INFORMATION FOR MEANINGFUL LABOR RIGHTS REPORT

UNCLAS SECTION 01 OF 04 QUITO 003132

SIPDIS

DOL/ILAB FOR TANYA RASA, SECSTATE PLEASE PASS TO USTR
REPRESENTATIVE

E.O. 12958: N/A
TAGS: ELAB PGOV EC
SUBJECT: INFORMATION FOR MEANINGFUL LABOR RIGHTS REPORT

REF: SECSTATE 241222


1. Summary: This cable provides information on labor
conditions in Ecuador as requested for the Meaningful Labor
Rights Report, and is keyed to questions included in RefTel.
End Summary.

Administration of Labor Law
--------------


2. The Ministry of Labor and Human Resources (MOL) is made
up of various administrative divisions, including the Office
of the Vice Minister, the Undersecretary for the Sierra and
Amazon, the Undersecretary for the Coast and Galapagos, the
Labor Inspectorate, International Relations, Planning,
Communication, Internal Auditing and Legal Advising. The MOL
received a proposal from the International Labor Organization
(ILO) for a restructuring of the MOL which they plan to
implement in December.


3. There are 45 labor inspectors nationwide, 11 of whom work
in Quito. Article 553 of the labor code defines their
jurisdiction. From January through October 2004, the MOL
conducted 304 inspections. In accordance with the labor
inspection law, individual claims can result in fines from
$5-50. The Ministry of Labor's inspectorate issues
approximately 30-40 fines a day.


4. Labor complaints not resolved by MOL administrative
action are heard in trials before the labor judges within the
Superior Court. (It is not necessary to first make a labor
complaint to the MOL. However, approximately 95% of cases
are first heard in the MOL.) There are about 4,000 labor
court cases a year. Since June 2004, a new oral procedure
was adopted for labor cases. Now, trials that previously
took 3-5 years can be resolved in 30-60 days. From July
2004, when oral procedures began, to November 2004, the five
labor judges heard 1348 cases. Labor court judges told
LabOff they had reached sentences on approximately 450 of
these cases. Labor court judges also told LabOff they did
not have statistics on the reasons the court cases were
filed. The decisions of the court can be appealed to the
Supreme Court within 10 days after the last hearing. Most
cases are filed by workers for violation of contracts or of
the law and unjustified firings. Employers and workers
generally obey the decisions of the labor courts. In Quito
and Guayaquil, there are approximately 30,000 pending cases
that date from before the law was passed and need to be tried
under the written system.

Freedom of Association
--------------


5. The Constitution and labor code provide most workers with
the right to form trade unions. According to the AFL-CIO
Solidarity Center, about 390,000 workers in Ecuador are
unionized (approximately 8.5% of the Ecuadorian economically
active population). Of these, approximately 120,000 are
members of one of the five union "centrals" or labor
confederations, while 270,000 are independent. Those outside
of the union confederations include drivers, public servants,
health workers, teachers and oil workers. The MOL has
approved 878 unions since 1985. No unions are registered in
the Export Processing Zones (EPZs).


6. Under the law, unions may freely join federations or
confederations. The two largest single labor unions, the
National Union of Educators and the Union of Social Security
Workers, are allied with the Democratic Political Movement, a
far-left party. There are five large labor confederations;
no confederation was allied with a political party. There
are approximately 70 labor federations established in
Ecuador. Important federations include health, electrical
workers, public servants, oil workers and municipal workers.


7. The labor code explicitly prohibits employers from
interfering in the establishment or functioning of worker
organizations. The code also explicitly prohibits employers
from dismissing workers while they are forming a union or
negotiating a collective contract; however, the penalties for
violations are relatively minor and not always enforced in
practice. Members of the police, the military, and most
public sector employees are not free to form trade unions.
Some public sector employees, however, are covered by the
labor code and able to form unions and bargain collectively.
While public sector employees not covered by the labor code
cannot form unions, they are free to form associations


8. The 1991 labor code reforms set the number of workers
required for an establishment to be unionized at 30. In
2002, the ILO criticized the 30-worker minimum as too high
and called for the government to take the necessary measures
to amend the code. In its 2002 Annual Survey of Violations
of Trade Union Rights, the International Confederation of
Free Trade Unions reported that 60 percent of the enterprises
in the country employed fewer than 30 workers, effectively
excluding 1 million workers from organizing a union.


