Understanding Mexican Federal Labor Law requires recognizing two undisputable facts: 1) It is part of a coded legal system (opposed to common law) where all regulations and by-laws are contained in one central governing statutory law, and 2) it is intrinsically an act that was passed in post-revolutionary Mexico (1900´s) when serious offenses, abuse and exploitation of workers occurred. Thereafter, it must be viewed and explained in lieu of historic circumstances that help vindicate the employee protective nature of its content.
Despite the heavy codification and an employee protective nature of Federal Labor Law, foreign investors and executives must not be erroneously influenced or alarmed regarding employee costs, severance packages, seniority rights, unions or profit sharing. Ironically, due to penalties, insurance costs, compensation packages and wage levels, the economic burden of employees and legal exposure therewith, can even be considered low when comparing Mexico to U.S standards. For all businesses and executives, it is essential to understand this economic tradeoff and what labor and employment compliance in Mexico looks like in terms of costs and exposure. Thereafter, all investments require consulting and training to understand and take advantage of every edge that Mexico has to offer.
Rightfully so, when considering Mexico as an option or when trying to understand labor and employment requirements, one must fathom the following principles under which all employment norms and regulations are established.
The workplace stability principle: All labor relations in Mexico are centered on the premise that all employees must be guaranteed permanency and longevity in the workplace. Employers are fairly restrained in terms of available types of contracts, and termination procedures for there is no termination at will. Avoiding labor contingencies requires smart Human Resource strategies upon hiring and terminating as to avoid claims whilst building stable and productive workplaces.
The burden of proof principle: Any given individual may claim against any given employer without evidence or just cause. The employer has the procedural burden to disprove or prove otherwise unless the existence of a relation is denied in which case the burden will fall on the alleged employee. This creates the obligation as an employer to document and have command over all elements that govern an employee-employer relation such as: contracts, payment receipts...
