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NAO: NALC Submission 940001 and 940002: Appendices

Table of Contents


Appendices

  1. Mexican Labor Laws
    1. Constitution
    2. Federal Labor Law
    3. International Law
  2. Implementation of Mexican Labor Laws
    1. Conciliation and Arbitration Boards
    2. Procedures of CABs
    3. Settlement of Disputes
    4. Other Agencies

  1. Mexican Labor Laws

    Mexican labor law guaranteeing workers freedom of association and the right to organize and providing protections against dismissal of workers because of their exercise of the right to organize is based on Article 123 of the Political Constitution of the United Mexican States, adopted in 1917.(17) These Constitutional rights are regulated by Title II and Title VII of the Federal Labor Law (Ley Federal del Trabajo).(18) Mexico has ratified one of the basic Conventions of the International Labor Organization, Convention 87, which grants workers the freedom to associate and protects their right to organize.

    1. Constitution

      The legal framework of Mexican labor law is Article 123 of the Political Constitution of the United Mexican States. Section XVI of Article 123, which guarantees the right of workers to organize, states as follows:

      Both employers and workers shall have the right to organize for the defense of their respective interests, by forming unions, professional associations, etc.

      Section XXII of Article 123 provides protections against dismissal of workers because of their exercise of the right to organize. This Section states, in part:

      An employer who dismisses a worker without justifiable cause or because the worker has entered an association or union, or for having taken part in a lawful strike, shall be required, at the election of the worker, to either fulfill the contract or indemnify him in the amount of three months' wages. The law shall specify those cases in which the employer may be exempted from the obligations of fulfilling the contract by payment of an indemnity.

    2. Federal Labor Law

      The Federal Labor Law (FLL) codifies Mexican labor law. Title II, which deals with labor law applicable to individuals, addresses, inter alia, the dismissal of workers. Title VII of the FLL deals with collective labor relations.

      • Freedom of Association and Right to Organize

        Article 354 of the FLL recognizes the freedom of workers and employers to form associations. Article 357 provides that workers and employers are free to form unions without prior authorization. Article 358 states that no one can be forced to join or not to join a union.

        • Formation of Unions

          Article 356 of the FLL defines a union as "the temporary association of workers or employers for the study, advancement and defense of their respective interests."

          Since no prior authorization is needed to form a union (Article 357), the only requirements in the FLL regarding the formation of unions are those dealing with how many workers are needed to form one and who is eligible for membership.

          • Article 364 states that the formation of a union requires twenty workers in active service.

          • Article 363 states that workers occupying "positions of trust" may not join unions.

          • Article 362 provides that only workers older than 14 years of age can join a union.


        • Recognition of Unions

          In order to be officially recognized, unions must register with the Secretariat of Labor and Social Welfare (Secretaría del Trabajo y Previsión Social, STPS) in instances where the Federal Government has jurisdiction, and with the local CAB in instances where local jurisdiction applies. Registration requires the presentation of the following documents: (1) a certified copy of the minutes of the general meeting at which the union was established; (2) a list of the names of the members and of their employers; (3) a certified copy of the by-laws; and (4) a certified copy of the minutes of the meeting at which the Board of Directors was elected (FLL, Article 365).

          Once the required documents are presented to STPS or a CAB, registration occurs within 60 days unless the registering authority determines that: (1) the purposes of the union do not coincide with those set out in Article 356 ("the study, advancement and defense of the....[rights of workers]"); (2) the union does not have the minimum number of workers established by Article 364 (20 workers); or (3) the union has not submitted all of the documents required by Article 365 (FLL, Article 366).

          Union by-laws must contain the following: (1) the name of the union; (2) its address; (3) its objectives; (4) the time period for which it was established; (5) conditions for membership; (6) obligations and rights of members; (7) causes and procedures for expulsion; (8) procedures for holding meetings; (9) procedures for the election of a board of officers; (10) length of tenure of officers; (11) regulations regarding the management of the assets of the union; (12) form of payment and amount of union dues; (13) dates for presentation of financial statements; (14) rules for liquidating union assets; and (15) other rules approved by the membership (FLL, Article 371).

      • Dismissal of Workers

        Under Mexican labor law, employment contracts may be for a specified job or period, or for an indefinite period; in the absence of express stipulations, the employment contract shall be for an indefinite period (FLL, Article 35).

