12 See, for example,
Guillermo Marrero, "Labor Issues for Maquiladoras," 4 Latin
America Law and
Business Report (May 31, 1996), citing "an anti-union attitude held by many
maquiladora operators in most locations; the perception by some maquiladora workers and
managers that trade unions will have little to offer them; and the inability or
unwillingness of unions to zealously represent workers against foreign
manufacturers." See also Alfredo Hualde, "Industrial Relations in the
Maquiladora Industry: Management's Search for Participation and Quality," in Maria
Cook and Harry Katz, eds., Regional Integration and Industrial Relations in North America
(1994); Jorge Carillo and Alfredo Hualde, "Maquiladoras: La restructuraci\n
industrial y el impacto sindical," in Bensusn and Len, eds., Negociaci\n y conflicto laboral en MJxico (1990); MarRa Eugenia De la O. and Cirila Quintero, "Sindicalismo y contrataci\n colectiva en las maquiladoras fronterizas," Frontera Norte 8 (July-December 1992); M\nica Claire Gambrill, "Sindicalismo en las maquiladoras de Tijuana: regresi\n en las prestaciones sociales," in Jorge Carrillo, ed., Reestructuraci\n industrial: Maquiladoras en la frontera MJxico-Estados Unidos (1986); Edward J. Williams, "Attitudes and Strategies Inhibiting the Unionization of the Maquiladora Industry: Government, Industry, Unions and Workers," VI Journal of Borderlands Studies 51 (1991); Susan Tiano, Patriarchy on the Line: Labor, Gender, and Ideology in the Mexican Maquila Industry (1994); Kathryn Kopinak, Desert Capitalism: Maquiladoras in North America's Western Industrial Corridor (1996).
13 See, for example,
AnnaLee Saxenian, Regional Advantage: Culture and Competition in Silicon Valley and Route
128 (1994), noting that "No high technology firm has been organized by a labor union
in Silicon Valley during the past 20 years, and there have been fewer than a dozen serious
attempts," at 55; Kathy Sawyer, "Unions Striking Out in High-Tech Firms,"
the Washington Post, March 18, 1984, at C1
14 The legal
frameworks presented here cover general private sector labor law. Each country has special
constitutional or statutory regimes for public sector employment in federal, state or
provincial, and subordinate jurisdictions. The countries also have special legislation for
certain private sector industries or occupations. These specialized legal systems are not
treated here
15 See Textile
Workers Union v. Darlington Mfg. Co., 380 U.S. 263 (1965).
16 Recall that in the
case that gave rise to submission no. 9501 OAN/Mex and the Ministerial Consultations that
prompted this report, the workplace was a telemarketing facility consisting essentially of
offices, cubicles, and telephone lines and phones. The work was shifted to another U.S.
city after the closing of the facility. For another example of capital mobility in the new
global economy, see Mike Mills, "With Click of a Mouse, White-Collar Jobs Go
Overseas," the Washington Post, September 17, 1996, at A1.
17 Wright Line, A
Div. of Wright Line, Inc., 251 N.L.R.B. 1083(1980), enf'd, 662 F.2d 899 (1st Cir. 1981),
cert. denied, 455 U.S. 989 (1982).
18 NLRB v. Gissel Packing
Co., 395 U.S. 575 (1969).
19 Because of the
limits of this study and its focus on the effects of plant closings on workers' right to
organize, as distinct from the right to collective bargaining, the issue of the employer's
duty to bargain with the union over a decision to close the plant (as opposed to the
effects of the decision to close), and the distinction between mandatory and permissive
subjects of bargaining (a distinction that does not exist in Canadian or Mexican labor
law), are not discussed here. See First National Maintenance Corp. v. NLRB, 452 U.S. 666
(1981).
