Subcontracting: Swiss-Mexican Chamber of Commerce and Industry fixes position

Regarding the debate on subcontracting, the Swiss-Mexican Chamber of Commerce and Industry Switzerland recognizes the initiative of the Government of Mexico to regulate a contracting scheme that has allowed, in its irregular exercise, simulation, tax evasion and avoidance, and has deprived workers of their rights.

However, the Chamber stressed, outsourcing adhering to the legal framework guarantees all labor and social security rights of workers, and favors compliance with tax obligations.

Consequently, the Swiss Chamber supports the unrestricted exercise in the application of sanctions to companies that fail to comply with the provisions of the Law.

The Swiss-Mexican Chamber of Commerce and Industry represents 50 Swiss companies with a presence in Mexico, which belong to various sectors: food and beverages, agribusiness, energy, pharmaceuticals, infrastructure, chemicals, financial (banking and insurance), watchmaking, services, technology, trading and transportation.

Together, the companies affiliated with the Swiss Chamber generate more than 40,000 direct jobs in Mexico through various hiring schemes.

For this reason, Swiss Chamber we recognizes that subcontracting has facilitated compliance with labor and tax provisions regarding the hiring of personnel for foreign companies that decide to establish operations in Mexico and for national entrepreneurs.

Subcontracting 

The World Employment Confederation has emphasized the importance of designing regulation based on international standards to benefit workers, companies, the labor market, and society in general; therefore, it is crucial, according to the Swiss Chamber, to consider Convention 181 of the International Labor Organization.

Likewise, the Chamber added, ILO Convention 144 emphasizes the relevance of tripartite social dialogue in these reform processes, in accordance with multilateralism and the signing of international treaties by the Mexican government.

The consequences of not consulting the sectors involved would be an increase in labor informality, fewer ISR contributions and a decrease in allocations to the IMSS.

Point of view

In a statement released this Monday, the Swiss-Mexican Chamber of Commerce and Industry stated that the initiative on subcontracting contains points of disagreement with respect to the Federal Labor Law.

“Notably, the proposed regulation does not allow a realistic transition period to a new regulatory scheme, which could have negative consequences for the more than 4 million Mexican men and women subcontracted to the formal market, which is particularly worrying in the economic context of the COVID-19 pandemic. In turn, this would cause losses in key sectors and industries for the Mexican economy,” Swiss Chamber said.

Therefore, the Chamber made the following positions:

• We call for the private sector to be taken into consideration in the reform initiative on outsourcing of the Federal Executive and other related initiatives that are presented in Congress.
• We respectfully request that the following elements be considered in the regulation of outsourcing: increasing formal employment; combat simulation, tax avoidance and evasion; provide greater job security and quality for all workers; and facilitate the formal labor insertion of people in vulnerable situations (youth, women, people with disabilities, people from the LGBT + community, among others).
• Given that many companies use subcontracting as a legal alternative to comply with labor, tax and social security obligations, we request that its importance be reconsidered to maintain investment, productivity and competitiveness levels in Mexico, since these indicators would be seriously affected by the figure of subcontracting is completely prohibited.

Context

Within the framework of the Consortium for the Welfare of Mexico, Swiss companies have supported various initiatives that boost the employability of vulnerable people, and reactivate the economy and formal employment in times of social and economic fragility.

For example, the Mobilization for Employment program favors the rehiring of unemployed people due to the Covid-19 pandemic with more than 2,500 people impacted; The Youth Building the Future program has more than 500 places in Swiss companies, and the Mexican Dual Training Model has more than 330 young Mexican graduates.

The Swiss Chamber said that it reaffirms its willingness to maintain respectful and efficient communication channels to create a better work environment in favor of Mexican society.