Labor Mechanism Against Teksid
On June 6, 2022, the U.S. government activated the rapid response labor mechanism against Teksid and requested Mexico to review the alleged denial of rights at Teksid Hierro de Mexico’s plant in Frontera, Coahuila.
Why did the United States activate the rapid response labor mechanism against Teksid?
This matter has its origins since 2014, we provide an overview in this post. First, it is important to note that Teksid, an auto parts company, entered into a collective bargaining agreement with the Sindicato de Trabajadores de la Industria Metalmecánica del Estado CTM («CTM Union«) in 1999, which was registered with the Junta de Conciliation y Arbitrage de Coahuila (Coahuila Conciliation and Arbitration Board).
Unions and Union Representation Disputes at Teksid
In 2014, Teksid’s workers went on a labor strike demanding fair profit sharing and joining the «Sindicato Nacional de Trabajadores Mineros, Metalúrgicos, Siderúrgicos y Similares de la República Mexicana» («Miners Union«). At that time, approximately 600 workers voted in favor of joining the Miners’ Union, which is more than half of the workforce. It should be noted that the Miners Union is led by Napoleon Gomez Urrutia, a Senator on behalf of the political party «Morena».
Interestingly, the CTM Union entered into a collective bargaining agreement with Teksid in 2014, which was registered with the Federal Conciliation and Arbitration Board. By virtue of the foregoing, the Miners Union initiated a labor lawsuit to be recognized as the holder of such contract and to be able to negotiate, as well as to receive the union dues.
In June 2018, a vote recount was held for Teksid workers to decide which union they prefer to belong to: Miners Union or CTM Union. The Miners Union again won with 238 votes. However, Teksid refused to recognize the recount and instead dismissed union supporters, according to media reports.
It was not until 2021 when the Mexican Supreme Court of Justice dismissed an appeal filed by the CTM Union, which put an «end» to the legal controversy initiated by the Miners Union. In this regard, Mexican courts recognized that the Miners Union was the union holder of the collective bargaining agreement registered before the Federal Conciliation and Arbitration Board.
However, we understand that Teksid continued not to recognize and negotiate with the Miners Union. This is because the CTM Union was still the holder of the Collective Bargaining Agreement registered in 1999 with the local labor authorities, i.e. Coahuila Conciliation and Arbitration Board.
Complaint to the Interagency Labor Committee in the U.S.
Considering this situation, on May 5, 2022, the United Automobile, Aerospace and Agricultural Implement Workers of America (UAW); the American Federation of Labor and Congress of Industrial Organizations (AFL-CIO); and the United Mine Workers of America (UMWA) filed a petition to activate the USMCA’s Rapid Response Labor Mechanism (RRLM) with the Interagency Labor Committee for Monitoring and Enforcement.
Federal Labor Conciliation and Registration Center Agreement
A few days later, precisely on May 11, 2022, the new Federal Center for Labor Conciliation and Registration (CFCRL) issued a decision to resolve which was the valid and effective collective bargaining agreement, stating the following:
The USTR's Request for Review and the Labor Mechanism Against Teksid
Thus, we arrive at June 6, 2022, when the USTR requests a review of the denial of labor rights, in matters of free association and collective bargaining, at Teksid. The issue being the collective bargaining agreement registered with the federal authorities (i.e. CFCRL), which the Miners Union holds.
In particular, the USTR requests, among other things, to review all actions and events (including the deduction of union dues, payroll deductions, facility access, provision of office space or dismissals) related to the signature, deposit, implementation or maintenance of the Collective Bargaining Agreement registered with state labor authorities, as well as any other actions to establish or maintain the CTM Union as the representative of Teksid’s workers.
Mexico Agrees to Review Teksid
The Mexican Ministry of Economy issued a press release informing that it accepted the USTR’s request for review. Thus, Mexico has 45 days to issue a report from the USTR request, i.e. July 21, 2022. In such report Mexico could either reject the denial of rights, or accept that there was a denial of duties and report the remediation measures.
VTZ Comment on the Labor Mechanism against Teksid
Contrary to the position of the CTM Union expressed in the media, we consider that it is likely that some events that could give rise to a possible denial of labor rights occurred during the term of the USMCA. For example, if Teksid did not recognize the Miners Union after the labor judgment had been confirmed; if there have been threats or dismissals against workers for these reasons or events after the USMCA became effective, etc.
According to media reports, it appears that the Miners’ Union resorted to this mechanism to put more pressure on Teksid, from a «tariff» point of view. However, the Miners’ Union appears to have everything under control, as the Federal Center for Labor Conciliation and Registration (CFCRL) confirmed that the Miners’ Union is the holder of the only Collective Bargaining Agreement still in force. In our opinion, it only remains to be seen what the Mexican Government will state in its USMCA report with respect to Teksid’s attitude or actions towards the Miners Union, if there has been any act or threat against workers and if there has been any action to promote or maintain as holder the CTM Union.