Collective bargaining agreement consultations, the great acid test for unions

Note published on March 14 in El EconomistaCapital Humano [Human Capital] Section by Blanya Correal Sarmiento.

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The closer we get to May, the more the anxiety of companies and unions grows because of the definition of the legitimations of collective bargaining agreements (CCTs) and, with this, the form of collective organization of their workers.

The numbers provided by the Department of Labor and Social Welfare (STPS) clearly show that, no matter how well we do, we will reach approximately 15% of legitimations on the total of identified CCTs, which is equivalent to close to 20,000 agreements that will successfully complete the process. The question that then arises is: What will the configuration of the union map be like and what will happen to the vast majority of companies that do not have a collective bargaining agreement?

According to the National Statistical Directory of Economic Units (DENUE), the Inegi’s [National Institute of Statistics and Geography] business demography tool, in May 2022 we had more than 5.5 million businesses, among which those in the tertiary sector, that is those with commercial and service activities, predominated.

Now, if we take into consideration that union activity has traditionally concentrated in the industrial sector, particularly in great manufacturing conglomerates, upon identifying among the total number of businesses those that correspond to establishments relating to the manufacturing sector in Mexico, the 2022 figure is close to 608,500 companies, the State of Mexico being the federal entity with the largest number of establishments in this sector, with approximately 65,000 units.

In this context, a large number of companies will live in a union-free environment, in which the entry or not of these collective organization schemes will depend on the decision of the workers. Thus, we can expect an unprecedented amount of union activity, in which workers’ organizations will try to win these workers over and gain entry into companies in order to negotiate new CCTs through the certificate of representativeness.

Along this line, union activity is not very homogeneous in the Mexican Republic, from states such as Puebla, Veracruz or Baja California with very low levels of issuance of these certificates, to the State of Mexico, where more than 1,600 had been issued in January 2023.

This labor risk monitoring will be key for companies to anticipate where they can be most vulnerable and design strategies to prepare their workers in the best choice of their representatives.

Likewise, according to data from the Federal Center for Conciliation and Labor Registration, close to 200 collective bargaining agreements have been terminated through legitimations in which the worker issues his negative vote, ending the relationship with the union, but keeping his benefits and perks.

It is interesting to see the details behind these numbers, because of these 205 completed CCTs, 25% correspond to the commerce sector, specifically retail, mainly in supermarkets and department stores that are traditionally under a protection agreement scheme and which, upon the activation of the legitimation process, are proven to be unions that do not have sufficient connection and strength with the workers, obtaining this result.

In this context, the question is whether the influence of the unions that were able to obtain legitimation of the CCT will be sufficient to obtain favorable results in subsequent consultations within the framework of integral collective bargaining agreement reviews.

If unions truly understand their role of connection with the workers and, at the same time, of balance between the improvement of labor conditions and business results, it is possible that they can consolidate themselves as true representatives of the workers. Otherwise, their existence can also face significant challenges, as in other countries that have ratified the freedom of association agreement and now have very low rates of unionization as a result of the lack of a modern scheme for the affiliation of and attention to unionized people.

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