Doing Business

Doing Business in Mexico 2015

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84 Tax and Legal Services - PwC Mexico Labor relations Availability of labor Because of rapid population growth, unskilled and semiskilled labor is readily available throughout Mexico. With the rapid expansion of labor-intensive processing plants (maquiladoras), a pool of skilled labor is also available, especially in the northern border areas. Most companies find that the skills of the younger members of this pool can easily be upgraded through adequate training programs, particularly in the less-industrialized areas. Skilled technical and professional personnel and well-trained office workers can usually be found, or less-experienced personnel can be trained for more demanding positions. Employer/employee relations Comprehensive labor legislation has been in effect for many years. The federal labor law is clearly intended to favor the employee in all relations with an employer, as it contains the principle, previously sustained by the labor authorities and the Supreme Court, that in case of controversy in the interpretation of the law, the treatment most favorable to the employee will always take precedence. Nevertheless, in most cases companies are able to employ and keep satisfactory employees at all levels. Unions The law provides that 20 or more employees may form a labor union to bargain collectively with the employer regarding the terms of their employment. Such labor unions are formed in many cases, and collective labor contracts are executed in the case of industrial enterprises. Contracts usually amplify or add to the rights enjoyed by the workers under the federal labor law or the social security law and are subject to renegotiation at least every two years. The labor law provides that an application for review of the daily-rate cash wages shall be made at least thirty days before the end of one year following execution, review or extension of the collective labor contract. The contract clauses regarding salaries and other benefits may be reopened after one year. Labor unions are particularly strong in the petroleum, mining, education, entertainment, textile, restaurant, telephone, rubber, sugar, automotive and newspaper industries. Labor unions have traditionally used the threat of a strike during the negotiation process to exert pressure on management, but negotiations are usually concluded before reaching the stage where the employees actually strike. The Labor Ministry is empowered to mediate and rule on labor disputes and to impose sanctions on unions or employers for labor law infringements. Additionally, and in an effort to end a long tradition of irregularities in some unions, the Mexican government has taken steps to avoid abuses of power and to limit the unions' activities to their intended purpose of employee protection and welfare. Managerial employees Confidential employees (i.e., those in positions of trust) are those who exercise the functions of management, supervision, inspection, and auditing when these functions are of a general nature. The principal provisions that relate to confidential employees are that the employer is not required to reinstate them in their jobs in case of unjustified dismissal, they are not entitled to belong to a union, and they are not entitled to vote in strike proceedings.

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