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 (salaries
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