20 See, for example,
Roger W. Schmenner, Making Business Location Decisions (1982), a study that equated
"favorable labor climate" with non-union status, and concluded that "[a]
new workforce that is nearly impossible to organize is perhaps the most prized side
benefit of a new plant site, and it is the controlling consideration for many
companies." (at 37, 156–157); Thomas A. Kochan et al., The Transformation of
American Industrial Relations (1986), discussing union avoidance as a factor in U.S.
corporate investment and plant closing decisions (at 66–76).
21 Note that in U.S.
terminology, affected workers or unions file a "charge." In Canada, this initial
filing is called a "complaint." In the United States, a "complaint" is
issued by the Regional Director acting as an arm of the General Counsel upon finding merit
to the charge. The finding of merit is preliminary; it is not a determination of guilt.
22 See for example,
Ontario Labour Relations Act, 1995, S.O. 1995, c.1. (hereinafter "OLRA"), s. 70:
"No employer or employers' organization and no persons acting on behalf of an
employer or an employers' organization shall participate in or interfere with the
formation, selection or administration of a trade union or the representation of employees
by a trade union or contribute financial or other support to a trade union"; and
OLRA, s. 72: "No employer, employers' organization or person acting on behalf of an
employer or employers' organization (a) shall refuse to employ or continue to employ a
person, or discriminate against a person in regard to employment or any term or condition
of employment because the person was or is a member of a trade union or was or is
exercising any other rights under this Act; (b) shall impose any condition in a contract
of employment or propose the imposition of any condition in a contract of employment that
seeks to restrain an employee or a person seeking employment from becoming a member of a
trade union or exercising any rights under this Act; or (c ) shall seek by threat of
dismissal, or by any other kind of threat, or by the imposition of a pecuniary or other
penalty, or by any means to compel an employee to become or refrain from becoming or
continue to be or to cease to be a member or officer or representative of a trade union or
cease to exercise any other rights under this Act."
23 See, for example,
the American Airlines and Wal-Mart cases described in Part Three. The statements "I
hope you will think very seriously before taking any action that will make your job a
union job" and "It would be inappropriate for your company to comment on what it
will or will not do if the store is unionized" were found to be unlawful closing
threats in the context in which they were delivered.
24 See Newfoundland
Labour Relations Act, R.S.N. 1990, c. L-1 (hereinafter "Nfld. LRA"), s. 26; and
Saskatchewan Trade Union Act, R.S.S. 1978, c. T-17 (hereinafter "STUA"), s.
11(1)(I).
25 UEW, Local 504 v.
Westinghouse Canada Inc. (1980), 80 C.L.L.C. 16,053 (O.L.R.B.); upheld on judicial review
Westinghouse Canada Inc. v. UEW, Local 504 (1980), 80 C.L.L.C. 14,062 (Ont. Div.Ct.).
26 See British
Columbia, s.8(6); Manitoba, s.7; Ontario, s.89(5); Quebec, s.17; Prince Edward Island,
s.11(5); Canada, s.98(4).
27 See Kennedy Lodge
Nursing Home (1980), 81 C.L.L.C. para. 16,078 (O.L.R.B.), at 473. Analyzing this passage,
one commentator argued that "this simply collapses the distinction between
discriminatory (anti-union) and economic motives, at least in a good number of cases. The
rational employer, intent on avoiding the collective bargaining process is protected
through this test." See Brian Langille, "Equal Partnership in Canadian Labour
Law" (1983), 21 Osgood Hall Law Journal 496.
28 See Kennedy Lodge
Inc., (1984), O.L.R.B. Rep.931.
29 In City Buick
Pontiac (Montreal) Inc. (1981), 81 C.L.L.C. 14,108, the Quebec Labour Court held that as
long as the closure was permanent and complete the employer could go out of business with
impunity, despite the presence of anti-union motive.
30 See Int'l
Woodworkers of America, Local 2–69 v. Consolidated Bathurst Packaging Ltd., (1983),
83 C.L.L.C. 16,066 (O.L.R.B.); upheld on application for judicial review on another point;
Consolidated Bathurst Packaging Ltd. v. Int=l Woodworkers of America, Local 2–69
(1990), 68 D.L.R. (4th) 524 (S.C.C.).
