Mexico’s Labor Department said 85% of the country’s 140,000 officially registered labor contracts are in danger of being canceled because they failed to meet Monday’s deadline to have union members vote on them.
Under labor reforms that helped win the renewal of the U.S.-Mexico-Canada free trade agreement, starting in 2019 Mexico told unions with registered contracts they had to submit the labor pacts to secret ballot votes by workers within four years.
The small percentage of contracts meeting Monday’s deadline reflects what Mexican officials acknowledge has been the longstanding practice of labor leaders in negotiating contracts with little or no worker input to ensure wages stay low so they can keep factories in Mexico. Wages in Mexico, at roughly one-eighth or less of U.S. wages, have drawn millions of manufacturing jobs out of the United States.
Only about 20,000 contracts complied and were confirmed by votes as of May 1, 2023, the deadline for doing so. The Labor Department said the remaining 120,000 will be nullified unless those unions have scheduled votes between now and July 31. That is likely to be a tiny percentage of the contracts.
It is a double-edged sword: The purge gets rid of a lot of contracts that are on paper only but could also leave a significant chunk of Mexico’s four million unionized workers without contracts.
Anecdotal evidence suggests that larger plants and workplaces were among the most likely to have renewed their contracts, while many of the roughly 120,000 lapsed ones may be at smaller shops or businesses that have disappeared.
“As long as there is no labor contract, the company should adopt a position of neutrality, that is, to give equal treatment to all the unions that may have members at the company, and not engage in reprisals or discrimination against any employee,” the Labor Department said in a statement.
In the past, companies have been likely to favor unions that guarantee them no strikes and few wage demands.
For example, earlier this year independent union organizers at a U.S.-owned auto parts plant in central Mexico filed a labor complaint under the free trade agreement accusing the Michigan-based company of trying to keep its old union.
Eduardo Castillo, the leader of the independent “Transformation Union” at the Unique Fabricating de Mexico auto parts plant in the central state of Querétaro, said the company prevented members of the new union from entering the plant to speak with workers and harassed or fired union supporters.
The company did not respond to an email requesting comments on the dispute. Castillo’s union eventually won a vote by workers authorizing it to bargain for them.
The unions who did not hold contract votes will have to re-apply for the right to represent workers at a given plant, by winning their votes in a secret ballot.
In April, Mexican authorities acknowledged that a pro-company union actually stole a ballot box in a contract vote at another plant, a Goodyear tire facility in the northern state of San Luis Potosí.
The Labor Department vowed to re-do the elections with “exceptional” security measures “without any intervention by the union that holds the contract and with the participation of domestic and international observers.”