenance and private security work in offices.


United States


Labor laws in the United States do not provide for the obligatory extension of the terms of a collective contract, since these instruments are only legally binding for the subscribing parties. While in practice, the salaries and social benefits negotiated by large companies and their corresponding trade unions in certain industries may serve as models for others, this is a custom and not a legal obligation.


This negotiation model characterized industrial collective contracts in the United States during the decades following the Second World War. Nonetheless, the pressure currently generated by competition has caused various industries to virtually abandon this model.



The right to strike is necessarily concomitant with the freedom of association, the right to organize and the right to bargain collectively, inasmuch as the equilibrium of its implementation expresses the essence of the systems in force in each of the signatory countries of the Agreement.


When evaluating the efficiency of strikes, it might be suggested that the topics related to the rules governing their initiation or suspension, or the decision to implement strike action during the term of a collective contract, have specific connotations in each country. The same may also be said with regard to the use of replacement workers, or the prohibition of their utilization, as the case may be.


1.- Rules for the Prevention of Strikes.


Can a country limit or prohibit workers from going on strike during the term of a collective contract?




In Mexico, strike action may be called for or even initiated as a means of bringing about the concertation or review of a collective contract, whether upon its expiration or during its term. Any contractual clause obliging workers to abstain from striking is unconstitutional. In any case, labor legislation authorizes the intervention of the JC y A in order to qualify the strike in terms of the observance of legal norms by the strikers. Likewise, this intervention is intended to help strike action to focus on the goal of "achieving a sense of equilibrium between productive factors and harmonizing labor rights with those of capital". If the tribunal decides that a given strike does not foment such a situation, the action is declared "non-existent" and workers are obliged to return to work.




In Canada, the labor legislation pertaining to the Federal and Provincial jurisdictions prohibits strikes at any time during the term of the collective contract. Strikes are legal while workers are seeking the concertation of a new or initial collective contract, or when the first agreement is due to be signed by a new trade union, or upon the expiration of a collective contract entered into with an established trade union. In view of the general prohibition of strikes during the term of collective contracts, conflicts arising once a contract is in force necessarily require arbitration for their subsequent resolution.


United States


In the United States, the pacts signed between trade unions and companies regarding the absence of strike activity, are subject to negotiation and may be incorporated into the collective contract. There is no law prohibiting or restricting strike action or stipulating obligatory arbitration for the resolution of conflicts. Nonetheless in practice, the majority of trade unions and employers give top priority to such matters in their agreements by means of a no-strike clause, and employers undertake to submit all conflicts to compulsory arbitration. Trade unions may be held responsible for damages and economic losses whenever strike action is taken in direct breach of the "no-strike" clause.


The law prohibits the so-called "secondary boycotts" or the stoppages implemented by the workers of suppliers or clients pertaining to what are known as "secondary" employers; the "primary" employer is the one whose workers are directly involved in a "primary" strike. It is illegal for a primary striking trade union to request a solidarity stoppage by a "secondary" union; likewise, the latter may not implement a stoppage in favor of the former. Furthermore, it is also illegal to induce the clients of a secondary employer to implement a boycott. Trade unions may be sued for both financial damages and for using unfair labor practices related to the use of a secondary boycott.


2.- Strike Votes.


What are the provisions of labor laws as regards the workers’ decision to implement or suspend strike activities, or accept or reject the proposals made by an employer under the terms of collective bargaining?


This topic focuses on the right of trade unions to determine their own procedures for exercising the right to strike. Some unions prefer to obtain "authorization to strike" by means of a vote staged before or during the collective bargaining process; on the basis of this vote, strike action is called for or not. Other unions prefer to wait to receive a final proposal from the employer, which is then submitted to the vote of its members. Some trade union organization even stipulate a qualified vote (generally two thirds of the workers).


The legal requirements stipulated for initiating, continuing or suspending a strike, or for formalizing a collective contract, are designed to strike a balance between trade union autonomy and social interests, so as to neutralize unfounded or arbitrary strike action. Important differences exist in the three countries as to the regulation of these delicate matters.




Mexican legislation does not establish internal strike procedures for trade unions, since the latter are regulated by their own internal Statutes. In the event of the JC y A being summoned to qualify compliance with strike requirements, the authorities may only order a re-count to ensure that the majority of the workers have in fact voted for strike action. Furthermore, the establishment of "no-strike" clauses in collective contracts is legally prohibited.





Canadian labor legislation requires that strike action be voted on before being implemented by members of the trade union; generally, all workers covered by the collective contract should cast their votes, regardless of whether they are members of the union or not. In almost all the Provinces, voting is carried out in accordance with internal trade union procedures. In Alberta, the government supervises voting activities, while in other provinces, voting proceedings are actually staged by the government. In some Provinces, employers are allowed to request that their latest proposals be set to the vote before the initiation of or during strike action.


