Identifier
Created
Classification
Origin
05GUATEMALA341
2005-02-09 21:06:00
UNCLASSIFIED//FOR OFFICIAL USE ONLY
Embassy Guatemala
Cable title:  

GUATEMALAN OPTIONS FOR LABOR STANDARDS ENFORCEMENT

Tags:  ELAB ETRD PREL PGOV EAID GT 
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092106Z Feb 05
UNCLAS SECTION 01 OF 02 GUATEMALA 000341 

SIPDIS

SENSITIVE

USTR FOR CLATANOFF

E.O. 12958: N/A
TAGS: ELAB ETRD PREL PGOV EAID GT
SUBJECT: GUATEMALAN OPTIONS FOR LABOR STANDARDS ENFORCEMENT

REF: A. GUATEMALA 280


B. GUATEMALA 56

Sensitive but unclassified. Please protect accordingly.

UNCLAS SECTION 01 OF 02 GUATEMALA 000341

SIPDIS

SENSITIVE

USTR FOR CLATANOFF

E.O. 12958: N/A
TAGS: ELAB ETRD PREL PGOV EAID GT
SUBJECT: GUATEMALAN OPTIONS FOR LABOR STANDARDS ENFORCEMENT

REF: A. GUATEMALA 280


B. GUATEMALA 56

Sensitive but unclassified. Please protect accordingly.


1. (SBU) Summary: The Government of Guatemala (GOG) has
identified three approaches (not mutually exclusive) to
reinstate the Labor Inspectorate's authority to impose fines
on employers found to be in non-compliance with labor laws.
The Minister of Labor -- in congruence with our
recommendations -- will recommend that the President issue an
executive order to restore that authority, followed by
legislation to enshrine the intent of the order in the Labor
Code. While the Minister promised the Ambassador that the
choice would come soon, we are working to ensure the
President will forestall complicating litigation. End
summary.

To resolve the question of sanction authority...
-------------- ---


2. (U) As noted ref (A),Ministry of Labor (MOL)
representatives submitted to the inter-agency Labor Relations
Working Group (LRWG) on February 7 three complementary
approaches to restore the Labor Inspectorate's sanction
authority against companies not in compliance with Guatemalan
labor law. This authority had been removed by a 2004
Constitutional Court ruling. The three options are based on
actions by the executive, legislature, and judiciary,
respectively, and each potential course of action is
described below. These three potential courses of action
were presented to the LRWG as separate options, but the
Ministry of Labor representatives recommend that any
executive decree should be institutionalized by legislation.


3. (SBU) Congruent with our Ref (A) and (B) recommendations,
the Minister of Labor told the Ambassador February 4 that he
will advise President Berger to release an executive order
that would restore sanction authority to the MOL, despite the
failure of the LRWG to achieve a consensus. The Minister
will recommend that the executive order be followed by
legislation to ensure that this authority and other advances
in labor standards enforcement lost in the Court ruling are
enshrined in the Labor Code in a constitutionally acceptable
manner.


4. (SBU) In addition to the official role of the Presidency
in issuing executive orders and recommending legislation to
Congress, MOL contacts note that he will also have to engage
in a quiet lobbying campaign to prevent further legal
challenges by the business community until legislation is
formally adopted. As described below in paras 6 and 7, MOL
sources assure us that the President can issue such an
executive order on the presumption of constitutionality.

The Executive Course
--------------


5. (U) Although ref (A) discussed all of the Labor Code
provisions struck down or amended by the Court decision, the
majority of the Labor Code remained untouched. Ref (A) noted
that Article 271 retained the possibility of administrative
sanctions by the Ministry of Labor. More importantly,
Article 415 -- which remains in force -- specifically
authorizes the Labor Inspectorate to take direct action to
address labor law infractions, in conformance with Article
281, subsections L) and M),which also remain in force.


6. (U) Article 281, subsections L) and M) authorize
administrative sanctions by labor inspectors. Subsection M)
in particular describes the duties of labor inspectors and
notes that non-compliance with labor inspectors' citations
represent violations of labor law and that the Labor
Inspectorate will sanction such violations under the
authorization of Article 272, subsection G),which also
remains in force. Article 272, subsection G) represents the
range of fines for labor code violations (between two and
nine times the monthly minimum wage of non-agricultural
workers for violating companies and between ten and twenty
times the daily minimum wage of non-agricultural workers for
violating employees).


7. (U) Based on the authority described in paras 6 and 7, MOL
contacts believe that the President has the authority to
reauthorize the Labor Inspectorate to assess fines.

The Legislative Course
--------------


8. (U) The Constitutional Court case highlighted the lack of
clarity on many points in the Labor Code. For this reason,
the MOL will seek new legislation to restore sanction
authority to the Ministry of Labor and to enact the pending
2004 labor reform, based on ILO recommendations in regard to
child labor, sexual harassment, discrimination, and domestic
labor. The 2004 reform package remains under review by the
Tripartite Commission. Once drafted, the new legislation
would need consensus in the Tripartite Commission as well as
in the LRWG before the executive would send it to Congress.

The Judicial Course
--------------


9. (SBU) Although the Constitutional Court ruling was based
on the presumption that the Constitution reserves all
sanction authority for the judiciary, Guatemalan lawyers tell
us that, in fact, the Constitution explicitly states no such
thing. For this reason, Supreme Court staff attending the
LRWG reportedly advocated the initiation of a judicial
review. While the Constitutional Court ruling is not itself
eligible for review, interested parties could file a separate
case regarding the activities of the Labor Inspectorate based
on the same arguments used in paras 6 and 7, above.


10. (SBU) Before the 2001 Labor Code reform, the Code indeed
assigned the relevant sanction authority to the judiciary,
based on agreements in the 1996 Peace Accords. The
inefficiencies of that system, however, led the International
Labor Organization (ILO) to recommend the 2001 reform,
specifically placing sanction authority with the Ministry of
Labor. Contacts in the MOL and in labor-related NGOs tell
us, however, that they fear a judicial review might compound
the Constitutional Court's decision should the reviewing
Court make a ruling based solely on the agreements of the
Peace Accords. They suggest that such a ruling may set a
precedent that the Labor Code could not be reformed at all.

Comment
--------------


11. (U) It appears that the GOG will opt for a combination of
options one and two. The Minister promised the Ambassador
that executive action would, at a minimum, be taken,
especially in view of CAFTA implications. The MOL should be
able to reauthorize the Labor Inspectorate's authority. We
will encourage the President's personal attention to
demonstrate the Government's resolve on the issue and to
forestall litigation by the business community.


12. (U) Ministry of Labor sources appear most energized by
the possibility of an executive order, but realize they
should also draft legislation to enshrine the intent of the
order in Guatemalan law. Indeed, the GOG -- and in
particular the MOL -- needs to address the slow pace of
consultation and review regarding labor law legislation in
general, in order to enact the pending 2004 reform package.
MOL contacts assure us that they intend to develop such
legislation regardless of which option becomes GOG policy.
HAMILTON