Ending a Union Contract Could Get Mexican Companies Into Compliance, Labor Attorney Says
As trade and labor attorneys wait to see which company is the target of a promised AFL-CIO rapid response complaint, Warren Payne, a senior adviser for Mayer Brown's public policy and international trade practices, said there can be informed speculation on who might be first.
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Payne, who was speaking on a joint Mayer Brown/Chevez Ruiz Zamarripa webinar Sept. 24, said it's likely that the company would be one that's already been in the news, such as Goodyear in San Luis Potosi (see 1907260059), or companies that faced wildcat strikes in Matamoros in 2019 and 2020.
“Those companies, those sectors where there has already been a great deal of public advocacy by the U.S. labor unions and their counterparts in Mexico, I suspect would be the first place they would go,” he said, adding that there are two reasons for that hunch. One is that the unions already have a fair amount of information about what happened to workers from those plants, and, he said, “It can make sense to have the petitions build on the public relations and publicity activity they have already engaged in.”
Rafael Vallejo, a member of Chevez Ruiz Zamarripa's employment practice, said that about 70% auto, apparel and electronics factories that are tier 2 or tier 3 suppliers are not yet compliant with Mexican labor laws about freedom of association and collective bargaining. In order to get compliant, he recommended that company officials consult a questionnaire put out jointly by the U.S. Chamber of Commerce and the Mexican government. He said that after you answer 20 or so questions on the list, you'll know whether your company is in compliance.
He said officials may also want to review the collective bargaining agreement they set up with a union before workers were hired. If they're not really using the agreement, he suggested they might want to terminate it. He explained that by having a union contract with no employee input, it allowed employers to keep salaries very low. These sorts of agreements are no longer allowed under Mexican labor reforms, though the industry has several years to transition to democratic unions. But there's no requirement to have union representation at all, so ending a contract with a captive union could be one way of quickly coming into compliance.
The Mexican attorneys said that there is no informed compliance for Mexican importers under USMCA, as there is in the U.S. Jorge Sanchez, a partner in Chevez's Monterrey office, said that in fact, the Mexican SAT (Servicio de Administración Tributaria), which collects duties, is telling Mexican importers that they can no longer do post-importation claims under NAFTA, because NAFTA is no longer in force. Sanchez said that doesn't make sense, since the filings are for entries before July 1, and many companies have started litigating this government position. Sanchez said that with the state of the Mexican economy, the government is “doing as much as they can to collect as much taxes as they can.”