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Ecuador: Proposed Reform of Labor Code

(Dec. 12, 2014) Ecuador’s Executive branch has proposed amending the Labor Code to add a classification of types of work and specification of rights and obligations according to the different work activities. (En el Borrador de Código Laboral constan nuevas formas de empleo, EL UNIVERSO (May 9, 2014).)

The new work classification includes the following:

• Household: work performed without compensation at home, with the right to social security guaranteed;

• Telecommuting: work performed offsite through the use of information technology provided by the employer, which must respect family privacy if performed at the employee’s home;

• Transportation: work time, including overtime, may not exceed, ten hours a day and 50 hours a week. The employee is entitled to a 30-minute break for every four hours of driving;

• Sexual: workers in sexual services, whether self-employed or working for someone else. Work at nightclubs is regulated by labor standards applicable to that type of business;

• Domestic: work performed by someone residing in the employer’s home, which entails the right to a mandatory weekly rest time of 48 consecutive hours, with the same number of days off and vacations that other workers receive.; and

• Mining: workers performing duties in underground mines or quarries are required to undergo a preventive medical examination and periodic medical examinations, in addition to other rules specifically applicable under the mining laws. (Id.)

The Minister of Labor stated that these changes would allow for better enforcement of labor rights, while noting the need to improve compliance with labor standards through stricter controls. (Id.)

On November 22, 2014, President Rafael Correa submitted additional amendments to the Labor Code. The new proposals are aimed at strengthening workers’ rights, such as the elimination of fixed-term hiring, under which the employee could be fired for no reason after two years, with no compensation for the termination. (Las Reformas laborales un Paso mas a la Justicia Social, EL CIUDADANO (Nov. 22, 2014).) In addition, the proposal prohibits the dismissal of pregnant employees and union leaders, as well as firings due to sexual orientation; such terminations based on the employee’s condition or status will become null, and rehiring by the employer will be required. (Id.)

The President’s proposal addresses both the income inequality issue, by limiting the gap between the highest paid managers and the lowest level worker, and the democratization of labor representation, by establishing free, universal, and secret elections of labor union representatives. It also updates the salary system so that workers receive a “bonus” or “extra pay” pro-rated throughout the year and not at the year’s end in a lump sum. (Id.) The proposal also extends social security benefits to housewives. (Id.)