Glossary of Mexican Labor Law Terms

Introduction

This glossary defines key terms in Mexican labor law, drawn from the Federal Labor Law (LFT) and Article 123 of the Constitution. These terms are essential for understanding individual and collective labor relations in Mexico.

Key Terms

Contrato Colectivo de Trabajo: Collective bargaining agreement. An agreement between a union (or coalition of workers) and an employer governing terms and conditions of employment for a group of workers. Must be registered with the Federal Center for Labor Conciliation and Registration.

Sindicato: Labor union. An organization of workers formed to protect their professional interests. Unions must be registered and comply with democratic governance requirements under the 2019 labor reform.

Huelga: Strike. A lawful suspension of work by a group of workers to pressure an employer to meet demands. Must meet procedural requirements, including strike notice and majority support.

Juntas de Conciliación y Arbitraje: Conciliation and Arbitration Boards. The former labor dispute resolution bodies, replaced by specialized labor courts under the 2019 labor justice reform.

Reparto de Utilidades: Profit sharing (PTU). The mandatory distribution of 10% of a company’s pre-tax profits to employees, governed by the LFT. The amount is capped at three months’ salary or the average of the last three years.

Patrón: Employer. A natural or legal person who employs the services of one or more workers under an employment relationship.

Salario Mínimo: Minimum wage. The legally mandated minimum compensation for work, set annually by the National Minimum Wage Commission (CONASAMI).

Aguinaldo: Christmas bonus. A mandatory annual payment equivalent to at least 15 days’ wages, payable before December 20.

Jornada de Trabajo: Work shift or working hours. Maximum eight hours for day shifts, seven hours for night shifts, and seven and a half hours for mixed shifts.

Despido Injustificado: Unjustified dismissal. Termination of employment without cause recognized by law, entitling the worker to constitutional reinstatement or indemnification.

Relación de Trabajo: Employment relationship. The legal relationship between employer and employee, defined by personal service, subordination, and remuneration.

Capacitación: Training. The employer’s obligation to provide workers with training to improve their skills and productivity.

Contratación Colectiva: Collective bargaining. The process by which unions and employers negotiate collective agreements.