THE DISAPPEARANCE OF THE JUNTAS DE CONCILIACION Y
ARBITRAJE
A little more than three years after the major Federal Labor Law reforms that
took effect December 1, 2012 introduced new types of contracts and the limits on
back pay (salarios caídos) from a lawsuit, President Peña Nieto introduced in
April of 2016 a second package of changes that includes important modifications
to the Constitution in order to create a new system of labor justice. The
Constitutional reforms were approved in December by the Federal Legislative
branch and sent to the State legislatures for their ratification.
I have prepared an updated translation of Article 123 of the Constitution with
the original text and the new text, so that the reader can compare the reformed
text to the original text. To download this translation at no cost, go to:
Article 123 Constitucional
THE PROBLEMS THAT THIS REFORM WAS DESIGNED TO ELIMINATE.
1. The inadequate use of Conciliation. – Conciliation
has to a great extent been detoured by labor attorneys
looking for a fast payoff.
When workers with a complaint go to the Junta de Conciliación y Arbitraje they
are given an assessment by STPS personnel and a Notice (citatorio) that they
deliver to the employer. Both go to the conciliation meeting with the
Conciliator and they sit down together and try to work out a solution. Many
times there has been a misunderstanding that can be resolved and the worker goes
back to work or a settlement is suggested and accepted or rejected. If the offer
is rejected, the Advisor presents the lawsuit for the worker and dates are set
for the trial (juicio).
However, when the worker goes to the Junta the chances are good that he will be
distracted by a labor attorney offering “free” consultation. The worker signs a
contract to sue the employer, the attorney presents the lawsuit (demanda) and
the Conciliation phase is skipped. The attorney for the employer and the
attorney for the worker go to the first hearing and negotiate. Even when the
Employer could win the lawsuit, a settlement is less expensive than what he will
pay his attorney to go to trial.
2. The worker abandons his position or resigns without a
signed resignation in the worker’s own handwriting.
The worker will win this lawsuit because his statements are evidence and the
Employer must have documentation to prove his/her case. Sometimes the worker
will just say that the Employer made him/her sign a resignation. It is the
Employer that must prove otherwise with documentation. Once the lawsuit is
presented, it is still going to be less expensive for the Employer to negotiate
a settlement. Remember if the employer loses the case, he/she will pay back
wages up to a year.
3. Simulated resignations.
I don’t want to give anyone ideas, but there are employers that within all of
the documents a worker has to sign is a blank document or a resignation without
a date. When the Employer wants to fire a worker, he/she simply fills out the
signed resignation and puts a date on it.
4. Reinstatement of the worker
The employer during the conciliation stage or during the trial (juicio) offers
to reinstate the worker with a raise in salary. The worker accepts and then the
Employer builds a case against the worker to find a cause for rescission. When
the worker accepts reinstatement, the lawsuit is cancelled. Then a short time
later the Employer rescinds the contract with cause.
5. Deliberately prolonging the process
The attorney for the worker has a very good case for a firing without cause.
Instead of negotiating, he pays the worker out of his own pocket more than what
the worker could expect in a negotiation and then he prolongs the process for up
to a year in order to collect a year’s back wages, plus 3 month’s wages, and
seniority. The attorney waits a year but he pockets a much larger amount.
These are some of the abuses of the present system and there is no real justice
for the worker or the employer. Many labor attorneys have taken advantage of the
flaws in the system to exploit both the employer and workers.
These are some of the abuses of the present system and
there is no real justice for the worker or the employer.
Many labor attorneys have taken advantage of the flaws
in the system to exploit both the employer and workers.
OBJECTIVE OF THE CONSTITUTIONAL REFORM
This Constitutional modification reforms and makes
additions to Article 107 and Article 123 of the Federal
Constitution in order to modify the process for labor
disputes that include 3 basic changes.
1. Labor justice will be imparted by the Federal
Judicial branch or the Judicial branches of the States
based on the present formula for jurisdiction.