9. Labor laws intended to protect workers' rights to freedom
of association sometimes failed to deter employers from
retaliating against workers for organizing. Reinstatement is
not a legal right of workers fired for union activity.


10. While employees of state-owned organizations enjoyed
rights similar to those in the private sector, the law
prevents the majority of public sector employees from
exercising collective bargaining rights. However, most
public employees maintained membership in some labor
organization.


Right to Organize and Bargain Collectively
--------------


11. According to the MOL, there are currently 651 active
collective contracts, which cover 134,762 workers (88,694 in
the public sector and 45,053 in the private sector.)
However, according to the AFL-CIO Solidarity Center,
currently 28,260 workers in Ecuador are covered by collective
bargaining agreements. None of these are in the EPZs. As of
November 2004, there have been 49 collective bargaining
agreements signed in 2004 (previous years: 2003: 114, 2002:
124, 2001: 134). According to the AFL-CIO Solidarity Center,
there are three primary reasons why the number is so low for

2004. These are the closing of many businesses due to the
poor economy, no new formation of unions due to the 30 person
minimum, and the public sector not bargaining collectively
due to the new law on standardizing salaries. In accordance
with the labor code, unionized as well as non-unionized
workers are protected by collective contracts.


12. The labor code provides for resolution of labor
conflicts through an arbitration and conciliation board that
consists of one representative of the Ministry of Labor, two
from the union, and two from management.


13. The labor code requires workers to be represented by
only one labor union. It prohibits discrimination against
union members and requires that employers provide space for
union activities upon the union's request. If the Ministry
of Labor rules that a dismissal of an employee is
unjustified, it can require the employer to pay severance to
the worker of 125 percent of a month's salary for each year
worked, although the reforms set a cap on such payments.


14. During the past year, there have been five strikes, two
in the public sector and three in the private sector.
According to the MOL, this is due to increased dialogue and
intervention on the part of the MOL. There are few
restrictions on the right of workers to strike, although a
10-day cooling-off period is required before a strike can be
declared. The labor code limits solidarity strikes or
boycotts to 3 days, provided that the MOL approves them. In
some industries, during a legal strike, workers may take
possession of the factory or workplace (thus ending
production at the site) and receive police protection during
the takeover. However, in other industries, such as
agriculture, the law requires a 20-day waiting period from
the day the strike is called. During this time, workers and
employers must agree on how many workers are needed to ensure
a minimum level of service, and at least 20 percent of the
work force must continue to work in order to provide
essential services.


15. The labor code provides that "the employer may contract
substitute personnel" only when striking workers refuse to
send the number of workers to provide the minimum necessary
services in service industries. The employer must pay all
salaries and benefits during a legal strike; the labor code
protects strikers and their leaders from retaliation.


16. The law does not provide public workers with the right
to strike and includes a provision that striking public
sector workers are liable to between 2 and 5 years in prison;
however, there were frequent unauthorized work stoppages by
public sector workers. In September, Congress passed a civil
service reform law that creates a unified salary structure
for some public workers (it excludes the police, military,
teachers, and health care workers). The law reiterates the
prohibition against strikes by most civil service employees.


17. There is no special prosecutor assigned to handle
extreme cases of anti-union discrimination or acts of
interference, such as murders and beatings, however these are
not common crimes in Ecuador. The Ministry of Labor is the
organization within the Ecuadorian government responsible for
ensuring the respect of workers' rights.

Prohibition of Forced or Compulsory Labor
--------------


18. The Government has proposed legislation to reform the
penal code to criminalize prostitution of minors under 18 and
trafficking in persons (TIP). On August 18, the president
signed a decree establishing a national commission to fight
TIP and provide social services to victims. The Executive
branch submitted its package of legislative reforms in
September, which remains under Congressional review. The
reforms are designed to bring the penal code into compliance
with international conventions against trafficking in persons
and alien smuggling.


