The Mexican labor law system is administered by several government agencies, including the Ministry of Labor and Social Welfare(STPS) and the Federal Conciliation and Arbitration Board(FCAB). Let us take an in-depth look at these institutions.
Ministry of Labor and Social Welfare
The Ministry of Labor and Social Welfare (MLSW) is the government’s institution in charge that companies comply with Mexico’s labor laws. In other words, they protect Mexican workers’ rights. This Ministry is in charge of further regulating labor in Mexico by issuing official mandatory standards known as NOMs (Norma Oficial Mexicana). There are 44 labor-related NOMs classified into five different categories.
- 12 Labor safety standards to reduce accidents in the workplace.
- 10 Labor health standards to prevent diseases in the workplace.
- 6 Organization-related standards to manage workplace human, material, and financial resources.
- 7 Industry-Specific standards.
- 9 Equipment-related standards that regulate the equipment needed in the workplace (fire extinguishers, special footwear, etc.)
Federal Conciliation and Arbitration Board
The Federal Conciliation and Arbitration Board (FCAB) is responsible for solving conflicts between companies and their employees. It is the referee, while the rules are the labor laws in Mexico. The Ministry of Labor and Social Welfare supervises the FCAB. However, it is an autonomous entity that handles its own affairs.
Whenever there is a labor conflict and a lawsuit, the FCAB analyses it and calls in both parties; the company’s legal representative and the employee. What the FCAB pursues is to conciliate (hence its name) or, in other words, settle the dispute. It always aims toward negotiation.
Let us see how this work step-by-step.
- Reception of the lawsuit. The FCAB receives the lawsuit in written format. On the next day, the audience where both parties must assist will be scheduled in the following 15 days.
- Audience first phase. On the day of the audience, the parties go through a conciliation phase, where no lawyers are involved.
- Audience second phase. If the conflict is not solved, each party can get their lawyer involved in the next phase to elaborate their case further.
- Audience third phase. If the conflict is still not solved, the next is an admission of evidence phase, where the party that sued must prove its case.
If, at any moment, the conflict is resolved, the audience stops. This is usually done in written form. About 99% of the cases that go through the FCAB are severance payments. One of the most common bad practices related to labor laws in Mexico is “severance hunting.” These are employees looking for jobs, and as soon as their probation period is over, they do their best to get fired. Since the law greatly protects employees, they usually get away with a decent amount of money. The way to prevent this is to have a well-drafted Internal Work Regulation, like the company’s game rules.