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LABOUR-MEXICO: Employment Agencies Multiply, But Regulation Lags

Emilio Godoy

MEXICO CITY, Sep 6 2010 (IPS) - The global economic crisis has taken its toll in Mexico, as elsewhere, leading thousands of people to turn to private employment agencies to find jobs — even though some of their labour rights may be left unprotected.

This country of 107 million people is becoming a haven for companies that offer this form of outsourcing or subcontracting, an issue taken up by the International Labour Organisation’s Convention 181 on private employment agencies, which Mexico has yet to ratify.

Alfonso Bouzas, who specialises in labour issues at the Autonomous National University of Mexico, told IPS that outsourcing has been on the rise in recent years. “It has been quite a useful tool for avoiding labour obligations,” he said.

Convention 181, adopted in 1997 and in force since 2000, establishes that the workers hired by job placement agencies must not be deprived of their rights to organise and take part in collective bargaining.

It is precisely because of these two issues that unions and labour rights defence groups have denounced Mexico for violating ILO Conventions 87 and 98, respectively.

“There is a lack of regulation. The recent reforms refer to tax evasion, but not to labour rights,” Matteo Dean, an expert with the non-governmental Centre for Labour Research and Union Consulting (CILAS), told IPS.

In July 2009, the reforms encompassed in the Mexican Institute of Social Security Law entered into force, requiring “outsourcing” companies to comply with employer obligations, including keeping up with social security contributions.

At least 295 authorised employment agencies operate in Mexico, according to the Secretariat (ministry) of Labour and Social Security.

The member firms of the Mexican Association of Human Capital Companies place some 100,000 workers each month.

The Regulations of Worker Placement Agencies, in place since 2006, cover services such as recruiting, staff selection, and advertising of job openings to connect a worker with an employer, or vice versa.

The companies investigate the labour history of the candidate, conduct the interview, select and connect him or her with an employer, at no charge to the job seeker.

They function based on agreements in which the job seeker obtains a post with the company selected by the agency, which defines the job, the salary and the tasks of the employee, according to an analysis of legislative regulations of outsourcing, published by the congressional Social and Public Opinion Research Centre (CESOP).

The economic crisis that erupted in 2008 in the United States and quickly spread around the globe had erased 900,000 jobs in Mexico by 2009, according to official figures. However, the administration of conservative President Felipe Calderón claims the creation of 630,000 jobs this year.

“They are instances that practically liberate the final beneficiary of all labour responsibility, in exchange for a lucrative income related to a percentage of the salary,” Bouzas explained. He has studied phenomena like protection clauses, through which companies protect themselves from strikes or worker demands.

Outsourcing was on the agenda for the Fourth National Labour Conference, organised by CILAS over the weekend, drawing more than 900 delegates from about 100 union organisations across the country.

The conference also discussed the right to organise and respect for workers’ rights in general, and had some choice words for the Calderón administration.

Other Latin American countries, like Argentina, Chile and Uruguay, have stronger legislation regulating outsourcing — though they still come under criticism from their workers.

In March, the Mexican government sent a bill to Congress proposing labour reforms, including giving broad berth to employment agencies. For example, anyone interested in opening an agency would only have to pay a deposit to begin operating. Congress will discuss the changes during sessions later this year.

“The proposed bill recognises the status quo and regulates the agencies, though it leaves a lot of holes,” said Dean, of CILAS.

The Calderón government’s bill does not define all forms or areas of subcontracting, and fails to specify labour rights, such as union organising, according to a CILAS analysis.

The congressional CESOP, meanwhile, warns that the phenomenon of job placement agencies is just one of many forms of subcontracting or outsourcing, meaning the regulation only covers part of a much broader issue.

“There could be a complete simulation of rights, and formidable profits. Furthermore, it creates a huge distortion between labour rights and fulfilling them,” said university expert Bouzas.

“Subcontracting is constantly evolving, and regulations are always lagging behind,” said Dean.

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