        Article 46 authorizes a worker or an employer to sever the work relationship for cause without incurring any further responsibility. Other articles of the FLL address specific causes whereby a worker may be subject to dismissal ("rescission") and remedies available to workers who are dismissed, including severance pay ("indemnification").

        • Dismissal for Cause

          Article 47 sets out the specific conditions whereby a worker may be dismissed without further responsibility for the employer:

          • If the worker, or the union which had proposed or recommended the worker, deceives the employer with false certificates or references showing that the employee has ability, competency and faculties that the worker does not possess. This cause for dismissal shall cease to have effect thirty days after the worker started rendering his services;

          • If the worker, during working hours, commits dishonest or violent acts, makes threats, offends or mistreats the employer, the employer's family or the officers or administrative personnel of the enterprise or establishment, unless there is provocation or he acts in self-defense;

          • If the worker commits any of the offenses listed in the preceding paragraph against co-workers and, as a result of such actions, the discipline in the place of employment is altered;

          • If the worker, outside of working hours, commits any of the offenses referred to in the preceding paragraphs against the employer, the employer's family or the officers or administrative personnel, and the offense is of such serious nature that it makes the work relationship impossible;

          • If, during the performance of his work or by reason of it, the worker intentionally causes material damage to the buildings, works, machinery, instruments, raw materials and other things related to the work;

          • If the worker causes serious damage of the kind mentioned in the preceding paragraph, not wilfully but through negligence;

          • If the worker, through negligence or inexcusable carelessness, jeopardizes the safety of the establishment or of the persons in it;

          • If the worker commits immoral acts in the establishment or place of employment;

          • If the worker reveals manufacturing secrets or confidential matters to the detriment of the enterprise;

          • If the worker is absent more than three times within a thirty-day period, without permission from the employer or without reasonable cause;

          • If the worker disobeys the employer or the employer's representative, without reasonable cause, in matters related to the work under contract;

          • If the worker refuses to adopt preventive measures or to follow the established procedures indicated to avoid accidents or illnesses;

          • If the worker comes to work in a state of drunkenness or under the influence of a narcotic or depressant drug, unless there is in the latter case a medical prescription. Before starting work, the worker shall make this fact known to the employer and present the prescription signed by the doctor;

          • A final judgment imposing a prison sentence on the worker, which prevents the worker from fulfilling the employment contract; and

          • Causes similar to those set forth in the preceding paragraphs, of equal seriousness and of similar consequences insofar as the work is concerned.

          Employers are required to give notice in writing to the worker of the date and cause of the dismissal.

        • Remedies

          Article 48 of the FLL grants mandatory reinstatement to dismissed workers who hold permanent jobs. It states:

          The worker may, at his election, request from the Conciliation and Arbitration Board to be reinstated in his job, or to receive an indemnification equal to three months' salary. If the employer fails to show the cause for dismissal in the proceedings, the worker shall be entitled, in addition to whatever the action exercised might have been, to be paid the salaries accrued from dismissal to the effective date of the award.

          According to Article 49, an employer may be exempt from the obligation to reinstate a worker, provided the appropriate indemnification pursuant to Article 50 has been paid, in the following cases: (1) when the worker has been employed for less than one year; (2) when the employer shows before the CAB that the worker, because of the work performed or the characteristics of the job, is in direct and permanent contact with the employer and the CAB considers that a normal relationship is not possible; (3) when the worker is a confidential employee; (4) when the worker is engaged in domestic service; and (5) when the worker is engaged in occasional work.

          The indemnifications provided by Article 50 are: (1) an amount equal to salaries for one-half of the period of service rendered if the employment contract was for a definite period of less than one year; (2) an amount equal to salary for six months for the first year and for twenty days for each subsequent year of service if the employment contract exceeded one year; (3) the salary of twenty days for each year of service rendered if the employment contract was for an indefinite period; and (4) in addition to the indemnification referred to above, an amount equal to three months' salary, plus the salaries accrued from the date of dismissal until the indemnifications are paid.

    3. International Law

      According to Mexican law, international conventions and agreements entered into by Mexico become part of Mexican law upon ratification by the Senate. This applies to Conventions of the International Labor Organization (ILO), provided the conventions do not contravene the principles embodied in Article 123 of the Constitution.(19) Article 6 of the FLL states:

      The laws and treaties entered into and approved in the terms of Article 133 of the Constitution, shall be applicable to the employment relations in all aspects that are beneficial to workers from the effective date of such law or treaty.

