The position of the Dominican business community on the payment of the unemployment to the workers evicted has evolved. Your interest is not to eliminate it but to review itin order to guarantee the financial stability of businesses and encourage formal labor in a working population that, in greater proportion, has between 20 and 30 years of productive life ahead of them.
in conversation with Free Journal, Circe Almanzar and Cesar Dargam, of the representatives of the employer sector in the tripartite dialogue to modify the Work code, state the models that have been analyzed, taking as a reference the experience of other countries. The one that has carried the most weight in previous stages of discussion up to now is that of establishing a maximum amount of unemploymentbased on the number of years worked, minimum wages, or a combination of both.
Less viability has been understood for an unemployment insurance -due to the high labor informality- and a unemploymentindividual capitalization type, among other options.
“What is not sustainable due to all the adverse effects that we have been saying is to maintain the current scheme that we have of unemployment”, insists Dargam.
According to Work code in force since 1992, the employer who exercises the eviction must pay the worker an aid of unemployment, whose amount is fixed in accordance with rules established in the same code. For example, an employee with five years in a company and a salary of 20,000 pesos, should be given 96,517 pesos of unemployment. Another with 15 years and a salary of 50,000 pesos, corresponds to 723,877.47 pesos also of unemployment.
model options of unemployment
| Establishment of a cap amount: based on the number of years, minimum wages or a combination of both. |
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| Requirement to provision labor liability funds. |
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Dargam presents a table in which it is pointed out that the Dominican Republic has a model of unemployment based on compensation, contrary to countries like Argentina, Brazil, Chile, Ecuador and Venezuela, which in addition to this have savings accounts and unemployment insurance.
For the Dominican business sector, a reform of the scheme of unemployment in force because “it can cause liquidity and even solvency problems for companies”. In addition, “the last salary as a basis for calculation discourages salary increases”. Likewise, “it is the cause of litigation, embargoes and legal costs” and “not every employee cobra unemployment or full amount.
“We eradicate from the discussion that the employer sector is proposing to eliminate the unemployment; our approach is very clear: it is to review the unemploymentso that it is more beneficial for the employer, more beneficial for the employee and at the same time gives greater legal certainty”says Dargam, who is executive vice president of the National Council of Private Enterprise (Conep).
“Most of the workers are not going to enter the Labor Code because people tend to avoid formalization when it has these high costs”Executive Vice President of the Association of Industries of the Dominican Republic
The transformation of the unemployment is one of the most controversial issues in discussions of reform to the Work code that have been unfinished for years. Last February, when the most recent round of dialogue began, the president of the National Confederation of Trade Union Unity, Rafael -Pepe- Abreu told Diario Libre that for the representation of the working class the unemployment “it is non-negotiable”. He indicated that, since they do not agree that it be modified, they did not include it in their agenda of proposals.
The business sector assures that, due to the unemployment, the informal sector shuns formality, so as not to suffocate their businesses with labor costs. “Most of the workers will not enter Work code because people tend to shy away from formalization when it has these high costs”, he assures Circe AlmanzarExecutive Vice President of the Association of Industries of the Dominican Republic (AIRD).
The business community reports that 85% of registered companies that contribute to Social Security have less than 15 workersand 95% less than 50 workers.
At the end of the 2019 pre-pandemic, the Central Bank reported an employed population in the formal sector of 2,299,463. At the close of the 2021 pandemic, the figure was reduced to 2,170,910.
That of the informal sector was 2,156,106 in 2019, and at the end of 2021 it increased to 2,251,930. Which means that 51% of the employed population in the country is in the informal sector, unlike the 48% that it represented two years ago.
“Any reform that is made in this country has to be aimed at simplification and reducing the levels of informality,” says Dargam.
Contract modality
Another of the issues proposed by employers to be reformed is the employment contract, which due to the evolution of the economic panorama, the hiring modalities have changed. They consider it necessary to contemplate that the productive sectors that understand that it is more profitable to have four-day working days and three days off, can do so. “You can work more hours for less time in the week; it makes the work much more effective and gives continuity to the work”, analyzes Circe Almánzar. He gives as an example an industrial company that considers a greater collective efficiency that its workers work four days the required weekly hours.
