If you follow news in Mexico, or do business there, you may have heard of a big debate going on in that country's Congress over the last couple of months.
It was over a labor-law reform bill, which Mexico's Senate approved Nov. 13. The law could accelerate hiring in Mexico by making it easier to fire employees and harder for employees to collect back wages, among other significant changes.
If that sounds like a bad deal for workers, consider that, legally speaking, Mexican workers have enjoyed very generous labor laws for decades. Attorney Vernon Penner, who has offices in Guanajuato and Arizona, describes the laws in simple terms on this web page.
Among the highlights that might surprise Americans:
• Any employee who is fired may sue if he feels he wasn't fired for just cause. If he wins his case, he may choose to be reinstated and receive back pay. If he wins but doesn't want to be reinstated, he gets three months back pay plus 20 days of pay for each year's employment.
• Wages may not be paid on a per-hour basis.
• Profit-sharing is mandated, meaning 10 percent of profits must be distributed to employees.
• Shifts are prescribed by law: Day shift is eight hours, night shift is seven hours, and the mixed, or swing, shift is 7 1/2 hours.
The new law changes several important labor provisions, and is summarized very well here. Among the changes:
• There will be limits on the back pay that fired workers may receive.
• "Closed shops," where employers may only hire members of a certain union, are prohibited.
• Employers will be allowed to pay by the hour.
"The reform is a step in the right direction, as it formally addresses some of the country's most important impediments to job creation and employment flexibility," writes Patrick Fearon of Terra Nova Ventures, the author of the above-mentioned blog item.
BTW, Terra Nova is the firm of former Arizona Gov. Fife Symington. He was governor at the same time as Sonoran Gov. Manlio Fabio Beltrones, who is now an elder statesman in Mexico's Congress, and was a key proponent of the modified labor law that passed.