ECUADOR LABOR UPDATE

UNCLAS QUITO 000427 SIPDIS SIPDIS DEPT FOR WHA/AND, WHA/PPC, EB, AND DRL/IL. USDOL FOR CARLOS ROMERO. GENEVA FOR JOHN CHAMBERLIN. PLEASE PASS USTR FOR V. LOPEZ AND B. HARMON. E.O. 12958: N/A TAGS: ELAB PGOV EC SUBJECT: ECUADOR LABOR UPDATE ¶1. Summary: Following are recent labor-related developments of interest: -- MOL On Labor Code Reform (para. 2) -- MOL Raises Minimum Wage (4) -- MOL Publishes Report on Subcontracting (6) -- New Law Requires Hiring of Disabled (7) -- Dole Representatives Meet with Banana Union (8) -- Andinatel Union Leaders Fired (10) MOL On Labor Code Reform -------------- ¶2. Minister of Labor Galo Chiriboga and GOE chief free trade agreement negotiator Manuel Chiriboga met with EconCouns and PolChief on February 1 to discuss Chiriboga's recent visit to the ILO regional office in Lima and prospects for labor code reform. The Minister of Labor said that the ILO had selected an expert to help the GOE draft a labor code reform. MOL Chiriboga said he was confident Ecuador could achieve consensual labor code reform within six months, despite the lingering effects of the minimum wage controversy. ¶3. Subsecretary of Labor Ricardo Rivera told LabOff on February 14 that the climate in the National Labor Council was improving and that Walter Tapia, former head of international affairs and child labor at the MOL, had been named the technical secretary for the council on February 8. Rivera also said that the name of the ILO expert who will draft the new labor code would be announced shortly. MOL Raises Minimum Wage -------------- ¶4. Minister of Labor Chiriboga announced on January 19 that the minimum wage would be raised ten dollars, from $150 to $160. The National Salary Council (CONADES),headed by Subsecretary of Labor Ricardo Rivera, had earlier recommended an increase of $30. Chiriboga rejected the recommendation after complaints from the business community, and others, including the president of the Central Bank, claimed a $30 raise would be disastrous for the Ecuadorian economy. ¶5. Following Chiriboga's decision, the United Workers Front threatened to pursue a congressional impeachment of Chiriboga. The business community also threatened to appeal the $10 minimum wage raise, arguing it should not exceed inflation. The AFL-CIO Solidarity Center facilitated an informal meeting between Minister of Labor Galo Chiriboga and Jaime Arciniega, head of the largest union confederation on �00A;January 17. While the two had previously had very good relations, relations have since deteriorated, due in large part to the minimum wage issue. While no agreement was reached, tensions were lowered, and the unions have not followed through on their impeachment threat. MOL Publishes Report on Subcontracting -------------- ¶6. In December, the Ministry of Labor published a report on the use of subcontracting which found that only 920 of 4,625 subcontracting companies in the country were registered. (An October 2004 presidential decree required all subcontracting companies to register with the Ministry of Labor.) The report revealed that some subcontracting companies had been used to continually rotate workers to deny benefits under the labor code for permanent hires. MOL labor inspectors visited 200 subcontracting companies (none of which were registered with the MOL) on December 8 and 9, mostly in or near Guayaquil. Of these, almost half were connected to the Noboa Group, owned by banana magnate and presidential candidate Alvaro Noboa. The MOL found that these companies employed 500 subcontracted workers each. (The MOL did not fine any of the companies visited.) New Law Requires Hiring of Disabled -------------- ¶7. In December, Congress and the President approved an amendment to the labor code requiring the hiring of persons with disabilities in all public and private enterprises with more than 25 employees. During the first year of the law's implementation, enterprises with more than 25 employees will be required to hire one person with disabilities for every 25 employees. After five year's of the law's implementation, these enterprises will be required to employ a minimum of 5% disabled staff. The National Disabilities Council estimates that there are 815,000 persons with disabilities in the country able to work, of which 56 percent are not employed. Dole Representatives Meet with Banana Union -------------- ¶8. Banana union FENACLE leader Guillermo Touma reported that on January 16, FENACLE representatives met with Dole company managers and lawyers to improve dialogue on labor issues and to discuss the possibility of banana worker unionization on Dole plantations. Dole expressed openness to future meetings and dialogue and to the possibility of reaching some kind of agreement. Touma said the banana union was satisfied with these initial talks. ¶9. On January 23, 10 union leaders who worked at the Josefa banana plantation, a Dole supplier, were not allowed to enter the workplace and fired. The fired workers then went on strike outside the plantation starting January 23, but were dislodged by police on February 11. Andinatel Union Leaders Fired -------------- ¶10. On February 2, the president of state owned telephone company Andinatel Esteban Arellano, fired four of the company's union leaders, paying them a total of $632,000 in compensation. Andinatel accused the union leaders of destabilizing the company though their attacks on Andinatel management regarding its negotiations to purchase fiber optics. One of the union leaders, Giovanny Cabrera, and the previous president of Andinatel had signed a collective bargaining contract in April 2005 giving workers a 36-month period of job stability. Cabrera has threatened to initiate a law suit in the labor court for violation of this contract. JEWELL