31 See Insurance
Courier Services and UFCW, Loc. 175 (1993), 18 Can. L.R.B.R. (2d) 286 (Can); Westfair
Foods and RWDSU, Local 454, (1993) S.L.R.B.D. No. 2.
32 In Humpty Dumpty
Foods Ltd. (1978), 78 C.L.L.C. 16,136 (O.L.R.B.), a case involving the transfer of
operations to a location beyond the coverage of the collective agreement, the board
ordered the employer either to reopen operations at its original location, or to agree to
extend the scope of the recognition clause in the collective agreement to cover its new
locations. Subsequently, in Westinghouse, supra note 3, the employer relocated its
operations to avoid a collective agreement, at the same time creating considerable
employment. Because of the intermingling of old and new employees, the board refused to
extend the collective agreement to cover the new locations. Instead, existing employees
were given the right to claim job openings in other divisions of the old location or at
the new locations (without loss of benefits and full relocation expenses); and, the
employer was ordered to compensate the union for organizing expenses at the new locations
and to provide the union with information relevant to organizing employees.
33 National Bank of
Canada v. Retail Clerk's Int'l Union (1984), 9 D.L.R. (4th) 10 (S.C.C.). There, the
employer closed one of its bank branches and transferred work to a non-union branch
following certification of a union. The Supreme Court of Canada upheld the remedy of
automatic certification at the new branch and other aspects of the Board's remedial order.
With respect to the trust fund and the written pledge, one justice called these ?clearly
punitive in nature … the Canada Labour Relations Board has no power to impose
punitive measures. This type of penalty is totalitarian.…"
34 See Peter G.
Bruce, "State Structures and Processing of Unfair Labor Practice Cases in the United
States and Canada," in Jane Jenson and Rianne Mahon, eds., The Challenge of
Restructuring: North American Labor Movements Respond (1993), at 180.
35 See Seeking a
Balance: Canada Labour Code Part 1 Review, Ministry of Labour Task Force (1996), at 187.
Using this report, the federal government in November 1996 proposed amendments to the
Canada Labour Code that would streamline and accelerate unfair labor practice proceedings.
A new Canada Industrial Relations Board (CIRB) would replace the CLRB. This new,
tripartite Board would be made up of a neutral chair and vice chairs, and equal numbers of
members representing labor and management.
36 The Secretariat's
preparation of this section of the report draws on two legal memoranda supplied to the
Secretariat for this purpose: "Effects of Sudden Plant Closings on the Principle of
Freedom of Association and the Right of Workers to Organize in Mexico," by Nestor de
Buen Lozano and Carlos de Buen Unna, and "Trade Union Effects of Plant
Closings," by Arturo Alcalde Justiniani.
37 Information
supplied to Secretariat by the ProcuradurRa Federal de la Defensa del Trabajo of the
Mexican Department of Labor and Social Welfare.
38 See Kevin J.
Middlebrook and Cirila Quintero Ramirez, "Conflict Resolution in the Mexican Labor
Courts: An Examination of Local CABs in Chihuahua and Tamaulipas" (1995), available
from the U.S. National Administrative Office.
39 See Semanario
Judicial de la Federación, época 7A, Tomo XXXIII, p.15, Precedentes: Amparo Directo
6486/68, Unión de Abridores de Ostión, Trabajadores en las Industrias de Empacadores de
Pescado, Mariscos y Productos Similares del Golfo de México, 8 de septiembre de 1971, 5
votos. Ponente: MarRa Cristina Salmorán de Tamaño. Cierre Total de Una Empresa, Demanda
a la Reanudación de Labores en Caso De; Semanario Judicial de la Federación, época 6A,
Tomo LVIII, p. 9, Precedentes: Amparo Directo 3273/56 Moisés CosRo Gómez, 12 de abril de
1962, 5 votos. Ponente: Agapito Pozo. Contrato Colectivo de Trabajo, Terminación, Causas
De; Semanario Judicial de la Federación, época 5A, Cuarta Sala, Tomo CXIX, p. 2528,
Precedentes: Tomo CXIX, p.2528 Alvarez del Castillo Efrén , 3 de julio de 1953, 4 votos.