      As of June 1, 1993, Mexico had ratified 74 ILO Conventions.(20) In particular, Mexico has ratified Convention 87, "Freedom of Association and Protection of the Right to Organize." Convention 87 was adopted in 1948 by the International Labor Conference, a tripartite body composed of government, employers' and workers' delegates from member States of the ILO. The Mexican Senate's ratification of Convention 87 was published in the Diario Oficial de la Nación on October 16, 1950.(21)

      The aim of Convention 87 is "the right, freely exercised, of workers and employers, without distinction, to organise for furthering and defending their interests."(22) The key provisions of Convention 87 are:

      • Workers and employers, without distinction whatsoever, have the right to establish and to join organizations of their own choosing with a view to furthering and defending their respective interests.

      • Such organizations have the right to draw up their own constitutions and rules, to elect their representatives in full freedom, to organize their administration and activities and to formulate their programs. Public authorities shall refrain from any interference which would restrict this right or impede the lawful exercise of this right.

      • The organizations shall not be liable to be dissolved or suspended by administrative authority.

      • Organizations have the right to establish and join federations and confederations which shall enjoy the same rights and guarantees. The Convention also provides for the right to affiliate with international organizations.

      • The acquisition of legal personality by all these organizations shall not be subject to restrictive conditions.

      • In exercising the rights provided for in the Convention, employers and workers and their respective organizations shall respect the law of the land. The law of the land and the way in which it is applied, however, shall not impair the guarantees provided for in the Convention.

  2. Implementation of Mexican Labor Laws

    Mexican labor law is of the competence of the federal government and applies throughout the entire nation. Neither the states nor the Federal District have the power to issue labor legislation.(23) Pursuant to Section XXXI of Article 123 of the Mexican Political Constitution, implementation of labor law is under the purview of state authorities in their respective jurisdiction. However, matters involving work arrangements related to conflicts that affect two or more states; collective contracts which are declared to be binding in more than one state; training; occupational safety and health; or the following industries fall exclusively within the federal jurisdiction:

    • Textiles;

    • Electricity;

    • Cinematography;

    • Rubber;

    • Sugar;

    • Mining;

    • Metals and steel, including the mining, processing and smelting of basic minerals, and the production of iron and steel and finished products from iron and steel;

    • Hydrocarbons;

    • Petrochemicals;

    • Cement;

    • Lime;

    • Automobiles and parts;

    • Chemicals, including pharmaceuticals and medications;

    • Cellulose and paper;

    • Oils and vegetable fats;

    • Packed, canned or packaged foods;

    • Bottled or canned beverages;

    • Railroads;

    • Wood products, including saw mill products, plywood and particle board;

    • Flat glass and glass bottles; and

    • Tobacco processing and manufacturing.

    • Federal jurisdiction also applies to matters regarding the following enterprises:

    • Those that are under direct or indirect administration by the federal government;

    • Those that operate pursuant to a federal contract or grant and related industries; and

    • Those that operate in federal zones or areas under federal jurisdiction, in territorial waters or within the exclusive economic zone of the nation.

    1. Conciliation and Arbitration Boards

      Disputes between labor and management in Mexico are the purview of a system of Conciliation Boards (Juntas de Conciliación) and Conciliation and Arbitration Boards (Juntas de Conciliación y Arbitraje). Section XX of Article 123 of the Mexican Political Constitution states:

      Differences or disputes between capital and labor shall be subject to the decisions of a Conciliation and Arbitration Board, consisting of an equal number of representatives of workers and employers, with one from the government.

      Among the labor-management disputes subject to the auspices of Conciliation Boards and Conciliation and Arbitration Boards are those related to freedom of association and dismissal of workers.

      Section XXI of Article 123 compels employers to use the CABs to resolve disputes and to accept awards made by CABs. This Section states:

      If an employer refuses to submit his differences to arbitration or to accept the decision rendered by the Board, the labor contract shall be considered terminated and he shall be obligated to indemnify the worker the amount of three months' salary in addition to any liability resulting from the dispute...