2. The reform creates an OBLIGATORY Conciliation phase.
3. Jurisdiction between federal and state authority is
altered to create a new government entity to manage and
record collective labor contracts and to guarantee that
there is a majority agreement to implement a union. At
present, there are “white” unions installed in many
companies by the company management that on paper
“represent” the workers, but they are paid for by the
companies for the specific purpose of preventing
strikes. Often the workers do not know that there is a
Union in their company. This legislation is intended to
eliminate this very common abuse.
LEGAL BASIS FOR THE SECONDARY REFORMS
It is important to remember that this reform is at the
Constitutional level and is intended to establish the
legal basis for reform. The State and Federal
governments have one year from the date of publication
(February 24, 2017) to reform the Labor Law and to set
up the new Labor Courts under the authority of the
Judicial branch. Until the secondary reforms to the
Labor Law and the legislation at the state levels to set
up the Conciliation Centers and Labor Courts – there
will be no effects from this reform.
CURRENT LEGISLATION FOR DISPUTES
HISTORICAL BACKGROUND: The Mexican Constitution that was
promulgated on February 5, 1917 contains Article 123
which regulates labor. Mexico with its Article 123 was
the first country in the world to establish labor
conditions such as a 48 hour work week and overtime pay,
maternity leave for women, obligatory paid vacations and
the right to organize unions. After the Constitution
took effect in 1917 under President Carranza, the
secondary labor legislation and enforcement of the
rights established in Article 123 were left to the
States. This created a very uneven situation in the
country, labor enforcement varied markedly from State to
State and there were many different labor laws. Because
the intent and promise of Article 123 was not being met.
From 1917 to 1931, labor law and disputes were handled
by the States in civil courts. in 1931 President Pascual
José Rodrigo Gabriel Ortiz Rubio (President from 1930 to
1932 enacted the Ley Federal de Trabajo or Federal Labor
Law. The LFT established Juntas de Conciliación y
Arbitraje (the Boards of Conciliation and Arbitration),
made up of representatives of the government, employers
and labor unions. This establishment was intended to
fulfill the promises of the Revolution (1910 – 1917) in
which workers and unions played a pivotal role. Under
this system the Juntas de Conciliación do not belong to
the Judicial branch but are administered by the
Executive branch, under the Secretary of Labor and
Social Welfare (STPS).
JURISDICTION
Juntas de Conciliacion y Arbitraje (Boards of
Conciliation and Arbitration) Federal and State. Under
the present Article 123, part A, section XX the
Constitution establishes the Juntas and establishes the
jurisdiction of States and the Federal STPS. For
example, the following are under Federal jurisdiction:
In the industries for textiles, electricity, sugar,
mining, hydrocarbons, automotive and chemicals. In
industries administered by the Federal government, and
industries with collective contracts that cross state
lines.
LABOR PROCESSES
The ordinary procedure for individual and some collective conflicts is divided
into 2 phases: (Art. 870 – 891 of the Federal Labor Law)
1. Instruction phase:
• First: the presentation of the lawsuit (Demanda),
notifications, etc.
• Second: hearing for conciliation, lawsuit, exceptions,
offering and admission of evidence.
• Third: The evaluation of the evidence presented by the
parties
• Fourth: close of the instruction phase, certification
that no additional evidence exists to be presented.
2. Resolution phase:
• First: The preparation of the project of the laudo (in
labor law the final decision or sentence is called a
laudo; it is an arbitration decision with no appeal.
• Second: Discussion and voting on the project of laudo.
• Third: Approval and signing of the laudo.
On paper and theoretically the Resolution phase is
managed by representatives of the government, employers
and labor unions but the reality is more arbitrary and
is managed by the President of the Junta who signs the
laudo.
There is a Special procedure that handles certain types
of conflicts – I won’t go into a lot of detail but those
are conflicts related to the following:
• Labor shift
• Housing for workers
• Qualification and training for workers
• Seniority
• Collective labor contracts
• Temporary suspension or termination of the collective
labor relations for reason of force majeure or lack of
raw materials not attributable to the employer.
STRIKE PROCEDURE
In Chapter XX of the Labor Law, the strike procedure is
handled by the Junta. This procedure has various stages.
• First: Presentation of the strike petition (Pliego Petitorio con emplazamiento
de huelga)
• Second: Conciliation hearing
• Third: Strike or declaration of the nonexistence of Strike
• Fourth: End of the procedure, a laudo is issued for the existence or
nonexistence of Strike, or the legality or illegality of the strike, with the
consequences stipulated in the Labor Law.