Contrato de Trabajo, Terminación del Por Cierre Total de la Empresa; Semanario Judicial
de la Federación, Cuarta Sala, época 5A, Tomo CVII, p.1965, Precedentes: Tomo CVII,
p.1965, 14 de marzo de 1951, 5 votos, Tomo CXXV, p.1982, Tomo XCIV, p. 54, Tomo LXXXVIII,
p. 2046. Cierre de Empresas, Con Autorización de la Junta. Despido Injustificado;
Semanario Judicial de la Federación, época 5A, Tomo LXXVI, p. 6207, Precedentes: Tomo
LXXVI, p. 6207 Ojeda Manuel, 28 de junio de l943. Cierre de Negociaciones por
Incosteabilidad; Semanario Judicial de la Federación, época 5A, Tomo LX, p. 4276,
Precedentes: Tomo LXIX, p. 4267, Munos Munoz, Nieves, 17 de septiembre de 1941; Semanario
Judicial de la Federación, época 5A, Tomo LVII, p.1267. Semanario Judicial de la
Federación, época 5A, Tomo XLVII, p.1991, Conflictos de Orden Económico; Semanario
Judicial de la Federación, época 5A, Tomo LVII, p.1768, Juntas, Conflictos Económicos
Ante Las.
40 See Juan B.
Climent, Elementos de Derecho Procesal del Trabajo (Edit. Esfinge, 1989), at 252.
41 The
"bargaining unit" is defined as employees with a sufficient community of
interest to bargain collectively for a single agreement. Managers and supervisors are
excluded from a bargaining unit, and often workers with apparently divergent interests
(professionals and nonprofessionals, for example) are divided into separate units.
42 See U.S.
Department of Labor and U.S. Department of Commerce, Commission on the Future of
Worker-Management Relations, Fact Finding Report (May 1994), at 82.
43 Whether or not a
genuine impasse exists when an employer unilaterally implements its last proposal is often
the subject of unfair labor practice charges of failure to bargain in good faith.
44 In the United
States and Canadian provinces that normally hold representation elections, statutes or
judicial doctrines permit the labor authorities to certify a union without an election or
in spite of election results when the employer's unfair labor practices make a fair
election impossible. In the United States, the union must have attained majority support
before its majority was destroyed by employer conduct. In Canada, it is generally not
necessary to have obtained a majority.
45 Many analysts
attribute the diverging proportion of union representation in Canada (more than 30
percent) and the United States (less than 15 percent) in part to this key difference in
labor law. See Gary N. Chaison and Joseph B. Rose, "Continental Divide: The Direction
and Fate of North American Unions," in Advances in Industrial and Labor Relations,
Sockell, Lewin and Lipsky, eds. (1991); Richard Freeman, "On the Divergence in
Unionism among Developed Countries," National Bureau of Economic Research Working
Paper no. 2817 (1989); Paul Weiler, "Promises to Keep: Securing Workers' Rights to
Self-Organization under the NLRA," 96 Harvard Law Review 1769 (1983).
46 An extensive
analysis of the union registration system in Mexico is available in a special study by a
group of independent experts commissioned by the National Administrative Office of Mexico
in connection with ministerial consultations following U.S. NAO Public Communication 94003
(the Sony case). See "Estudio del Grupo de Expertos Independientes" in Consultas
Ministeriales: Registro de asociaciones sindicales (March 1996).
47 Article 123 of the
Constitution grants jurisdiction over FLL enforcement to the states, with the exception of
22 industrial sectors that remain under federal jurisdiction, and enterprises operating in
two or more states. The specified private sector industries that remain within federal
jurisdiction are contained in Table 4.
48 Informes de
Labores de la Secretaria del Trabajo y Prevision Social (STPS), 1989–1994.