      Conciliation Boards have limited scope and are not permitted to sit as adjudicative bodies. Jurisdiction between local and federal Conciliation Boards or Conciliation and Arbitration Boards is determined on the basis of subject matter (see above).

      • Federal Conciliation and Arbitration Boards

        The Federal Conciliation Boards (Juntas Federales de Conciliación, FCBs) and Federal Conciliation and Arbitration Boards (Juntas Federales de Conciliación y Arbitraje, FCABs) are regulated, respectively, by Chapters X and XII, Title Eleven, of the FLL.

        FCBs consist of three members: a representative from government, appointed by the Secretariat of Labor and Social Welfare, who will act as President; and a representative each from organized labor and from employers (FLL, Article 593). In addition to promoting the resolution of labor disputes, the main duties of the FCBs include receiving claims and forwarding them to Special Boards or to FCABs; gathering evidence that workers or employers intend to bring before FCABs; acting as FCABs in instances where benefits involving less than three months' salary are involved; and assisting the FCABs in the performance of their duties (FLL, Article 600).

        The FCAB consists of representatives from government and from workers and employers, with the latter representing different sectors of the economy (FLL, Article 605). The President of the FCAB is appointed by the President of the Republic (FLL, Article 612). According to Article 604, the FCAB "shall hear and resolve labor conflicts between workers and employers, or among workers only, or employers only, which derive from labor relations or from events closely associated with such relations." The FCAB may operate as a Committee of the Whole or establish Special Boards to deal with specific issues.

      • Local Conciliation and Arbitration Boards

        Local Conciliation Boards (Juntas Locales de Conciliación, LCBs) and Local Conciliation and Arbitration Board (Juntas Locales de Conciliación y Arbitraje, LCABs) are regulated, respectively, by Chapters XI and XIII, Title Eleven, of the FLL.

        LCBs operate in each state of the nation, as determined by the Governor of each state (FLL, Article 601). The functions of LCBs are the same as those of the Federal Conciliation Boards (FLL, Article 603). Similarly, LCABs function in each state of the nation to deal with labor conflicts that are not subject to federal jurisdiction (FLL, Article 621). LCABs are subject to the same rules, and have the same functions, as the Federal Conciliation and Arbitration Boards (FLL, Article 623). The President of the LCABs is appointed by the Governor of each state (FLL, Article 623).

    2. Procedures of CABs

      CABs do not intervene in labor disputes unless requested to do so by the complaint of a plaintiff. Workers seeking the intervention of CABs in complaints against an employer alleging denial of freedom of association and dismissal without cause must begin their case by filing a written document with the appropriate CAB (FLL, Article 871). In addition to laying out the facts of the case, the petition may be accompanied by supporting evidence (FLL, Article 872). Within 24 hours of receipt of a petition, the Full CAB or a Special CAB will announce the date and time for holding a conciliation hearing--which must be within 15 days of the filing of the petition--and notify all of the parties at least 10 days in advance of its occurrence; the CAB will also make available a copy of the petition to the defendant (FLL, Article 873).

      Hearings before CABs consist of three stages: (1) conciliation; (2) arguments; and (3) presentation of evidence. All three stages take place consecutively, typically within the same business day.

      • Conciliation

        The strong preference of the drafters of the FLL for conciliation and negotiated resolution of disputes is evident in this stage of the CAB hearings, which are conducted by Conciliation Boards (FLL, Article 876):

        • parties are required to appear in person, "without attorneys, advisers, or proxies";

        • the Board will promote dialogue between the parties and encourage them to reach a settlement;

        • if the parties reach an agreement, the conflict is deemed to be terminated; after approved by the Board, the agreement shall have the legal force of an award; and

        • the parties are given the opportunity to request the suspension of the hearing in order to work out a settlement; the Board can grant the suspension only once and for up to eight days.

        Only if these efforts at conciliation are unsuccessful will the hearing move into the next stage. Failure of one of the parties to attend the conciliation stage is deemed as an unwillingness to reach an agreement and the case is moved to the next stage.

      • Arguments

        Upon being notified by the Conciliation Board that its efforts to reach an agreement have been unsuccessful and receiving documentation to this effect, the CAB summons the parties to a hearing to present their arguments (FLL, Article 877). At the hearing, the President of the CAB again urges the two parties to settle their differences; if this call for conciliation is unsuccessful, the two parties proceed to make their arguments (FLL, Article 878):

        • the plaintiff has an opportunity to present his or her case, amending it as appropriate from the time the original complaint was filed;

        • the defendant is similarly given the opportunity to reply to the plaintiff's arguments either orally or in writing; the defendant is instructed to address each of the allegations made by the plaintiff; and

        • parties have a brief opportunity to cross-examine each other.

