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RR RUEHCD RUEHGA RUEHGD RUEHHA RUEHHO RUEHMC RUEHMT RUEHNG RUEHNL
RUEHQU RUEHRD RUEHRS RUEHTM RUEHVC
DE RUEHME #2176/01 1981520
ZNR UUUUU ZZH
R 161520Z JUL 08
FM AMEMBASSY MEXICO
TO RUEHC/SECSTATE WASHDC 2578
RUEHC/DEPT OF LABOR WASHINGTON DC
INFO RUCNCAN/ALL CANADIAN POSTS COLLECTIVE
RUEHXC/ALL US CONSULATES IN MEXICO COLLECTIVE
RHMFIUU/CDR USSOUTHCOM MIAMI FL
RUCPDOC/DEPT OF COMMERCE WASHINGTON DC
RHEHAAA/NATIONAL SECURITY COUNCIL WASHINGTON DC

UNCLAS SECTION 01 OF 04 MEXICO 002176 
 
SIPDIS 
 
DEPT FOR DRL/AWH AND ILSCR AND WHA, DOL FOR ILAB 
 
E.O. 12958: N/A 
TAGS: ELAB ECON PGOV PHUM PINR MX
SUBJECT: AGREEMENT TO IMPROVE LABOR ENVIRONMENT AT STATE 
LEVEL APPEARS TO ACHIEVE SOLID RESULTS 
 
REF: 07 MEXICO 5936 
 
 
¶1.  SUMMARY: In October 2007 the local offices of several 
national labor confederations and the government of Jalisco 
state signed an agreement to reduce the number of threatened 
strikes and the resulting extortion of businesses that was 
damaging the state,s economic competitiveness (reftel). 
Although initially given little prospect for success, the 
agreement has exceeded all expectations and improved the 
state,s labor climate. Ultimately, the problem of fake or 
threatened strikes will require changes in Federal labor law, 
but the successes in Jalisco show that it is sometimes 
possible to find a local &work-around8 for a national 
problem. END SUMMARY. 
 
 
STATE GOVERNMENT AND UNIONS TAKE ON NATIONAL PROBLEM 
--------------------------------------------- -------- 
 
¶2.  Last October, the government of Jalisco and the local 
offices of several national labor confederations signed an 
accord aimed at improving the state,s overall labor climate. 
 The accord, called &The Agreement for Labor Stability8, 
sought to reduce the number of threatened strikes, often 
called by bogus or unscrupulous unions for reasons totally 
unrelated to workplace issues or any form of contract 
negotiations.  According to statements by both state 
government and union officials, Jalisco was facing a 
situation in which the threat of a strike, as opposed to an 
actual strike, was harming the business climate and 
discouraging investment.  Spokesmen for the state,s private 
sector claimed that the threat of a strike was increasingly 
being used by labor unions to extort money from businesses 
that often willingly paid up rather than deal with potential 
labor conflicts or legal problems that might disrupt their 
operations. 
 
¶3.  The agreement was signed on the state government,s side 
by Jalisco,s governor Emilio Gonzalez Marquez and Secretary 
of Labor Ernesto Espinosa Guarro.  The union signatories 
included the state Secretaries General of three of Mexico,s 
better known national labor confederations. The most 
prominent of these was the CTM (Confederation of Mexican 
Workers), Mexico,s largest national labor federation. Next 
in importance was the CROC (Revolutionary Confederation of 
Workers and Peasants), Mexico,s third largest national labor 
federation. (Comment: The CROC is a divided union in Jalisco 
and the faction that signed the agreement represents the 
smaller and weaker portion of the union). The third 
federation was the COR (Revolutionary Workers Confederation), 
one of Mexico,s smallest national level labor organizations. 
 
¶4.  In addition to the three first tier national federations 
the agreement was also signed by the Secretary General of the 
COS (Confederation of Union Organizations).  The COS would 
best be described as a second tier labor organization but it 
has a national presence and, ultimately, it appears to be the 
federation that most fully committed itself to working with 
the Jalisco labor authorities to implement the agreement. The 
head of COS is also currently the leader of the Jalisco 
delegation of the Congress of Labor.  (Note: The Congress of 
Labor is the national umbrella organization for unions and 
represents labor interests in dealings with the GOM.)  Both 
the Jalisco government and the union officials pledged to 
take action to reduce the number of strikes or threatened 
strikes in the state but this phenomenon is very much a 
national problem that initially appeared extremely resistant 
to state level action. 
 