49 Data on federal
private sector employment and union membership were obtained by the Secretariat from the
General Coordination of Labor Statistic of STPS.
50 See STPS/INEGI,
1995 National Employment Survey.
51 It should be noted
that the same phenomenon, called "raiding," occurs in Canada and the United
States as well, although it is relatively rare now (in decades past it was more common as,
for example, when the American Federation of Labor [AFL] and the Congress of Industrial
Organizations [CIO] were separate, rival federations). The relevant authorities in all
three countries conduct votes to determine workers' preference.
52 Estadisticas
Laborales, Segundo Semestre, STPS, Subsecretaria "B" at 123.
53 The voting method
is not specified in the statute or by regulations. It may or may not be by secret ballot.
54 The period studied
covered the last 3 months of 1986 and the first 10 months of 1993. Thus, the time frame
for the study is 7 years and 1 month.
55 In one of the four
cases, the court found that the employer closed the facility for a discriminatory,
anti-union motive, but found further that the employer would have closed for legitimate
business purposes at a later date. The court awarded back pay to affected workers up to
the date that the facility would have been closed in the normal course of business, but it
ruled that the employer did not have to reopen and rehire the workers.
56 Many of the
closing cases also involved threats. They were counted as closing cases only. Many of the
threat cases involved both types of threats (full or partial closing). All were counted as
threats of full closing. Note that in some of these cases the court found in favor of
employers on nonplant closing issues, such as individual discharge cases, or remanded the
case to the NLRB for further findings or to adjust the remedy.
57 For purposes of
compiling reversal rates, the study here (in contrast to the foregoing) counted cases that
involved both closing and threats of closing as separate cases.
58 This rate of
reversal (14.8 percent, or 7 of 48 instances) is consistent with Professor Brudney's
findings in his review of all court decisions on NLRB appeals that the courts reversed the
Board more frequently on remedy issues than on liability issues. See James J. Brudney,
"A Famous Victory: Collective Bargaining Protections and the Statutory Aging
Process," 74 North Carolina Law Review 939 (1996).
59 Of the 319 cases,
30 were also part of the federal court case survey. This figure is not double counting.
The Secretariat is looking overall at how such cases are handled at two different levels
of the legal system, one dealing with court decisions on plant closing cases, and one
dealing with Board decisions.
60 In its 1995 fiscal
year, the NLRB closed 23,862 unfair labor practice cases involving charges against
employers. In these cases, 8,175 charges were withdrawn, 6,213 were dismissed, and 8,870
were settled. A complaint was issued by the regional director in 3,271 cases, and 450
cases were decided by an ALJ. A total of 356 unfair labor practice cases against employers
were closed by a Board decision. It must be noted that these are not necessarily the same
cases. Many of the NLRB decisions involve cases filed in earlier years. However, tracking
individual cases across years was not possible in the time frame of this report. In any
event, the yearly case handling totals reflect Board experience over time.
61 This phase of the
research involved physical review of thousands of case files in the regional offices
because files are not separate by subject matter to allow immediate access to plant
closing or threat cases. The research also required assistance, which was graciously
provided, by the staff of the Forth Worth and Milwaukee regional offices, both in
obtaining case files and in further searching records for the ultimate disposition of the
plant closing and threat cases.
62 It is impossible
to know the full reasons for withdrawal or dismissal of an unfair labor practice charge.
Such action might indicate a case with weak evidence or one with strong evidence. It might
indicate that the parties reached a substantive settlement without need for further Board
involvement and agreed to withdraw the charge or to request the Board to dismiss the
charge.
63 Similarly, it is
not possible to ascertain the relative merit of cases settled before dismissal or the
motivations of the parties in deciding to settle the cases.
64 To put this
suggested, sample-based finding in perspective, it should be kept in mind that for all
unfair labor practice charges filed before the NLRB, only 2 percent—not 10
percent—reach the level of an ALJ decision. That is, this is a relatively modest
finding, one that confirms the importance of the sample research in the regional offices.