        The conclusion of the arguments stage leads into the presentation of evidence stage. If the parties concur on the facts of the case and the only differences relate to matters of law, the process is ended without going through the presentation of evidence stage.

        The arguments stage takes place even if one of the two parties is not in attendance. If the plaintiff is absent, his or her arguments are limited to those that were presented in the original complaint. Failure of the defendant to appear is construed as acceptance of the facts contained in the plaintiff's complaint, although "without prejudice to showing during the presentation of evidence stage that the plaintiff was not a worker or an employer, that there was no dismissal, or that the facts alleged in the complaint are untrue" (FLL, Article 879).

      • Presentation of Evidence

        The last stage in the hearing conducted by the CAB is the presentation of evidence. The plaintiff is first allowed the opportunity to present evidence supporting his or her complaint; the defendant is also allowed an opportunity to introduce evidence rebutting that presented by the plaintiff. Counter-arguments can occur (FLL, Article 880). Immediately following, the CAB rules on which evidence is admissible, the CAB hears the evidence and issues a ruling (laudo or award) (FLL, Article 889).

        Decisions of CABs are final and are fully enforceable by them. The Presidents of the CABs act as enforcement authorities of CAB decisions and as such decide which are the best enforcement measures to ensure execution of their decisions (FLL, Article 940). Under some circumstances, the President of a CAB has the authority to garnish property of a defendant to guarantee payment of an award.

        The constitutionality of CAB decisions is subject to review by the Federal District Courts, Federal Courts of Appeal, and the Mexican Supreme Court. The procedure for appealing an award requires that the appellant's brief be submitted to be CAB in question, with copies for members of the CAB and for each party involved in the conflict. The CAB, in turn, sends copies to the Federal Court of Appeals. If the Court considers that the plaintiff-worker will not be able to support himself or his family needs while the appeal is proceeding, the defendant may be ordered to pay the plaintiff whatever the appellate court considers necessary as support during the appeal process. When the appellant is from labor, the Court of Appeals is bound by Article 76 of the Law of Appeals (Ley de Amparo) and must correct deficiencies in the appellants' brief including a review of the record and even possibly rewrite the appellant's arguments.(24)

    3. Settlement of Disputes

      The thrust of Mexico's system of labor-management relations is to seek resolution of disputes through conciliation. As has been described above, the system favors negotiated settlements between the parties rather than protracted procedures before CABs. Over the period from November 1, 1992 to October 31, 1993, 67,112 out of 72,557, or over 92 percent, of complaints accepted by FCABs were resolved through conciliation.(25)

      • Role of CABs in Settlements

        In principle, CABs do not intervene in a dispute unless requested to do so by a complaining party. The main responsibility of CABs in negotiated settlements regarding dismissals is to ensure that the proper severance is paid to the worker. In order for a settlement to be valid, it must be approved by a CAB.

        The right of workers to severance payments cannot be renounced. Article 33 of the FLL states:

        A workers' waiver of accrued salaries, indemnifications, and other benefits derived from services rendered is null and void, whatever its form or designation may be.

        In order to be valid, every agreement or settlement of account shall be in writing and shall contain a detailed statement of the facts which give rise to it and of the rights included therein. It shall be ratified before the Conciliation and Arbitration Board, which shall approve it, provided that it does not contain an waiver of the rights of the workers.

        Thus, the Presidents of the CABs are required to monitor severance payments, ensuring that the rights of workers are not being voided and workers receive, directly, the full amount of the severance payments that is due them. Article 949 of the FLL directs the President of the CAB to ensure that severance payments are made directly to the worker entitled to the payment.

      • Settlements in Dismissal Cases

        In 1993, the FCABs (including special boards in the Federal District) handled 17,044 individual complaints, of which 8,068 (47 percent) involved charges of unjustified dismissal.(26) According to statistics provided by the Mexican NAO, the vast majority of disputes involving dismissal for cause that are resolved in favor of workers are settled through the payment of severance rather than through reinstatement. Specifically, the Federal Conciliation and Arbitration Boards of the Federal District ruled in favor of workers in 2,220 cases of dismissal for cause during the 17-month period from January 1993 through May 1994. Eighty-five percent of the workers opted for severance pay, while 15 percent chose to be reinstated.

