How was the labor reform?
After a year and a half in Congress, two years in the Constitutional Court and a presidential veto, the labor reform is ready to be enacted. Although the final wording of the law is not yet known, this week the Ministry of Labour published a minute with the main changes. Here, some of them.
by Nicolle Peña
1. Who can negotiate?
The instruction that the Ministry of Labor published this week, entitled “Modernization of labor relations and its institutions”, states that “the old law allowed for negotiation” of labor organizations and negotiating groups. In response to the question of who can negotiate under the new law, the document explains that “trade unions with clear and precise procedures” can do so, thus omitting negotiating groups. For the opposition technicians, this represents an attempt to ignore the ruling of the Constitutional Court, which declared union ownership unconstitutional.
2. Union Quorum
If the company has more than 50 workers, 25 of them are required to represent at least 10% of the total number of those providing services. If the firm does not have a union, the information released by the ministry indicates that one can be formed with a minimum of eight workers, but they will have one year to achieve the quorum corresponding to the size of the company, otherwise it will expire. All of this is maintained with respect to the current legislation. The requirement that the new law adds to the current legislation is that if the company has less than 50 workers, a union may be formed with eight of them, provided that they represent 50% of the company’s workforce.
3. The new deadlines
Sergio Morales, a lawyer for the Legislative Programme for Freedom and Development, states that another of the main changes in the labour reform relates to the deadlines associated with regulated collective bargaining.
The two most relevant are the time to make the strike effective from the moment it is voted, which with the reform increases from three to five days, and the maximum duration of the collective instruments, which is reduced from four to three years. The latter means that collective bargaining is likely to occur more frequently.
4. Subjects to be negotiated
Negotiation issues are no longer limited to pay and general working conditions. Agreements for the conciliation of work and family responsibilities, for the exercise of parental co-responsibility, plans for equal opportunities and gender equity in the company are added as topics. Also, training and productive reconversion of workers, constitution and maintenance of welfare services and dispute resolution mechanisms.
5. End to Striking Replacement
The reform prohibits the internal and external replacement of striking workers, expressly recognizing the right to strike. It also prevents the direct and indirect employment of striking employees of a contractor or subcontractor firm by the client company. However, it creates the figure of the necessary adjustments, which empowers the employer to change working hours, as well as the necessary modifications in order to ensure that workers not involved in the strike can perform the functions agreed in their employment contracts.
6. Minimum services
The new law establishes that minimum services will be understood as those “strictly necessary to protect the company’s tangible assets and installations and to prevent accidents, as well as to guarantee the provision of services of public utility, the attention of basic needs of the population, including those related to the life, security or health of people and to guarantee the prevention of environmental or sanitary damages”. The personnel assigned by the union to provide minimum services, in the event of a strike, will be made up of workers involved in the negotiation process and will be called emergency teams. Its members must receive remuneration for the time worked. The origin of the minimum services must be determined by the parties, and if they cannot reach agreement, by the Directorate of Labour.
7. Emergency equipment
The employer must send the union the proposal for minimum services 180 days before the closest collective bargaining. There, he will ask for minimum service qualifications and the determination of an emergency team. The union will have 15 days to respond. Both parties will have 30 days to reach an agreement. If that does not happen, they can go to the Regional Labor Office, which will have 30 days – which can be postponed for another 10 – to resolve the matter. You may request reports from regulatory bodies in the area or economic activity.
If the resolution does not satisfy the parties, either of them may go to the national director of labour within five days, so that the latter may decide within a maximum of 30 days.
8. Extension of benefits
Once the labor reform comes into effect, the extension of benefits acquired in the framework of collective bargaining will be a mandatory subject of negotiation between the union and the employer. By agreement, the parties shall establish objective, general and non-arbitrary criteria to extend such benefits to non-unionized workers. If they accept the extension, they are obliged to pay all or part of the union fee, as determined by the collective instrument. Marcelo Albornoz, former director of Labor and former undersecretary of Justice, clarifies that in practice the “non-unionized could negotiate as a group to agree on collective benefits with the employer.
9. Special agreements
The new law “grants autonomy to the parties to agree” on special agreements regarding the distribution of working hours over four days of work and three days of rest – known as 4×3 – and agreements of workers with family responsibilities, to combine on-site work in the company and work from home or another agreed location. Mind you, they both demand 30% union…
totalization in the company.
The new law also introduces a quota rule that seeks to ensure the representation of women on trade union boards (one in three) and establishes the obligation to have at least one woman on the trade union negotiating committee in cases where the quota rule does not apply.
10. Right to information
Until now, unions could ask the company for specific information for collective bargaining: balance sheets for the previous two years, financial information and overall labour costs. With the new law, says the Ministry of Labor’s minute, they will be able to periodically request the balance sheet, information on probable labor costs, investment plan and payrolls. In order to access the latter, the union must be authorized in the statutes or expressly by each worker.