In face of economic uncertainty, a decrease in exports and tension over the review of the USMCA, together with the increase in payroll costs, the country is experiencing a period of technical stoppages, particularly in the automotive and auto parts sector.
Technical stoppages are an increasingly frequent measure among formal companies, stated Óscar de la Vega, founding partner of the De la Vega & Martínez Rojas Law Firm.
The lawyer pointed out that the temporary suspension of certain operations or shifts is a measure that is being taken due to the lack of clarity in the economic outlook, caused by economic uncertainty and the renegotiation of the USMCA.
“As we don’t know what is going to happen, a suspension of the effects of labor relationships is triggered. There is generally a negotiation in regard to certain aspects, like 50 percent of the salaries. Óscar de la Vega.
“Workers are not at work, but the employment relationship is maintained, in order to see what happens in a few months”, the lawyer specializing in Labor Law said.
According to the specialist, even though “technical stoppages” are a legal and a temporary measure, they are a reflection of the pressure that companies are under in face of a more rigid regulatory framework and by the labor reforms that, while seeking better work conditions for the workers, do not always take into account the economic reality of micro and small businesses, the main generators of employment in the country.
He warned that a series of calls to strike and strikes could take place next year given the precarious economic situation companies find themselves in. This added to the fact that the democratically elected unions will seek to obtain salary increases, better benefits and improved work conditions through calls to strike.
The lawyer said that the tightening of work conditions and the increase to the cost of labor could lead to the loss of formal employment.
He also pointed out that, according to data provided by the INEGI [National Institute of Statistics and Geography], over 50 percent of the Economically Active Population (EAP) works in the informal sector, as they seek to avoid tax burdens such as Social Security, the Infonavit [National Workers’ Housing Fund Institute], and the Tax Administration Service (SAT), among others.
In this regard, he criticized the lack of support for Micro and SMEs, which will be the ones most affected by economic uncertainty and the increase of payroll costs due to the labor reforms, such as the increase of the number of vacation days and the minimum wage.
In many counties, Spain, for example, companies with less than 50 workers receive support. And these companies are differentiated from large companies, they are very solid, and they have benefits such as the 40 hour week. Óscar de la Vega.
Óscar de la Vega considered that, in order to revert the increase in technical stoppages and informality, Micro and SMEs should be supported through tax incentives and credits that allow them to mitigate the impact of the economic and labor changes that both our country and the world are experiencing.
They should also be given greater flexibility in the application of the labor reforms since, as emphasized in an analysis conducted by the World Bank (WB) points out, the greater the flexibility in labor laws, the greater the number of people in formal employment.
Then the labor lawyer proceeded to advocate “for strengthening micro and small businesses, which constitute a national enterprise, through credits, and even with a different legal framework from that of large companies.”