Otherwise, one might use a factor of 50, not 10, to estimate the volume of plant closings
and threats of closing for each case initiated that ultimately reaches the stage of a
written decision.
65 In union
organizing campaigns in which plant closings or threats of closing halt the campaign
before it ever gets off the ground, a union may have no interest in filing charges,
preferring to seek more fruitful organizing opportunities. Also, filing ULP charges
requires supporting evidence in the form of sworn statements by workers, who may be
reluctant to come forward when the campaign has been discontinued. For other practical
reasons including litigation costs, litigation delays, staff organizers' time, staff
attorneys' time, difficulty in obtaining witnesses and so on, many unions make a simple
strategic decision to forego filing charges, hoping the campaign might be revived later.
66 Recall that the
review of federal court decisions covered a 7-year period, and the review of NLRB cases
covered a 5-year period. Time and resource constraints required a telescoping of time
periods examined as the volume of cases and organizing campaigns multiplied.
67 See NLRB v.
Village IX, Inc., 723 F.2d 1360 (7th Cir. 1983).
68 See Roblaw
Industries, Inc., and International Brotherhood of Teamsters, Complaint in Case No.
12-CA-17901 (1995), and Settlement Agreement (October 23, 1995) on file with NLRB Region
12.
69 See Contec
Division, SPX Corp. and UAW, 320 NLRB No. 52 (1995).
70 See ITT Automotive
and United Auto Workers, decision of Judge Marion C. Ladwig, NLRB Division of Judges,
JD-79-96 (1996).
71 See NLRB v.
Champion Laboratories Inc., CA 7, No. 95-2433 (October 24, 1996).
72 See
Hunter-Douglas, Inc. v. NLRB, 804 F.2d 808 (1986).
73 See Texas Electric
Steel Casting Co. and United Steelworkers, decision of Judge James S. Jensen, NLRB
Division of ALJs, JD (SF)-19-94.
74 See Cable-Masters,
Inc., and Communications Workers of America, 307 NLRB No. 139 (1992).
75 See America's Best
Quality Coatings Corp. and Staff Right, Inc., Joint Employers, and United Electrical
Workers, 313 NLRB No. 52 (1993).
76 See General
Electric Company and United Electrical, Radio, and Machine Workers of America (UE), 321
NLRB No. 86 (1996).
77 These cases were
obtained through Quicklaw (a legal database) searches, through review of the major
Canadian texts touching on unfair labor practices, and through direct contact with the
labor board and tribunals in each jurisdiction.
78 The provincial
differences noted here might also lend themselves to further research into, for example,
why the three largest provinces—Quebec, British Columbia, and Ontario—range from
the smallest number of reported cases to the greatest number, with one at the midpoint
between the extremes.
79 As shown above in
U.S. cases, a sizeable majority (57 of 89 court cases, and 210 of 319 Board cases) involve
threats rather than closings.
80 Recall that in
Quebec, the labor relations law is administered first by a Labor Commissioner of the
provincial labor ministry. Appeals from commissioners' decisions go to the Labor Tribunal,
a judicial branch entity. Thus, the single Quebec case is a court decision, as distinct
from a labor board decision.
81 In U.S. cases
reviewed for this report, employers were found liable for unlawful conduct in 94 percent
of the federal court decisions and 89 percent of the NLRB decisions.
82 On a number of
occasions, reinstatement of an entire bargaining unit was ordered following the
subcontracting or movement of a unit's work. Reinstatement was ordered in cases where
layoffs of union members or organizers were related to the closing threat.
83 While the
decisions of several labor boards in Canada have suggested that they have the capacity to
order an employer to resume operations, no board has actually done so, and many have
expressed concern about the practicality of such an order.
84 The employer was
provided the option of not resuming operations but of maintaining the employees' wages and
benefits as if they were employed throughout that 8-month period.
85 See American
Airlines, Inc. v. Brotherhood of Railway, Airline, and Steamship Clerks (1981), 3
C.L.R.B.R. 90 (C.L.R.B., Foisy, Vice Chair).
