Labor Minister Gloria Ines Ramirez and President Petro present labor reform bill. Photo: Forbes Colombia.
By Gustavo A Maranges – Mar 21, 2023
This is how Colombia’s Labor Minister Gloria Ines Ramirez described the labor reform bill introduced to Congress on March 17. Improving workers’ conditions and rights is a major part of President Gustavo Petro’s plan to reduce inequality.
The reform is the first of two planned this year by the Ministry of Labor. According to the legislative calendar, the Pension Reform will be presented on March 22, so both discussions will take place almost simultaneously. It is expected that the documents will undergo changes in Congress, but if the President’s legislative force remain united, the chances of getting the bill passed are good.
Among the most significant aspects of the Labor Reform is the re-establishment of the night shifts starting at 6:00 pm. In 2002, the then-recently elected President Alvaro Uribe changed the law and established the beginning of night shifts at 9:00 p.m., to benefit tourism, and entertainment business owners. Petro also proposes to pay double for these hours and holidays and Sunday shifts, which means 25% over the current amount.
Regarding salary increases, workers earning up to two minimum wages will be entitled to a salary increase equivalent to the previous year’s inflation. It will protect real wages, which are on a downward trend due to global inflation and the successive labor reforms of previous governments.
The reform intends to regulate work on digital platforms, like Uber or food delivery workers, but the bill only includes home delivery services, a detail that could change during the debates to make it more inclusive. From now on, those who work this way will have to make social security contributions and will be entitled to vacations and limits on how much they work per week. If workers don’t pay it, the company must assume them. Many employees in the sector welcome the measure, as they now work up to 15 hours a day without vacation entitlement.
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It is a very complex sector since, in many cases, there are no formal labor contracts, and it is often assumed as a form of “self-employment,” although many are not. In any case, it is a first attempt to regulate and protect workers’ most basic rights without affecting the growth of the sector, as some critics of the reform have stated.
As expected, one of the reform’s strong critics is former President Alvaro Uribe (2002-2010), who published a statement affirming: “the reform does not benefit workers or businessmen.” According to the best neoliberal teacher in Colombia, the new regulations imply an increase of between 30 and 35% in labor costs, which will slow down employment generation and increase the informal employment rate, which stands at 57.9% as of January 2023.
Regardless of the neoliberal logic behind this approach, Uribe forgot to mention that his policy of reducing labor costs did not succeed in either increasing employment or reducing the informal work rate. However, it did increase the working day length, while reducing real wages and workers’ rights, all of which resulted in workers’ massive exploitation.
According to Uribe, the reform is unnecessary, and a wage increase every five years linked to a productivity increase would be enough. The rest of the measures only make the hiring process more complex, said the former president. Petro said he agreed with the proposal of a productivity-linked salary increase but also stated that it should be included in the reform instead of replacing it since it goes far beyond salary issues.
The main objection to the reform is based on Uribe and some business sector representatives’ statements predicting mass bankruptcies among small and medium-sized companies. This is an unfounded fear, and although it certainly increases costs, it is a measure of income redistribution through salaries.
Ultimately, it is a measure that encourages business owners to increase productivity as a way of balancing any losses from labor costs. Something they were not forced to do before due to the precariousness of employment, a classic neoliberal recipe.
Reform support parades have been organized in Bogota, Cali, Medellin, Barranquilla, and other important cities of the country. The most important unions, among them the Workers’ Unitary Central (CUT), the Labor General Confederation (CGT), and Colombian Education Workers Federation (FCE), all support the Petro administration’s project.
The proposal also modifies the relationship between unions and employers. in some cases, employers have to negotiate work contracts with dozens of unions separately. The reform seeks to limit this type of practice, which implies a lighter burden for the employer and strengthens workers’ unity, offering them better chances when negotiating collective work contracts.
Another positive aspects are the reduction of weekly working hours from the current 48 to 42. The process will be gradual, on a basis of one hour per year, retroactively from 2022. Similarly, service contracts, which left workers defenseless because they did not guarantee social security, health or education insurance, or vacations, will be suspended. Instead, the Ministry’s policy is to foster indefinite-term contracts.
The reform also includes special protection for heads of families, the disabled, workers close to retirement age, and pregnant women. The dismissal of people in these categories will only be possible if qualifies as “just cause” and after a judge’s approval. Meanwhile, for firing other workers without “just cause,” the employer should pay compensation equivalent to the remaining months of the contract’s salary.
Latin America is showing the rest of the world with these measures, especially in a context marked by a worldwide decline in labor rights. In France, for example, there have been strong protests against the two-year increase in the retirement age. Meanwhile, in the United States, the number of unjustified firings and complaints of violations of the right to form unions is on the rise. In Colombia there is a president who is standing with the workers which is never seen in the developed countries of the North, until they are forced to which is what happened by the many labor advances in the US in the 1930’s
This new reform seeks to dignify the Colombians’ work and reverse the disastrous consequences of decades of neoliberalism. It also includes protection against violence and harassment at the work place, as well as safeguards for the right to form trade unions. However, some sectors consider it not inclusive enough, which may be true, but it definitely is an unprecedented step, one in the right direction.
(Resumen Latinoamericano – English)