United States


The legislation of the United States does not provide for any kind of voting procedure prior to the initiation of strike action, for the analysis of employer proposals during collective bargaining, or for strike suspension. The decision to initiate strike action lies with the trade union, in accordance with its own internal statutes. While most trade unions require the vote of their members in order to authorize the commencement of strike action or to accept the terms of a collective contract, it should be remembered that such practices should be established in their internal trade union statutes and are not in fact a legal requirement.


3.- Strike Substitutes or Replacements.


To what extent can a country prohibit or limit the use of worker replacements to maintain company operations during a strike?


Government policies regarding this issue play a very important role in the capability of employers to substitute striking workers; this is indeed a highly polemical situation that generates fierce reactions in many countries. The debate focuses on the nature of replacement workers, whether they are permanent or temporary, and of course involves the absolute or limited rights of striking workers to return to their jobs. The three signatory countries of the Agreement have provided very different historical and social solutions to this problem.




Mexican labor legislation does not allow for the permanent or temporary replacement of striking workers. In fact, if company facilities are taken over by striking workers, they necessarily become the legal responsibility of the latter. The trade union must therefore delegate "personnel" from among its members to take care of tasks involving the maintenance of equipment or raw materials at the workplace, for the duration of the strike.




Canadian labor legislation, jurisprudence and practice prohibit the permanent replacement of striking workers. The debate surrounding this topic is focused on the temporary replacement of striking workers, or in other words, the use of administrative personnel or the hiring of blackleg workers. Nonetheless, a high degree of consensus has prevailed concerning the fact that the permanent use of replacement workers constitutes a fundamental violation of the freedom of association and the right to strike.


The Provinces of Quebec, British Columbia, and more recently Ontario, prohibit the use of temporary replacements. In Quebec for example, only administrative, supervisory and managerial personnel may perform tasks related to those normally performed by striking workers. Although temporary replacements are permitted in other Provinces, these workers must be dismissed when the workers return to their jobs upon the conclusion of the strike.


United States


In the United States, employers are allowed to use permanent replacements for workers involved in so-called "economic" strikes. Such actions are implemented on the basis of salaries, working hours or conditions, or are initiated by workers with the aim of obtaining trade union recognition without having first submitted an election petition before the National Labor Relations Board (NLRB).


The replacement doctrine is based on a resolution issued by the United States Supreme Court in 1938, and which has since regulated the workers’ right to strike. Nevertheless, it should be made clear that this situation is not expressly provided for by any labor law.


In accordance with this Doctrine, striking workers replaced on a permanent basis still conserve their worker status and remain on a waiting list until their former positions become vacant, in which case they should be offered this or a similar position. Technically speaking, this situation respects the principle of non-discrimination established by the law, inasmuch as workers may not be subjected to discrimination for exercising their right to strike.


Many traditional trade unionists have criticized this position, pointing out its fictional nature and arguing that these workers are subject to de facto dismissal and are clearly discriminated against for having exercised their right to strike. Employers however, consider that the replacement doctrine reflects an adequate balance in their negotiation capabilities. This topic is subject to permanent discussion by academics and Congress.


In the United States, employers are not allowed to use permanent replacements when workers initiate strike actions on the grounds of unfair labor practices. In this case, "ULP strikers" may be temporarily replaced, but must be reinstated to the positions occupied by blackleg workers whenever they decide to end the strike and return to work.




While we would clearly require the skills and imagination of Nostradamus (now very cold and buried in the Aix-en-Provence region of France) to enable us to predict the future, we may however attempt to outline some of the trends that events and general assumptions would seem to point to. I will therefore try to wind up what has surely been a rather long and tiring exposition by mentioning just a few of these trends.




FIRST.- In times of economic crisis, economic standards and laws tend to impose themselves upon social laws. This is especially true in the case of worker-employer relations and subsequently affects the right to work. This is precisely the context in which the phenomenon of flexibility should gain ground over the derogation, change or demerit of the labor system, while constantly seeking to harmonize workers’ interests with those of capital. The NAALC is clearly situated within this framework.




SECOND.- It would seem that the phenomenon related to the liberalization of the trade of goods and services, or economic regionalization and globalization, is becoming an irreversible and inevitable feature of life in the nations of North America.




THIRD.- Within this overall framework, it will be undoubtedly necessary to define the concept of sovereignty in relation to an international economic order requiring the permanent commitment to democratization, better living conditions, productivity, compliance with internal labor legislation and the transparency of public labor administration.





FOURTH.- In an international system convened on the basis of labor cooperation, the notion of cooperation should prevail over any kind of disciplinary system.




FIFTH.- It would seem that the countries of North America must continue to reinforce the area of international cooperation, the exchange of information, the conciliatory solution of problems and mutual support, on the basis of the principles of respect for internal legislation and the sovereignty of each nation.








Leoncio Lara Sáenz

Dallas, Texas, USA, April 1998