 
THE ROOTS OF THE PROBLEM 
------------------------ 
 
¶5.  Mexico,s constitution guarantees freedom of association 
and the right to strike.  The statutes that codify these 
rights are contained in Mexico,s &Federal Labor Law.8  In 
order to exercise the right to strike, Federal Labor Law 
establishes several administrative prerequisites, the two 
most important being: (1) that only officially recognized and 
properly registered unions can call for a strike and (2) 
before a strike can be considered legal a union must receive 
prior approval of a strike notice from the appropriate labor 
authorities.  There are no provisions in Mexican law for 
 
MEXICO 00002176  002 OF 004 
 
 
state level authorities to suspend these two administrative 
requirements although state labor authorities can adapt their 
implementation in order to conform to local conditions. 
 
¶6.  In Jalisco, as in most other parts of Mexico, the 
unintended consequences of the two above-mentioned 
administrative prerequisites are a shockingly large number of 
filings for approvals of strike notices.  In 2007 Jalisco,s 
labor authorities received a total of 16,524 applications for 
approvals of strike notices.  Of this number only a little 
over 4,000 were finally approved and, of those filings 
approved, less than 200 ultimately resulted in an actual 
strike. 
 
¶7.  Many of the more than 16,000 applications for approval of 
strike notices were attributed to unscrupulous or paper 
unions which exist because of abuses of the constitutional 
guarantee of freedom of association.  Under Federal Labor Law 
a union can be formed with as few as 20 employees. 
Unfortunately, Mexican labor authorities (at both the federal 
and state levels) are often lax when it comes to verifying 
whether the employees of a particular workplace actually 
exist or, if the workers do exist, whether they are aware 
that someone filed for legal status as their union 
representative.  Once a union has been officially recognized, 
whether or not there really are any workers in the union, the 
documents establishing the union can be used to file an 
application for approval of a strike notice. 
 
¶8.  More often than not the simple filing of a request, which 
in Jalisco was then certified with a government seal, was 
being presented to business owners as proof of an approved 
strike notice.  Approved strike notices (or a document 
showing a filed request) were being presented to business 
owners who were then  extorted for money to make the problem 
go away.  The business owner could refuse to pay and risk 
what they believed to be a legally authorized strike but the 
cost of handing over the pay-off was usually less than the 
cost of challenging the legal status of one of these paper 
unions and/or the legality of a strike. 
 
 
THE DETAILS OF THE AGREEMENT 
---------------------------- 
 
¶9. In order to combat the growing problem of paper and 
unscrupulous labor unions using the threat of a strike to 
extort money from businesses the Jalisco agreement committed 
the state government and the unions to: 
 
Work together to reduce the number of strikes statewide; 
 
Verify the legal status of any union filing an application 
for approval of a strike notice. This would entail close 
scrutiny to ensure that recognized unions fully complied with 
the administrative requirements of keeping their 
registrations up to date; 
 
Deny any application for approval of a strike notice that was 
not signed by the union,s Secretary General; 
 
Verify the signature of the union Secretary General on any 
application for approval of a strike notice. 
 
 
DISAGREEMENT ON THE AGREEMENT 
----------------------------- 
 
¶10.  According to press reports at the time, the unions which 
signed the agreement with the government of Jalisco 
represented some 60 percent of all unionized workers in the 
state.  The other 40 percent of Jalisco,s unionized workers 
are represented by the FROC (Federation of Revolutionary 
Workers and Campesinos) and the CROM (Revolutionary 
Confederation of Mexican Workers).  The FROC is the larger 
and stronger portion of the CROC in Jalisco and the CROM is 
affiliated with Mexico,s fourth largest labor federation. 
 
