Mexico’s federal labour authority has handed Orla Mining (TSX: OLA) a decision it has been waiting for. The government’s Labour Authority has ruled that the blockade at its Camino Rojo gold and silver mine is illegal, and the union that represents its workers has been told to bring it to an end.
The ruling came out of a June 3 meeting between Orla, the Sindicato de Beneficio de Minas, and the Mexican Department of Federal Labour Conciliation. The Labour Authority determined that the blockade sits outside the bounds of the collective bargaining framework, with the conciliation department advising that it be lifted.
Orla said it expected normal operations to resume by the evening of June 4.
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The standoff began on June 1, when unionized workers mounted what Orla described as an illegal work stoppage and blockade that halted production. The action did not follow the procedures required under Mexican law, including the filing of a strike notice.
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At the centre of the dispute are two payments. One is a worker productivity bonus that Orla and the union were still negotiating. The other is the profit-sharing entitlement known in Mexico as the PTU. Orla has said it already calculated and paid the maximum amount stipulated under Mexican law, but members of the workforce objected to the figure and walked off the job.
Negotiations on the productivity bonus are set to resume on a future date, conditional on operations returning to normal. Chief Executive Officer Jason Simpson said the company was optimistic a mutually beneficial agreement could be reached, while stressing that continuity at the site is a precondition for it.
Labour friction at Camino Rojo is not new. In late March, a panel convened under the Rapid Response Labour Mechanism of the Canada-U.S.-Mexico Agreement found a denial of freedom of association and collective bargaining rights at the mine. Orla responded in early May with a slate of remediation measures, including a new labour rights policy, fresh management appointments, and enhanced oversight and security.
Orla Mining last traded at $15.54 on the TSX.
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