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Labor reform: for the unions or for the unemployed?

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Labor reform: for the unions or for the unemployed?

One of the great bets of the National Government is the labor reform, a project that has already been filed in the Congress of the Republic. However, despite the fact that the Executive said that an agreement had been reached with the businessmen, this was not achieved, due to their eagerness and the lack of meetings.

This document continues to raise concerns because, although it has a stability approach for workers, it still does not outline a clear path to promote job creation and reduce informality.

To understand the scope of this reform and its impact, it is important to take into account both sides: that of the employer and that of the employee. In this sense, Iván Vegas Molina, leading partner of BDO Legal in Colombia, analyzes what is stated in the document.


The expert highlights that “it is worrying that the reform, as it is known today, is not focused on seeing how we bring that almost 50% of people who are in the informal sector to formal options and, in this way, generate better employment conditions. Rather, the project is focused on workers who are already in the system. We see a way to establish again some labor rights, prerogatives and guarantees that existed long ago in the Substantive Labor Code, prior to the reforms that were processed in 2003, and even some others of a new nature aimed at the same. We believe that, in this sense, Colombian law is already quite guaranteeing”.

Among the labor rights and guarantees that are going to be resumed, Vegas Molina says that they are “mainly, to return to the scene of nightly surcharges from six in the afternoon and not from nine at night; increase the Sunday and holiday surcharge to 100% and not 75%, etc. Let’s say that this generates better prerogatives on paper for formal workers, but increases the cost of creating jobs at a time of global economic uncertainty and that we have a significant inflationary scenario. In addition to the above, there are factors that are historically worrying in terms of productivity and what can happen with these measures is that companies establish parameters so that fewer employees produce more”.

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The day

Regarding the proposal to reduce the working day, the expert maintains that “the reduction of the working day can be an interesting topic. There are different discussions around this policy and, in the end, we see that this initiative allows us to improve productivity. The answer is not unique and it is not absolute in terms of whether it can be favorable or unfavorable. It would be necessary to measure its impact according to the sector and the service or product that the company develops. Ideally, each organization should have an adequate policy to handle this reduction in working hours in an ideal way and that this decision be a win-win between the well-being of workers and productivity”.

Regarding whether the proposed reform will create new types of contracts, Vegas Molina says that “the reform does not propose different types of contracts to those existing in labor matters. The document establishes that the individual contract for an indefinite term must be the general rule and, therefore, it is applicable to all cases. It gives you a much smaller margin than the one that exists in the law for other types of contracts, such as the fixed-term contract or for work or labor. Today, a fixed-term contract can be managed for one year or it can be less than three. The approach of the reform establishes that this cannot happen. The same happens with other types of modalities that seem, let’s say, to be deprecated. The fact that there are not several types of contracts reduces the possibilities of exercising some specific economic activities”.

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Regarding labor stability, the reform establishes some mechanisms that also seem to be a bit complex, to the extent that special protections are given in circumstances such as, for example, the pension status or some family circumstances that any worker may have so that They are created a special reinforced stability that prevents dismissal without just cause. “That, in general terms, can generate some degree of concern, because it would prevent companies from making decisions that are necessary in the normal flow of the economy and business,” he says.

On the other hand, the Union of Workers of the Oil and Energy Industry of Colombia (Utipec) said that it sees “with great concern” the proposals that are being raised.

“Although the media has wanted to show how a guaranteed reform provides more benefits to workers, the truth is that the risks it brings to the viability of formal jobs today would generate greater damage at the time of its implementation than the benefits it promises in written,” the union said.

The Utipec says that, as the reform is proposed, its prerogatives are directed only to the 6.8 million formal workers, who represent 13% of the population. In addition, many of the provisions would apply only to workers in the private sector, which is 5.5 million people.


“This ends up being a reform to benefit an immense minority of Colombians, leaving aside those who find themselves in the most difficult labor conditions, which will continue to deepen the problems of inequality that Colombian society has,” said the Utipec.

It is irrational and incoherent to speak of a labor reform that does not include clear criteria about how the generation of better conditions for employment will be made viable.

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The union also mentions that, by imposing burdens on employers, more responsibilities and risks, without offering them ways to comply with them, a labor reform like the one proposed will make employment more difficult, reducing the possibilities of access to formal employment for workers. Colombians and indirectly promoting the conditions for dismissals to be registered.

“It is irrational and incoherent to talk about a labor reform that does not include clear criteria about how the generation of better conditions for employment will be made viable. For this reason, we ask the Government to guide its reform proposal for the good of Colombian workers responsibly, establishing the ways so that everything written is materializable”, he added.

payroll adjustments

On the other hand, according to a survey carried out by the merchants grouped in Fenalco, if the labor reform as presented by the Government was approved, 55% of the businessmen would make adjustments related to the reduction of payrolls and the reduction of personnel, while 27% would avoid hiring new employees as much as possible and 71% would discard, reduce or decrease their investments, due to the increase in expenses.

“We recognize the coordination work carried out by the Ministry of Labor. Even so, these changes will affect the cost structure of the companies”, warned, for her part, Rosmery Quintero, president of the Colombian Association of Micro, Small and Medium Enterprises (Acopi).

The project, which will now have to go through Congress, proposes that Colombians work 42 hours a week (today there are 48 and in July they would go to 47), which may be distributed by mutual agreement between employer and worker, in 5 or 6 days a week.

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