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Labor & Social Security
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Amendment to the Federal Labor Law December 2012

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Amendment to the Federal

Labor Law

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On September 1st, 2012, the President of Mexico, Felipe Calderon Hinojosa, presented to the Congress a preferential initiative to amend, abolish and include several provisions of the Federal Labor Law. After the legislative procedure has been fulfilled, the amendment was approved with several modifications included by the legislators and finally published last Friday 30th of November, 2012, coming into effect the day following its publication. The present Informative Bulletin intends to give a general overview of the contents, implications and changes this amendment involves, which will be explained in the following chapters.

Human Rights

Article 2 of the Federal Labor Law is amended by including the figure of ?Decent Work? in accordance to the provisions of the International Labor Organization. It also includes the obligation to provide preparation and training to obtain a better productivity and a benefit for the employee. New concepts are included, such as mobbing and sexual harassment and other forbidden behaviors to the employer.

Outsourcing

With regards to the subcontracting of personnel, commonly known as ?outsourcing?, the amendment to the Federal Labor Law includes a new regulation, that provides among other obligations the following:

The company which is benefited by the works of the personnel, must be certain that the outsourcing company counts with sufficient and own elements to fulfill with the obligations that could arise from the labor contracts. The outsourcing company must prove their specialized labor, and will never cover the total amount of activities of the benefited company, and should neither execute identic or similar activities executed by the rest of the workers of the benefited company.

Contracting

The amendment to the Federal Labor Law contains several changes with regards to contracting issues, including new figures such as: labor contracts by season, initial training contract, trial period contract and contract per hours.

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• Trial Period Contract: in the labor contracts for and undetermined period or those contracts which exceed more than 180 days, the employee may be employed for a 30 day trial period (or 180 days for managers and directors), in order to verify that the employee complies with the requirements and necessary knowledge to perform the labor. If the employee does not accredit the necessary knowledge at the end of the trial period, the labor contract will be terminated without liability for the employer.
• Initial Training Contract: This Contract is used when the employee renders a service or labor in order to acquire the knowledge and necessary aptitudes to perform the labor to be executed in the definitive labor contract.
• Contract per hour: with respect of wages by unit of time, the employer and employee can agree the amount of the wage, as well as the payment of each hour of rendering the services. This type of contracts must not exceed the maximum shift hours provided by the Law and neither may the income be lower of that of the daily shift.

Termination

Article 47 of the Federal Labor Law suffered an enormous change which benefits the employers and corporations. This change establishes that the termination notice made by the employer must be given personally to the employee at the same moment of the dismissal or notifying to the Board of Conciliation and Arbitration within the following five working days. Prior to the amendment, if the employee refused to accept the notification, the employer was obligated to prove this denial from the employee to receive the notice, prior its filing before the Local Labor Board.

Accrued Wages

The accrued wages are one of the principal reasons why the labor trials had been so expensive.

This reform establishes that in case the employee has the right to demand accrued wages, these will be calculated from the dismissal date and up to a maximum period of twelve months. If the trial is not concluded during such twelve months, the employer will pay 2% monthly interests generated by the amount of fifteen months salary.

Qualification and Training

The amendment includes several changes regardin the employer?s obligation to comply with the training and formation given to the employees for their professional and personal benefit. Article 153 of The Federal Labor Law includes important changes which every employer must know and follow.

Judicial Procedure

The Federal Labor Law in effect in Articles 873 and 875 establishes that the initial hearing consists in three phases: Conciliation, Complaint and Exceptions and Offering and Admission of Evidence.

The amendment modifies the phase of Offering and Admission of Evidence, leaving the initial hearing with only two phases: Conciliation and Complaint and Exceptions. The offering and admission of evidence will be held on a second hearing.

Conclusion

The amendment to the Federal Labor Law will simplify in an enormous way the labor contracts for the corporations, establishing new measures that will increase the productivity of the corporations and the professional and personal growth of the employees.

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For additional information, you may contact any of the members of our Corporate & Business Practice Team.