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Employers across Venezuela are bemoaning the rigidity of the labour market, saying that it cripples businesses and leaves the country trailing behind others in terms of productivity, reports the Economist. However, it’s not just the employers that have raised concerns, a growing number of workers are also increasingly dissatisfied.
The rigid labour market is a result of a plethora of pro-worker legislation that has been passed by the government in recent years. In 2012 the labour law was introduced, known as the LOTTT, which includes a virtual ban on dismissals, a shorter working week, and improved holiday and benefit entitlements.
In December 2013, President Maduro renewed a decree, which has been in force for the past decade, which, according to the Economist, makes it almost impossible for private firms to fire workers. Under LOTTT, job security is virtually guaranteed after the first month of employment. This has had a negative impact on recruitment, as employee absenteeism ranges from between 15% to 40% of the workforce. As a result, employers are reluctant to recruit.
As the country prepares for a visit from the International Labour Organisation (ILO), employers are not the only ones seeking to voice their frustrations. Unions also want to air their grievances, as in practice, only the private sector is held to the law. Hundreds of labour activists have reportedly been prosecuted for taking industrial action, especially against state-controlled firms.
Labour representatives, in addition to informing the ILO of interference with union activities, will also argue that the new central register of trade unions violates the ILO’s rules and threaten to leave most unions with no legal status.
Pablo Zambrano, a representative of Mosbase, an alliance of grass-roots unions, commented: “If you want to hold a trade-union election you have to fill in a form and take it to the government.”
As a result, by delaying elections, sometimes for years, the government can deny the legitimacy of trade union officials. The majority of collective agreements governing pay and conditions in the public sector, approximately 350, have expired. Most are not being renegotiated. According to Mr Zambrano, over half of the country’s 2.6 million public sector workers are now not covered by a collective bargaining agreement.