86 See UEW, Local 504
v. Westinghouse Canada, Inc. (1980), 80 C.L.L.C. 16,053 (O.L.R.B.); upheld on judicial
review Westinghouse Canada, Inc. v. UEW, Local 504 (1980), 80 C.L.L.C. 14,062 (Ont. Div.
Ct.).
87 See National Bank
of Canada v. Retail Clerks' International Union (1984), 9 D.L.R. (4th) 10 (S.C.C.).
88 See British
Columbia Government and Service Employees' Union v. Humanacare Counselling, unreported,
November 30, 1995, (1995) B.C.L.R.B. 292–39.
89 See United Food
and Commercial Workers, Local 175 v. Insurance Courier Services (1993), 18 C.L.R.B.R. (2d)
286.
90 See United
Steelworkers of America and Wal-Mart Canada, Inc., Ontario Labour Relations Board, nos.
0387-96-R, 0453-96-U, February 10, 1997. See also Paul Waldie and Marina Strauss,
"Windsor Wal-Mart Wins Right to Union: Firm Intimidated Staff, Board Rules," the
Globe and Mail, February 11, 1997; Robyn Meredith, "Despite Election, a Wal-Mart Goes
Union in Canada," the New York Times, February 18, 1997, at C3; "Wal-Mart
Canadian Unit to Appeal Labor Ruling," the Wall Street Journal, March 28, 1997, at
A13.
91 The Federal CAB
publishes quarterly La Gaceta Laboral, which includes new legislation and significant FCAB
decisions.
92 In Mexico, the
term "local" refers to state government. The examination of case files required
the physical review of thousands of pages of records in CAB offices to extract those
dealing with plant closing issues.
93 The
"collective conflict" procedure is not limited to plant closings. It applies to
several common types of labor disputes in Mexico.
94 Article 33 of the
FLL provides that "any agreement or liquidation must be written and contain an
account of the factual circumstances that motivates it and of the rights addressed in it.
It shall be ratified by the CAB, which shall approve it as long as it contains no
renunciation of the rights of the workers." Article 34 provides that such an
agreement may not diminish benefits already accrued by the workers, and may not single out
individual workers for differential treatment.
95 Information
obtained from IMSS sources by Secretariat staff.
96 For U.S. and
Canadian readers of this report, the importance of severance pay in the Mexican system
cannot be overstated. All workers are entitled to severance pay when they lose their jobs,
unless they are discharged for one of the 15 specified acts of misconduct in Article 47 of
the Federal Labor Law (falsifying an application, sabotage, insubordination, excessive
absenteeism, etc.) There is no unemployment insurance system in Mexico, so the immediate
provision of severance pay, in the highest possible amount, becomes of paramount interest
to workers, both in individual discharge cases and in plant closings. In actual practice,
negotiating over severance pay is the most common activity of labor lawyers in Mexico,
first, because it is a statutory benefit for all workers so there is a high demand for
legal assistance, and second, because workers usually prefer to get the best possible
severance pay settlement now than to be tied up in legal proceedings for months or years
before their case is decided by the CAB. (Conscious of their own limited resources and
time, the CABs themselves normally press the parties to reach a private settlement for
severance pay.) Workers' attorneys are entitled to a percentage of the total severance
amount, which creates an incentive for them to get a settlement quickly but at the highest
possible amount. In a general context of economic crisis where plant closings are
frequent, workers realistically understand that using the "collective conflict"
mechanism to try to keep a plant open is futile, so they turn instead to the
"voluntary termination" route for faster resolution and higher severance pay.
97 Case files were
reviewed by Dr. Juan Jose RRos Estavillo as part of the empirical study noted earlier. The
Secretariat also received anecdotal information on plant closings in newspaper articles on
the subject, which are available along with other information from external consultants
and contractors.
