PROTOCOL TO LEGITIMIZE EXISTING COLLECTIVE BARGAINING AGREEMENTS.

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On July 31, 2019, the Ministry of Labor and Social Welfare («STPS» for its acronym in Spanish) published in the Federal Official Gazette, the «Protocol to Legitimize Existing Collective Bargaining Agreements» (the «Protocol»).

The “Protocol” sets forth the rules and procedures that shall be complied with to «legitimize” current Collective Bargaining Agreements that apply in work centers, until the Federal Labor Conciliation and Registration Center is created and enters into force and effects. This in accordance with the recent Labor Reform published on May 1 of this year.

The «Protocol» charges unions with the obligation to give notice to the STPS of the survey to be carried out whereby employees will vote and determine if the majority of them support the existing Collective Bargaining Agreement. The notice will have to include the date and place where the survey will be carried out, providing information related to the union, the company and of the contents of the Collective Bargaining Agreement, including the government body and file number under which it is registered, as well as the total number and list of affiliated employees that will vote.

Although the union is responsible to give notice to the STPS, the company or the employer, will be required to provide the list of employees, as well as any other information that the union may need.

Voting will be done through ballot issued by the STPS, and it must be personal, free willing, anonymous, secret, direct, peaceful, agile and in a secure manner, in the understanding that the employer can only intervene in this process to provide employees with a copy of the Collective Bargaining Agreement (prior to the survey), and an accessible place for the voting process.

In order for the process and result of the survey to be legitimate, such process has to be carried-out in the presence of a labor official or a notary public. This will be at the choice of the union and the latter must give notice to the STPS.

Once the results are out and provided the STPS does not make observations within the following 20 business days, the union holder of the Collective Bargaining Agreement may request to the STPS the corresponding legitimation certificate, which will be delivered, in due course, to the Federal Labor Conciliation and Registration Center.

If the Collective Bargaining Agreement is not supported by the majority approval of the employees, it will be terminated as a matter of law, but the benefits and employment conditions will remain in force for the benefit of the employees.

The legitimation process is independent of the salary and benefits reviews of Collective Bargaining Agreements registered before the Labor Boards.

Mr. Jorge G. De Presno Arizpe, Partner in charge of the Labor and Social Security Area of​​ our Firm, along with the other Associates of our practice group are available to comment in more detail the contents of this newsletter.

SINCERELY

Mexico City, August 5th, 2019.