Mexican Senator Napoleón Gómez Urrutia. Photo: El Ceo


Last May 1, which happened to be International Labor Day, Mexico’s Labor Secretary Luisa María Ugalde announced the new labor reform which became law upon being published in the Official Gazette of the Federation.

“(This law is) historic because it looks after a pending debt in the nation, because democracy and freedom had not arrived in the world of labor,” Ugalde said.

With the legal changes, she said, “there comes a profound transformation in labor justice,” as the highly corrupt and independent Conciliation Boards disappeared and were replaced by labor courts now under the federal government.

Promptly – in legislation terms – the Mexican Senate began to work on new labor regulations to put order to the disorder labor relations had become in Mexico, and Labor Committee President and miners and foundry workers labor leader Senator Napoleón Gómez Urrutia also went to work.

The outcome of his efforts was made public two weeks ago when the Labor Committee voted on a new bill to submit to the floor of the Senate regulating union elections and also aiming to bring stiff regulations to the current practices of labor outsourcing, affecting some 8 million Mexican workers.

The bill was met by a stone wall established by National Regeneration Movement (Morena) Majority Leader Ricardo Monreal, who put on hold any discussion on Gómez Urrutia’s brainchild bill until next year, after an outcry of protests from the leading business organizations’ lobby in the Senate.

Not strangely enough, the debate is between two Morena senators, who claim to be on the same side regarding the new Labor Law.

Yet the warning to all outsourcing business practitioners is that the rules of the labor contracting game are about to change radically, painting a new landscape for the future of labor relations in Mexico, very much in accordance with what is being practiced in the two other partner nations of the North American Free Trade Agreement (NAFTA), the United States and Canada.

Gómez Urrutia spent nearly 12 years “in exile” in Canada, accused of stealing $55 million from the Mining and Metallurgy Union’s fund. His foes, mainly mining and transportation Grupo Mexico tycoon owner Germán Larrea, attempted to extradite him back to Mexico, but to no avail.

Now, Gómez Urrutia might have gone into exile, but he did not go into hiding. During his stay in Canada, he befriended members of Canadian unions and frequently visited the United States, never missing all the major meetings of the American Federation of Labor-Council of Industrial Organizations (AFL-CIO.)

In fact, when he attended the AFL-CIO convention last October, the organization’s leader, Richard Trumka, mentioned his presence and introduced him as “my brother, Napoleon Gómez.”

During the July 1, 2018, presidential election, Napoleón Gómez won the plurinominal senate seat under Mexican President Andrés Manuel López Obrador (AMLO), who deemed him then as “a politically pursued person,” and, indeed, had he stayed in Mexico during the Felipe Calderón and Enrique Peña Nieto administrations, he would have been thrown in jail.

The point is that the shape of things to come in hiring practices in Mexico are about to take a 180 degree turn, with radical changes inevitably on the way.

The problem now is the former Labor Law itself, which permitted entrepreneurs many freedoms that will definitely be curtailed and banned if the new labor legislation is voted into effect by both houses of the Mexican Congress next year.

Gómez Urrutia has said business organizations have already hit the panic button, particularly in the outsourcing subcontracting business system they are currently employing, to which he wants to bring about a radical change. Private sector business leaders immediately counter attacked.

“They first started with a campaign to discredit the bill with fake arguments, among them that that subcontracting mechanism was being eliminated and that it imperiled the ratification of the USMCA,” Gómez Urrutia told La Jornada newspaper last week.

“They ended up pressuring the Senate coordinators and managed to get them to not approve the bill in this period of sessions. But we will not desist. The second Senate consultation will be carried out in January. This activity (outsourcing subcontracting) must be regulated because it is causing grave damage to public finances and workers’ rights.”

In describing the practice, Gómez Urrutia said that there is nothing wrong in subcontracting many services – such as cleaning – “but it does not justify that a consortium like Grupo México uses a financial services company to hire its miners.”

(Note that Gómez Urrutia specifically named Grupo México, which is run and operated by his political foe Germán Larrea. No doubt these two have a bone to pick.)

“It is a recurrent practice, which in fact is substituting employers.,” the senator said. “If a company subcontracts another one that is in charge of handling payrolls to workers who keep doing the same duties, but in a simulated way they have stopped working for the original hiring company.”

The problem, for outsourcing business practitioners, is that many senators are fully behind Gómez Urrutia.

Senator Martí Batres, who was the Senate president until last September, said that “in this new stage, with a government willing to rebuild the rights of workers, we must go on with this initiative that does not eliminate outsourcing, (but regulates it), because it’s been applied illegally for decades, a form detrimental to the national economy and that of unionized workers.”

So change in Mexico’s labor laws is imminently coming. Businesses won’t like it, but with Gómez Urrutia at the helm, that change is inevitable.

AMLO will no doubt applaud that change, but for sure, businessmen and industrialists won’t. The business community will its say. The new law is still in the stage of legislative debate in both houses of Mexico’s Congress.

On the other hand, both Canadian and U.S. union leaders will be pleased with the changes which will improve the quality of life for Mexican workers.  Gómez Urrutia has their full backing.

A clash is inevitable, but such is the process of change!



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