    4. Other Agencies

      In addition to the CBs and CABs, other agencies of the Government of Mexico have responsibility for enforcing aspects of labor law. These agencies, and the area of responsibility of each, are:(27)

      Secretaría del Trabajo y Previsión Social (Secretariat of Labor and Social Welfare, STPS)--Responsible for the application of Article 123 of the Constitution (including minimum wage, right to strike, etc.) through the FLL and its regulations. Supervises, from an administrative standpoint, the FCABs, the Labor Inspection Department, and the Office of the Labor Public Defenders.

      Secretaría de Educación (Secretariat of Education)--Responsible for enforcing laws and regulations related to employer obligations to train workers and, together with STPS, for training workers.

      Secretaría de Hacienda y Crédito Público (Secretariat of Finance and Public Credit)--Responsible for the administration of the mandatory profit sharing provisions of the FLL.

      Procuraduría de la Defensa del Trabajo (Office of the Labor Public Defenders)--Responsible for providing workers with counsel before any authority in matters related to the enforcement of labor law and regulations. They file for ordinary or special proceedings for the defense of individual workers or unions, propose to interested parties ways to solve disputes, and formalize settlements between workers and management.

      Departamento de Inspección del Trabajo (Labor Inspection Department)--Responsible for overseeing compliance with labor laws and regulations, including making workers and management aware of the laws and regulations, and giving notice regarding violations of labor law. In particular, the Labor Inspection Department is responsible for compliance with worker safety and health laws and regulations.

      Servicio Nacional de Empleo, Capacitación y Adiestramiento (National Employment and Training Service)-- Responsible for analyzing labor markets, encouraging the employment of workers, and promoting and supervising the training of the workforce.

      Comisión Nacional de Salarios Mínimos (National Minimum Salaries Commission)--Responsible for setting minimum salaries for different occupations and areas of the country.

      Comisión Nacional para la Participación de los Trabajadores en las Utilidades de las Empresas (National Commission for the Distribution of Corporation Net Profits to Workers)--Responsible for overseeing the allocation of net profits of corporations to workers, as required by the FLL.

      Jurado de Responsabilidades (Jury of Responsibilities)--Responsible for investigating and sanctioning members of the CABs for inefficiency or wrongdoing.

      State Secretariats of Labor carry out the functions of the STPS for matters under state jurisdiction.


Footnotes

17. "Artículo 123 Constitucional," reprinted in Secretaría del Trabajo y Previsión Social, Ley Federal del Trabajo, 9th Edition (México, 1992), pp. 9-20.

18. The first Federal Labor Law took effect in 1931; it was modified numerous times over a 30-year period and superseded by a new Federal Labor Law in 1970. The latter legislation has also been modified frequently. The most recent major revision of the FLL was done in 1980.

19. Néstor de Buen L., Derecho del Trabajo, Seventh Edition (México: Editorial Porrúa, 1989), Volume 1, p. 416.

20. International Labour Conference, 80th Session, 1993, Lists of Ratifications by Convention and by country (as at 31 December 1992), Report III (Geneva: International Labour Office, 1993), p. 241 and addendum updating the information through June 1, 1993.

21. Néstor de Buen L., Derecho del Trabajo, Seventh Edition (México: Editorial Porrúa, 1989), Volume 1, p. 418.

22. International Labour Office, Summaries of International Labour Standards, Second edition (Geneva: International Labour Office, 1991), p. 5.

23. Francisco Breña Garduño, Mexican Labor Law Summary (México City: Breña y Asociados, 1991), p. iv.

24. Labor Law Enforcement in Mexico, op. cit., pp. 31-32.

25. Secretaría del Trabajo y Previsión Social, Informe de Labores, 1992-1993 (Mexico, STPS, 1993), p. 63.

26. Questions on Labor Law Enforcement in Mexico, op. cit., p. 26, based on information from STPS.

27. Labor Law Enforcement in Mexico, op. cit., pp. 22-23; and Questions on Labor Law Enforcement in Mexico, op. cit., pp. 26-29.