Mexico's lower house gives final approval to labor reform

MEXICO CITY Sat Sep 29, 2012 12:47pm EDT

MEXICO CITY (Reuters) - Mexico's lower house of Congress gave final approval on Saturday to a bill that would mark the biggest shake-up of the country's labor market in 42 years.

The final vote took place just before 4 a.m. following a raucous 14-hour debate that was led from a congressional balcony after leftist lawmakers stormed the chamber's rostrum and snatched the microphone from the speaker leading the session.

The bill was approved on a vote of 346-60 with one abstention and now moves to the Mexican Senate, which will have 30 days to approve or reject it.

In a show of cooperation between the outgoing and incoming administrations, the Institutional Revolutionary Party (PRI) of President-elect Enrique Pena Nieto supported the bill, which the PRI had gutted of measures aimed at curbing the power of unions.

In one of the final changes applied to the bill, lawmakers voted to ensure that the elections of union leadership are conducted however individual unions see fit, which amounted to a rejection of an earlier proposal to mandate that the elections be free, direct and secret.

The draft law to soften antiquated labor rules was put forward by outgoing President Felipe Calderon, whose pro-business National Action Party (PAN) wanted to weaken unions that have long formed a keystone of support for the PRI.

Critics say abuses by corrupt unions affiliated with the PRI have been bad for democracy and economic development.

The overarching reform will make it easier for employers to hire and fire workers, streamline the settlement of time-consuming labor lawsuits and formally regulate outsourcing.

The bill was given provisional approval Friday on a vote of 351-130, with 10 abstentions.

Pena Nieto, who is set to take office on December 1, has vowed to increase employment and boost salaries in Mexico.

Economists and politicians have forecast Calderon's bill could create upwards of 150,000 jobs a year, but that may not be enough to meet the demands of the labor market.

(Reporting By David Alire Garcia and Miguel Gutierrez; Editing by Bill Trott)

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