Background on the Situation
The Mexican government has urged its US counterpart to exercise “sensible” use of the labor oversight mechanism under the USMCA (United States-Mexico-Canada Agreement) following an adverse ruling in a labor dispute case involving Atento Servicios, a call center company. The Mexican government stated it will comply with the ruling, though it does not agree with it, as it believes its arguments were not adequately considered.
Key Parties Involved
The Secretariat of Labor and Social Prevision (STPS) in Mexico took actions consistent with national legislation and international commitments, acting “in good faith,” according to Marath Bolaños, the head of the department.
The Labor Dispute Case
The case in question involves Atento Servicios S.A. de C.V. (MEX-USA-2024- 31A-01), where workers affiliated with the Mexican Telephone Workers’ Republic (STRM) denounced various violations of their labor rights, including freedom of association.
Previous Panel Rulings
This is the second panel ruling under the USMCA’s Rapid Response Mechanism (RRM), which came into effect in 2021. The first case was decided in favor of Mexico against the San Martín Mine, where it was attempted to apply the RRM to past worker grievances. The panel concluded that it lacked jurisdiction to rule on the denial of workers’ rights.
Mexico’s Stance on RRM
The STPS acknowledged that the RRM has contributed to advancing freedom of association and democratic processes in certain workplaces, despite ongoing challenges. However, they emphasized that for the RRM to remain a legitimate tool, its application must be carried out with balance and in accordance with the principles of good faith and the agreements made by the parties under the USMCA and its procedural rules.
Significance of the August 21 Ruling
The ruling highlights the importance of ensuring substantive rights, not just administrative processes. This includes free and fair elections as well as genuine collective bargaining.
Expanding the Scope of RRM
This decision is crucial as it sets a precedent by broadening the scope of industries subject to review, also known as “covered establishments.” The panel under the USMCA supported the US position to extend the RRM’s reach, determining that any company whose services or goods compete with those of the US can be subject to panels.
Disagreement Over Covered Establishments
Mexico argued that Atento should not be included in a panel because call centers are not listed among the priority sectors in USMCA Annex 31-A. Meanwhile, the US maintained that a covered establishment is any company whose goods or services are exported to the US or directly compete with US businesses, regardless of sector. The three panelists determined that Atento qualified as a covered establishment.
Key Questions and Answers
- What is the dispute about? The disagreement centers on labor rights violations at Atento Servicios, a call center company, specifically the freedom of association as denounced by its workers affiliated with STRM.
- What is the USMCA’s Rapid Response Mechanism (RRM)? The RRM is a labor oversight mechanism under the USMCA that allows for quicker resolution of labor disputes between the US and Mexico.
- Why is Mexico concerned about the RRM’s application? Mexico wants to ensure that the RRM is applied with balance, good faith, and in accordance with USMCA agreements to maintain its legitimacy as a tool for resolving labor disputes.
- What is the significance of the August 21 ruling? The ruling emphasizes the importance of ensuring substantive rights, such as free and fair elections and genuine collective bargaining, rather than just administrative processes.
- How has the scope of RRM been expanded? The ruling broadens the scope of industries subject to review under the RRM, now potentially including any company whose services or goods compete with those of the US.
- What is the disagreement regarding covered establishments? Mexico and the US disagree on whether call centers, like Atento Servicios, should be considered covered establishments under the expanded RRM scope.
