Labor intelligence, key in understanding CCT legitimations

“In the process of adapting to the new reality of union life in the country, over the next few years we will face new risks associated with union scenarios in which companies will see an excess of ‘players without a seat at the table’. How to prepare ourselves in face of this reality? How to anticipate the level of risk in order to develop an appropriate labor strategy?”

Note published on April 12 in El EconomistaCapital Humano [Human Capital] Section by Blanya Correal Sarmiento.

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One of the priorities in the strategic agenda of any business in Mexico is the development of a clear labor strategy with vision that allows the sustainability of the business from the point of view of the challenges of collective bargaining that we face today with the truly significant reform of 2019  to the Federal Labor Law.

The impact that a poorly handled union process or a collective bargaining conflict that gets out of control can be disastrous for any organization. Additionally, in light of the USMCA, this not only has repercussions on operations in Mexico because, given the scope of the rapid response mechanisms, the claim processes can have consequences even on their American headquarters.

According to data by the Federal Center for Labor Conciliation and Registration (CFCRL), to this date we have reached 14,739 legitimized collective bargaining agreements (CCTs) and 4,350 registered unions, this within the total of existing businesses in Mexico, which add up to more than 6 million, according to data from the Inegi [National Institute of Statistics and Geography]. This shows that only a small portion of companies today has an active and formalized union life that complies with the new rules established in the labor law. The question, then, is: What will happen to the companies that do not have a collective bargaining agreement?

In the past, protection bargaining agreements proliferated in Mexico as a mechanism for avoiding the extortion of unions that used to make calls to strike at companies in which they did not represent a single worker. This phenomenon created a culture of white unionism that will completely disappear as of May 1, 2023, but will surely seek to remain in the game under another guise.

Thus, in the process of adapting to the new labor reality, over the next few years we will face new risks associated with union scenarios  in which companies will see an excess of “players without a seat at the table”. How to prepare ourselves in face of this reality? How to anticipate the level of risk in order to develop an appropriate labor strategy?

Labor intelligence is a tool that helps in the management of collective labor relationships through the analysis of data, enabling companies to make business decisions. Today companies need strategic information obtained through the measurement and analysis of endogenous and exogenous variables of union conflictivity, the impact of salary reviews, union trends in each sector and the state of the country, among others.

(OF SPECIAL INTEREST) With so much uncertainty in regard to the future of unionism in our country, the search for mechanisms that help to focus labor strategy efforts becomes necessary.

According to the labor intelligence report generated by De la Vega & Martínez Rojas and the information published by the CFCRL, there are close to 700 legitimation events scheduled for the remainder of the term for the implementation of the reform, the majority of them for the month of April of this year and, therefore, we will surely achieve close to 15,000 formalizations of collective bargaining agreements.

Upon analyzing the information of these legitimations in detail, we find that the 14,739 CCTs correspond to close to 9,400 companies; we find, however, that some companies account for a high number of the legitimized CCTs. 2% of the companies account for 30% of the legitimized CCTs; the majority of them are found in the retail sector (supermarkets) and in mass consumption of food and beverages. Among the companies with the largest number of legitimized CCTs are Walmart, Soriana, Oxxo and Chedraui, which account for more than 1,750 agreements that have been ratified by their workers, that is, over 12% of the agreements that have completed the procedure.

The analysis of failed legitimations is one of the most interesting elements included in this report. In this sense, it is shown that as of March 2023, there are more than 240 CCTs that were terminated as the result of a process of negative voting by the workers in the effort made by unions to legitimize their agreements. Even though this number is not so relevant by itself, a very interesting fact comes to light when going into more detail, as more than 10% of these CCTs correspond to the retail sector, which is precisely the sector with the highest activation of agreements within the framework of the reform.

An a priori conclusion would indicate that those companies in which union life was less developed had greater problems in getting the unions to successfully involve the workers in the legitimation process. If confirmed, this trend will set a fundamental precedent, not only for CCT review consultations in these companies, but also in the rest of the companies in which union life has not existed.

All of this leads us to a crucial point in regard to the challenge for companies in this new stage of union life and collective bargaining that we are about to begin as a country: the need for truly and authentically listening to the workers.

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