The Mexican Federal Labour Law (FLL) contemplates different ways for the engagement of services:
Pursuant to Article 12 of the FLL, intermediary is the natural or legal person who engages or intervenes in the engagement of another or others for the provision of services to an employer.
The intermediary is not employer of the employee(s) who render the personal, subordinated services and, in consequence, there is no joint liability. The beneficiary of the services is the only one directly responsible for complying with the obligations derived from the law and the services rendered.
On their side, employees will be entitled to (i) render their services under the same conditions and will have the same rights that correspond to the employees who perform similar services for the beneficiary company and (ii) intermediaries will not be able to receive compensation or commission with charge to the employees’ salaries.
II. ALTERNATIVES FOR THE OUTSOURCING OF SERVICES UNDER FLL.
Performing independent tasks or services for a company. Pursuant to Article 15 of the FLL, it is possible to subcontract services not comprised in the beneficiary company’s core business when the subcontractor is able to perform the services on an independent basis, has specialized personnel to perform such duties and sufficient resources of its own to comply with its labour obligations.
If the subcontractor does not have these elements, the beneficiary of the services will be jointly liable with the subcontractor for complying with labour obligations.
Subcontracting of specialized services.
On December 1, 2012, a reform to the FLL became effective. New provisions include Article 15–A, which heightens the regulations on outsourcing with severe implications to many employers. Under the new FLL, “outsourcing” will be defined as follows: “The subcontracting (outsourcing) regime occurs when work is performed or services are rendered through workers hired by and working under a contractor’s control, for the benefit of a customer, whether a legal or natural person, and the customer sets the tasks for the contractor and supervises the contractor in rendering the services or performing the contracted work. This type of work must comply with the following conditions:
- It cannot cover the totality of the activities, whether equal or similar in whole, undertaken at the work centre.
- It is justified due to its specialized character.
- It cannot include tasks equal or similar to the ones carried out by the customer’s workers.
If any or all of these conditions are not met, the customer will be deemed to be the employer for purposes and effects under the Law, including as it applies to obligations related to social security.”
The FLL also establishes new requirements, including that the contract must be in writing and that the customer (or beneficiary of the services) shall ensure that the contractor complies with its obligations under the labour law. It further provides that the subcontracting regime will not allow the transfer of workers from a customer to a contractor, for purposes of undermining any right under the FLL.
The wording of these regulations is ambiguous. Many of these conditions are difficult to determine and impractical in their application. Furthermore, in practice, the proposed outsourcing regulations substantially impact employers, since many of them have a corporate structure depending on service companies to provide specialized functions. In addition, the cost of business also increases for many business groups that have outsourced their entire workforce through service companies, when considering the company’s profit-sharing obligations for an entire group of workers, as opposed to only for those that the company directly employs.
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