Workers at a General Motors Co. (GM) plant in Mexico have voted in favor of union representation. The vote was made possible by Mexico’s new labor law, which was enacted as a result of the United States-Mexico-Canada Agreement (USMCA).
This unprecedented vote sets up one of the first collective bargaining agreement (CBA) negotiations under Mexico’s reformed labor law. The negotiations likely will test Mexico’s new labor law and have significant ramifications for U.S. employers and suppliers who do business or rely on the supply chain in Mexico.
In May 2019, as required by the USMCA, Mexico enacted a labor reform bill that substantially overhauled Mexico’s labor law. Under Mexico’s new labor law, which is similar to the United States’ National Labor Relations Act, workers in Mexico are afforded greater protections and rights, including elections of unions by secret ballot, transparent negotiation and CBA approval, an independent labor adjustment board or court, and democratic election of union officers.
Prior to ratification of the USMCA and passage of Mexico’s labor reform bill, a company in Mexico could recognize a union and sign a contract with that union without any input or approval from workers. These agreements, referred to as “Protection Agreements,” often set employer-friendly contract terms and were sometimes signed before the company had hired workers at its worksite. With limited accountability, transparency, and no democratic elections, most unions...
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