98 The Volkswagen
affair was a cause celebre in Mexico labor circles, giving rise to widespread commentary,
analysis, and controversy. Many observers argued that the plant closing was an artificial
device to eliminate militant unionists, thus interfering with their freedom of
association. See, for example, Ludger Pries, "Volkswagen: Un Nudo Gordiano
Resuelto?" 9 Trabajo 7 (1993). As indicated here, the labor authorities found that
the closing was lawful.
99 Displacement
includes workers who lost their jobs because their plant or company closed or moved, their
position or shift was abolished, or there was insufficient work.
100 This term
includes plant and company shutdowns as well as plants and companies moving to another
location.
101 This roughly
mirrors the general rate of unionization in the United States.
102 "Displaced
Workers: Trends in the 1980's and Implications for the Future," Congressional Budget
Office, Congress of the United States, February 1993.
103 Picot, Garnett,
Zhengxi Lin &Wendy Piper, "Permanent Layoffs in Canada: Overview and Longitudinal
Analysis," Business and Labour Market Analysis, Statistics Canada, May 1996.
104 Information
obtained from IMSS sources by Secretariat staff.
105 See UFCW Local
751 v. Brown Group, Inc., ___ U.S. ___ (May 14, 1996).
106 "Dislocated
Workers: Worker Adjustment and Retraining Notification Act Not Meeting Its Goals"
U.S. General Accounting Office, Washington D.C., February 1993; John Portz, "WARN and
the States: Implementation of the Federal Plant Closing Law" (Paper presented to
Annual Meeting, Midwest Political Science Association, 1992); see also Statement of Kary
L. Moss, Executive Director, Sugar Law Center for Economic and Social Justice, to Senate
Committee on Labor and Human Resources Subcommittee on Labor, July 26, 1994.
107 H.W. Arthurs et
al., Labor Law and Industrial Relations in Canada, Toronto: Butterworths, 1988.
108 Section 8 of the
OECD Guidelines states that employers should, "while employees are exercising a right
to organize, not threaten to utilize a capacity to transfer the whole or part of an
operating unit from the country concerned … to hinder the exercise of a right to
organize."
109 Paragraph 52 of
the ILO Declaration calls on multinational enterprises not to threaten to transfer all or
part of their operations to other locations "with a view to undermining … the
workers' exercise of their right to organize."
110 See, for
example, Howard Rosen, "Training: Who Gets It; Does It Work?" Competitiveness
Policy Council Working Paper, March 1996.
111 The terms EI and
UI are used interchangeably in this section, both refer to insurance provided to
unemployed workers either under the old Unemployment Insurance system, or under the new
Employment Insurance system.
112 "Industrial
Adjustment Services Program Evaluation," Ekos Research Associates, Inc., for
Employment and Immigration Canada, Ottawa, November 1993.
113 Source: Programa
Nacional de Desarollo 1995–2000, Programa de Empleo, Capacitacion y Defensa de los
Derechos Laborales 1995–2000, Informe de Avance de Ejecucion del Plan Nacional de
Desarollo 1995, Informe de Labores de la Secretaria del Trabajo y Prevision Social
1995–1996. This includes employed workers looking for a better, different or
additional job.
114 Ana Revenga,
Michelle Riboud and Hong Tan, "The Impact of Mexico's Retraining Program on
Employment and Wages," World Bank, WPS 1013 (1992).
115 Secretaria del
Trabajo y Prevision Social, "El Mercado de Trabajo en Mexico, 1970–1992."
116 Ley del Seguro
Social, Instituto Mexicano del Seguro Social, 1997.
117 SAR is an
integrated retirement system for all workers registered in the Mexican Social Security
Institute (Instituto Mexicano del Seguro Social—IMSS) and in the Social Security
System to Public Employees (Instituto de Seguridad y Servicios Sociales de los
Trabajadores del Estado—ISSSTE). Workers receive a deposit equivalent to 2 percent of
their monthly salary in a personal bank account paid by the employer. Those deposits are
not taxed and will pay a real annual rate no less than 2 percent.
