The National Trade Council (CGN), an entity that represents micro, small, medium and large employers in Colombia, filed a 43-page letter on Monday with a series of comments regarding the Report of the Labour Reform Committee, for its second debate in the House of Representatives.
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In the letter, the ‘guild of guilds’ exposed the negative and harmful effects that this project could have on the country’s investment and job creation, which in turn would translate into an increase in poverty and inequality rates.
The document, known by Portafolio, also highlights the economic impact that this reform could have on the productive sector and emphasizes the need for the initiative to focus on the creation of new jobs and the reduction of informality.
After a detailed analysis of various aspects of labor relations, the National Trade Union Council reiterated that, in line with the objections it raises, seeks to continue working jointly with the Government and Congress to build a reform that seeks a balance between worker and employer.
According to Portafolio, the letter that was filed was socialized to each of the 32 associations that are part of the representation of the business community before its interest groups, including the Executive and the Legislative.
Compensation for dismissal without just cause
Firstly, the Trade Council points out that what is proposed in the reform on compensation for dismissal without just cause could create a disincentive for the duration of long-term contracts in companies.
The above considering that the proposed text maintains the elimination of the legal monthly minimum wage ranges for establish the amounts of compensationtogether with the increase in the days on which they should be calculated.
In this regard, the entity highlights that this increase is particularly detrimental to micro, small and medium-sized enterprises due to their limited financial capacity. “This could compromise the sustainability and permanence of these companies, since the increase in compensation would significantly raise the cost of unjustified dismissal, with increases that can exceed up to 98% depending on the length of service of the worker for workers with salaries below 10 minimum wages.”the letter mentions.
Likewise, the document indicates that by unifying the compensation tables in the bill, the
Increases in the amounts for workers earning more than 10 minimum wages can represent increases of up to 165%.
“The proposed increase in Colombia’s severance pay tables, coupled with excessive labour protection, raises concerns about a lack of productivity and loss of labour competitiveness. This would lead to Colombia having one of the highest rates of unfair dismissal compensation in all of Latin America (63.8%), with increases ranging from 7% to 98% compared to current regulations,” adds the guild.
In addition, it proposes evaluate the possibility of reducing the compensation base for fixed-term contracts, contracts for the duration of the work or task, and indefinite-term contracts, taking into account that the groups contemplated in the proposal have different characteristics and conditions.
Dismissal
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Fixed-term contracts
According to the Trade Council, the establishment of the open-ended contract as a general rule for hiring, together with the increase in the costs of compensation for unjustified dismissal, “It limits the employer’s ability to organize itself financially in the event of unforeseen events, changes in the business model, or in the development of the company’s ordinary activity.”
The unions mention that this provision would not only negatively impact companies that do not have the capacity to sustain a permanent and indefinite staff, but also “It restricts the negotiating and contractual freedom of companies, as well as the contractual freedom and autonomy of the will of workers.”
In this regard, the text highlights that, although this measure aims to protect workers, Its implementation could end up leaving them unprotected, as well as making it difficult for more people to formally join the labour market.
The above also considers that Some sectors require hiring for defined terms to a certain number of workers and in other cases the hiring responds to the execution of specific projects or contracts. “We believe that the possibility of making fixed-term employment contracts should not be considered as an exception, but rather as one of the many alternatives that the employer has to provide employment to an employee.”the entity adds.
In that context, The Trade Council proposes that the rules be maintained on these contracts as established in current legislation and It is proposed to modify the point of the article that seeks to regulate the extension of the contract for an indefinite period so that it does not give rise to multiple interpretations.
Employment contract
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Night work and other provisions
In the letter submitted by the Trade Union Council, the group also addresses the articles regarding day and night work, the limit on overtime work, and the remuneration of mandatory rest days.
In this regard, he warns that these three provisions could increase companies’ labor costs by 17%. “by affecting their competitiveness and, in some cases, transferring these higher costs to the final price of the products or services (when market conditions allow).”
The text also mentions that the increase in costs associated with the working day, The new rules on day and night work and the costs of work on Sundays and holidays do not take into account the particularities of sectors such as commerce, tourism, private security, transport and some agricultural subsectors, which operate 24 hours a day or have predominantly night-time hours.
The above, according to the document that Portafolio saw, would translate into less hiring of personnel in the night shift work slots, as well as in an increase in accidents in occupational risks because there will be fewer workers performing the same tasks and with high risk.
Taking into account all of the above, the group suggests that if these changes are implemented, a repricing for the ARLs should be carried out, since there would be a larger population at high risk under an insufficient rate. In addition, they consider that any measure that implies an increase in costs for sectors that operate 24/7 should be carried out once the implementation of the reduction of the working day is completed.
Working hours
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Apprenticeship contract, a crucial issue
Another point that the letter highlights is that the proposal to transform the apprenticeship contract into a fixed-term one, “This could significantly increase the costs of this type of recruitment and discourage the hiring of inexperienced personnel, as well as young people from accessing their first job.”
In this regard, they point out that the implementation of this modification would imply an increase in the monthly cost of an apprentice from $870,000 to $1,774,800. This includes statutory benefits, not including the extra-legal benefits that each company could offer.
The association also points out that “This increase may generate a regressive incentive, since it could be cheaper to monetize the learning fee than to hire a person for this purpose.”. He also highlights that “By increasing costs and not ensuring that SENA trains students in the disciplines required by companies in specific geographic areas, the essence of the apprenticeship contract figure, which seeks to facilitate the insertion of the student-apprentice into the productive sector, is blurred.”
The proposal suggests maintaining the apprenticeship contract as it is in the current legislation and also adding a special article to the bill that establishes the obligation for the SENA to carry out training actions for apprentices in the main agricultural subsectors of the country.
Employment contract
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Agricultural contract
The CGN highlights that the articles associated with the agricultural contract and daily wage They maintain the impediments to reducing the rate of informality in the Colombian countryside.
It also points out that indeterminate and ambiguous concepts have been identified that “Instead of contributing to the legal security of labour relations on land, it will generate risks in the materialisation and stability of this type of contract.” Likewise, it emphasizes the importance of the reform text reflecting “a regulation that allows us to address the reality of agricultural, temporary and seasonal work, based on productive or seasonal cycles, continuous or discontinuous in the Colombian countryside.”
Regarding contracts and wages, the union says that these points should reflect the possibility that workers who perform part-time tasks receive remuneration corresponding to the legal minimum wage in proportion to the time actually worked. “This particularity must be accompanied by complementary and special provisions, which allow these workers to access protections in terms of pensions, health, and occupational risks through rules adapted to the reality of work.”he adds.
On the other hand, the document recommends establish a new and different model of occupational risks for workers who work under the agricultural contract modality. This taking into account that the Integrated Contribution Liquidation Form (PILA) does not allow the affiliation proposed in the reform, since contributions cannot be made below a minimum wage.
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PORTFOLIO