19. The government and NGOs are designing programs to assist
trafficking victims. The ILO with GoE cooperation plans to
open a shelter for minors who are victims of commercial
sexual exploitation in Machala by January 2005. USAID and
Geneva Global will provide $600,000 to fund 12 to 15 projects
to address TIP issues in Ecuador. Geneva Global held a
conference on November 15 with 38 NGOs to solicit proposals
for projects.

Child Labor
--------------


20. Child labor remains a major problem in Ecuador.
However, the GoE, NGOs and other institutions are taking
steps to combat worst forms of child labor in Ecuador. More
clearly needs to be done, particularly in the enforcement of
child labor laws and the rehabilitation of child laborers.
In July 2004, the Ministry of Labor created a Division for
Child Labor comprised of three officers, augmenting the
previous single position for Child Labor, which was also
responsible for international affairs. The Division meets at
least monthly with the MOL and inter-agency National
Committee for the Progressive Eradication of Child Labor.


21. In May 2004, the MOL hired eighteen new child labor
inspectors, bringing the total nationwide to 19. Currently
there are 16 inspectors due to resignations; the MOL is in
the process of hiring six more. According to the ILO, the
inspectors have found 500 child laborers in the field.
Nation-wide the budget to prevent and combat child labor is
$465,000. Of this $300,000 went to the Ministry of Social
Welfare and still has not been spent, $25,000 to the MOL, and
$140,000 for inspectors' salaries.


22. The Institute for the Child and Family (INNFA) has a
$3.5 million budget to work on child labor issues. (INNFA's
funds do not come from the national budget; most funds come
from import taxes.) Most of this money goes towards
scholarships for poor children, while a smaller program is
aimed towards moving children out of dangerous work. INNFA
provides support for child labor inspectors and helped create
an inspection manual. INNFA has worked to address the
problem of child labor in the flower sector by providing
information on child labor to all the major flower producers.



23. The ILO-IPEC began a child labor Time-Bound Program in
October 2003 with action plans in the banana, flower,
construction, trash and commercial sex exploitation of minors
aiming to get children out of work and back in school. USDOL
awarded $3 million to Catholic Relief Services to target
child laborers and children at risk of entering the flower
and banana sectors.


24. The Child Worker Program funded by the Central Bank of
Ecuador, has developed a workshop program called "Panita"
which meets three times a week to promote civic values and to
work with families and schools on the issue of child labor.
The Child Worker Program is also planning a community
ombudsman program to hire a community group to receive and
act on reports of child labor. The Central Bank provided
$200,000 annually for the Child Worker Program.

25. The labor code needs to be harmonized with the Code for
Children and Adolescents (passed in Congress in December
2002),which sets higher standards. The Child and
Adolescents Code raised the fine for child labor violations
to $200-1000; the labor code fine remains at 50 sucres
(Ecuador's obsolete currency). In the labor code, the
minimum work age is 12 for work as domestics or artisans and
14 for all others, while in the Child Code it is 15 for all.

Minimum Wage
--------------


26. The minimum wage is defined in Article 94 of the labor
code and is annually updated by the Ministry of Labor. (The
MOL's National Technical Secretariat of Human Resources and
Remuneration Development sets the minimum wage for public
sector workers and the National Salary Council sets those for
the private sector.) The current minimum wage as of November
2004 is $135.62 per month and $0.95 per hour. This is the
general minimum wage and the MOL also sets minimum wages by
sectors. There are reports of non-compliance with the
minimum wage, particularly for foreign workers.

Occupational Safety and Health
--------------


27. The MOL reported that it received 71 work accidents
complaints, 9 of which were deaths, during 2003. Workers can
file complaints with the MOL's labor inspectorate or with the
Social Security Institute. Occupational safety and health
regulations are better enforced for those workers covered by
collective bargaining agreements. The construction, flower
and agro-industrial sectors reportedly suffer higher than
average safety and health problems.
KENNEY