¶11.  The two labor organizations who pointedly refused to 
sign the agreement claimed they did so in order to protect 
worker rights.  In their view, the agreement both attempts to 
supercede the administrative provisions of Federal Labor Law 
and to deny workers their constitutionally guaranteed right 
to strike.  Moreover, spokespersons for these two unions 
 
MEXICO 00002176  003 OF 004 
 
 
opined, the recently signed agreement was no different from a 
similar accord reached several years ago by the previous 
state administration.  That accord provided excellent photo 
opportunities but not much in the way of results, according 
to the dissident unions. 
 
 
THE RULES APPLY TO EVERYONE 
--------------------------- 
 
¶12.  It may well be that the FROC and the CROM believed that 
by not signing the agreement its terms would not apply to 
them.  If that was the case then they were wrong.  During a 
recent meeting with Jalisco Secretary of Labor, Ernesto 
Espinosa Guarro, Mission Mexico Labor Counselor was told that 
in essence the agreement only required full compliance with 
mandates that already existed in Federal Labor Law.  That 
being the case, Espinosa said, his agency immediately set out 
to apply the agreement provisions to everyone whether they 
signed the agreement or not. 
 
 
STATE LABOR OFFICE GET REAL RESULTS 
----------------------------------- 
 
¶13.  According to Labor Secretary Espinosa, before his agency 
could fully apply the terms of the agreement it first had to 
get its own house in order.  This required a massive effort 
to review the Secretariat files to determine which unions had 
kept their registrations up to date and which had not.  Very 
few were in full compliance with relevant federal 
requirements but a significant number only needed to do such 
simple things as providing updated lists of union officers. 
In the process of updating its files Espinosa,s staff 
discovered a shockingly large number of irregularities among 
the Secretariat inspectors responsible for verifying the 
union information on file.  Ultimately, the Secretariat was 
forced to dismiss for cause 22 of the 36 inspectors on staff. 
 One of those fired was the head of the union for Labor 
Secretariat employees. 
 
¶14.  Once the Labor Secretariat reorganized its files and 
began applying the agreement to everyone the results were 
immediate and impressive.  In 2007, prior to the agreement, 
the average number of requests for approvals of strike 
notices averaged 1,755 per month.  After the agreement that 
number dropped to 621 requests for approval per month for the 
remainder of 2007.  The average number of approval requests 
from January to June 2008 is 275 per month.  The total number 
of requests for approval for that same period is 1,768 which 
is almost equal to the average number per month in 2007. 
Prior to the agreement the largest number of requests came 
from such first tier organization as the CTM, CROC and CROM. 
In January 2007 the CTM submitted 627 requests for approval; 
a year later that number dropped to just 14! The CROC and the 
CROM had similar reductions in their request numbers. 
 
 
COMMENT 
------- 
 
¶15.  Given that prior agreements of the type described above 
have produced less than stellar results this newest accord 
did not initially appear to offer much hope for any real 
change.  However, &The Agreement for Labor Stability8 seems 
to be doing just what it was meant to do.  A fair amount of 
the credit for this probably belongs to the new Jalisco 
Secretary of Labor but he told Mission Labor Counselor that 
the agreement might not have accomplished so much so fast 
were it not for such second tier unions as the COS.  The COS, 
Secretary Espinosa said, listened to him when he told all the 
unions that the state had dropped eight places nationally in 
relative competitiveness.  Working closely with his office 
the COS set out to rally support for Espinosa and for the 
agreement among other second tier organizations.  This set an 
example that others soon followed. 
 
¶16.  As previously noted, the roots of the dilemma of threats 
being used to extort money from businesses stem from abuses 
of Federal Labor Law and ultimately it will require changes 
at the federal level to fully address the problem. 
Nevertheless, the unions and the state government in Jalisco 
are showing that it is possible at times to deal locally with 
a national problem.  If this type of agreement can be 
 
MEXICO 00002176  004 OF 004 
 
 
effectively duplicated in other states it could make a real 
difference in labor, management, and government relations in 
Mexico. 
 
¶17. This message was cleared with AmConsul Guadalajara. 
 
 
 
 
Visit Mexico City's Classified Web Site at 
http://www.state.sgov.gov/p/wha/mexicocity and the North American 
Partnership Blog at http://www.intelink.gov/communities/state/nap / 
GARZA