Mexico: government secures agreement on outsourcing regulations with employers’ and unions’ organizations

On 05 April, Mexico’s President Andrés Manuel López Obrador announced that a tripartite agreement regulating outsourcing had been secured, following several months of negotiations between the employers bodies and their closest trade unions, and ending the impasse since November 2020 over the passage of an executive bill (c.f. article No. 12269) banning the practice of outsourcing workers. The bill had previously provoked an outcry from employer organizations.  Three main points have emerged from the agreement, the entire content of which has not yet been fully disclosed: (i) employee profit sharing (reparto de utilidades) will be capped at the equivalent of 3 months’ salary. This point will require changes to art. 127 of the Federal, (ii) while ‘personnel outsourcing’ is still banned, the agreement does authorise outsourcing for ‘the various services involved with the predominant business activity’ of a company, (iii) companies using ‘insourced’ employees will be required to include them on their payrolls within 3 months following the reform’s publication date in the Official Gazette (DOF). The agreement must shortly be sent to the Chamber of Deputies for a vote to be held before 30 April 2021.