Mexico Will Ensure Enforcement of Labor Reform, Top Lawmaker Says

(Bloomberg) -- Mexico’s new labor reform has ample safeguards in place to ensure that workers will finally be represented by their unions, Mario Delgado, the lower house majority leader, said in an interview.

The reform, which passed the lower house Thursday evening and will likely pass the Senate this month, will require some funding allocation directly from the Finance Ministry this year that won’t have any real impact on the budget, said Delgado of the ruling Morena Party. Financing for next year will be more robust and will be included in the budget, said Delgado, whose party holds a majority in both houses of congress.

Mexico is expediting passage of a law to require that workers are able to vote on unions and their labor contracts through secret ballots, both of which rarely occur in the country. U.S. Democrats, who hold a majority in the House of Representatives, have said enforcement of labor provisions is key to their vote to approve a renegotiated Nafta, known as USMCA, and Speaker Nancy Pelosi has said treatment of workers in Mexico is an outstanding issue.

A labor annex to the USMCA explicitly requires that workers vote to decide on unions and labor contracts in Mexico, where employees often lack basic representation.

Reform Safeguards

"The reform is very clear," Delgado said. "The authorities must ensure that union leadership is overhauled and that every four years workers vote on their collective bargaining contracts."

Delgado said that an independent agency and independent courts will replace the current labor board to resolve disputes and register contracts. Currently the labor board, where government officials, companies and unions hold representation, makes it very difficult for workers to organize freely.

He said that labor boards will also have to be replaced in each state, but local laws won’t have to change in order to do that. They’ll be required to do so by the federal labor law and Constitution, he said.

Delgado also said that the new independent institutions will be strong enough to ensure enforcement. An inspection system won’t be necessary, he said, as some international union representatives have suggested. "Inspections are a bit strange and aren’t that necessary because you’ll have a centralized, public registry of unions and labor contracts. If a company doesn’t comply it will become immediately clear."

To contact the reporter on this story: Nacha Cattan in Mexico City at ncattan@bloomberg.net

To contact the editors responsible for this story: Carlos Manuel Rodriguez at carlosmr@bloomberg.net, Robert Jameson

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