Mexico: Collective agreements at risk of extinction

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Collective bargaining looks set to disappear in Mexico with the approval of the labour reform proposed at the beginning of the month by President Felipe Calderón. Labour experts fear that the initiative could push down wages, undermine job stability and facilitate cheap and easy hiring and firing.

Calderón sent the bill to Congress with the declared aim of tackling the need to create more employment and improve business productivity:

"With this labour reform initiative, we are tackling the imperative need to modernise our labour legislation, an issue that has been the subject of public debate for the last 15 years."

There are, however, doubts as to the government’s real intentions. For Héctor Barba García, legal advisor at the Unión Nacional de Trabajadores (UNT), hidden behind the idea of modernisation is an attempt to make employment more precarious and cut costs for companies.

"Jobs are not generated by decree. They require resolute support for the purchasing power of workers and consumers. We believe that if the government’s vision triumphs, if any jobs are in fact generated, they will be more precarious," said the UNT legal advisor in an interview for Equal Times.

The initiative to stimulate job creation includes proposals to legalise the various forms of subcontracting, currently forbidden by law, and allow hiring by the hour. Critics warn that this is a way of shifting responsibilities from the employer to the subcontractor, thus eliminating rights to benefits and job stability.

"The initiative will deliver a final blow to collective bargaining rights in a country where collective bargaining is already an endangered phenomenon. The vast majority of the agreements in place are protection contracts, that is to say, they involve no worker representation and are signed by phantom unions," says Barba García.

Companies setting up operations in Mexico often sign "protection contracts" with a bogus union to stop employees from joining the organisation of their own choosing.

This system is endorsed by the authorities and prevents the formation of independent trade unions. The term "protection" is used in reference to the practice of businesses paying gangsters protection money to avoid any problems.

Nine out of every ten unions registered in Mexico are estimated to be "protection unions". Their presence is particularly strong in the auto industry, supermarket chains, cleaning services, low cost airlines and EPZs or maquilas.

For Arturo Alcalde Justiniani, a lawyer specialising in trade union affairs, the reform aims to shore up these sham contracts by imposing new requirements on workers wanting to switch trade union affiliation. Workers attempting to get out of a protection contract will need authorisation from the government, the employer and the phantom union itself.

"Under the reform, workers opposing a protection contract will have to send a list of their signatures and personal details to the Conciliation and Arbitration Board and hope that it will look favourably on their request for certification.

When reference is made to authority, it relates, in the case of the Conciliation and Arbitration Boards, to the representative of the company itself, the government and the hegemonic trade union controlling the area," said Alcalde in an article for the Mexican daily La Jornada.

This week, the International Labour Organisation (ILO) warned that weakening collective bargaining agreements can undermine recovery from the economic crisis.

As underlined by the ILO’s senior industrial and employment relations specialist, Susan Hayter:

"Far from dragging businesses down and reducing productivity, there is considerable evidence that collective bargaining agreements actually reduce wage inequality and can contribute to productivity and competitiveness."

Still, the government’s proposed reform does not contemplate ratifying ILO Convention 98 on the right to organise and collective bargaining. Mexico is the only country in the Latin American and Caribbean region not to have ratified it.

In its latest survey of trade union rights violations, the International Trade Union Confederation (ITUC) reports that in Mexico, "employers, backed by the government, relentlessly devise and perfect mechanisms to suppress trade union rights".

"The aim of these widespread violations is to stop workers from organising and to crush or weaken their unions. The result is the proliferation of ’protection contracts’, repression, threats, and the hiring of thugs to attack organised workers," concludes the survey.

This article has been translated from Spanish.