CONSTITUTIONAL MODIFICATIONS
The current reform includes modifications to Article 107
and 123 for the purpose of eliminating the Juntas de
Conciliación y Arbitraje so that labor justice will be
administered by the Judicial Power of the Federation
instead of the Executive Power through the STPS. This
has the effect of returning the country to the original
ideas of Article 123 in the Constitution of 1917 and
hopefully not the deficiencies.
1. The reform to Constitutional article 107 removes
reference to the Juntas de Conciliacion y Arbitraje from
the article that is the basis for Amparo. If you are
unfamiliar with the concept of Amparo, “AMPARO is a
judicial action to protect from acts or omissions of the
authorities that violate the human rights and guarantees
protected by the Mexican Constitution”. This is my brief
definition, for a detailed explanation review my
definition online. Amparo will be the appeal recourse
for the new labor courts. 2. The terminology
describing class struggle is removed from Article 123,
section XX. 3. Section XX of Article 123 has had
major changes establishing the labor courts, their
integration, how they will be formed, they will be
presided over by judges, and the sentences of these
labor courts. 4. The entire Article 123 has been
adjusted to eliminate the Juntas and replace them with
labor courts.
CREATION OF CONCILIATION ENTITIES OR CENTERS INDEPENDENT
OF THE COURTS
At present the Juntas de Conciliación y Arbitraje are responsible for resolving
disputes between the workers and employers.
The basic changes or adjustments in Article 123 is intended to do the following:
1. The Conciliation procedure before a lawsuit and trial is not part of the
judicial process or labor courts and the courts will not be involved in
Conciliation. In section XX of Article 123, the necessity of the conciliation
phase is indicated. This conciliation phase must be legislated into the civil
codes of the States and Federal governments.
2. The creation of administrative entities (Federal and State) that will be
responsible for the Conciliation procedures.
3. The Conciliation procedure will be OBLIGATORY and prior to labor trials in
labor courts. Before going to a labor court, the Conciliation hearing is
obligatory.
UNION CONTRACTS
The reform which is intended to make unions truly representative of the workers
is found in the new section XXII Bis of Article 123 and is intended to assure
the free access to collective bargaining and unions that represent the workers
(and the intent to eliminate white unions. It includes the following elements:
1. Representation of union organizations.
2. Signing, recording and deposit of the union contracts.
3. The personal vote, free and secret of workers to elect their union directors
and representatives.
WHEN DO THE CHANGES TAKE EFFECT?
The reform in its Transitional articles describes the
transition to the new system.
1. The Congress of the Union and the State legislatures
have 1 year to make the necessary changes in State and
Federal laws. For example, this first means a reform to
the Federal Labor Law and the Organic Law of the
Judicial Power of the Federation in order to implement
the changes and create the labor courts. 2. Until the
Labor Courts, the Conciliation Centers and the Federal
Decentralized Organization (for recording and deposit of
labor contracts) begin operating, the Federal or State
STPS (Secretary of Labor and Social Welfare) will
continue operating. When the new labor courts begin
operating, the Juntas must transfer the procedures,
files and documents to the new courts.
CONCLUSION
The “DECREE by which various provisions of Articles 107 and 123 of the Political
Constitution of the United Mexican States are reformed and added, in matters of
Labor Justice” was published in the DOF on February 24, 2017; it took effect the
following day with the timetable mentioned in the Transitional articles.
Until the secondary legislation is modified and the new labor courts are set up,
there will be no effects from this change. It is my opinion that that the time
table may eventually be extended, because of all the changes and legislation
that must take place. In the meantime, there could be changes after the
Presidential election in 2018 that could alter the course of this reform.
To download a bilingual translation of Article 123 with a comparison of the
original text and reformed text go to
MEXICAN LAWS - ARTICLE 123
To purchase the Federal Labor law in English go to
MEXICAN LAWS
If you have any questions, please contact Glenn McBride at
glenn@mexicanlaws.net or Jairo Ramos at
Jairo@mexicanlaws.net or visit our website
www.mexicanlaws.com
