14 octubre 2020

The pandemic crisis forces a complete redesign of labor laws. Nota El Cronista

Versión en español

The Severance and Unemployment Insurance Fund, the Universal Basic Income, and the Remote Work scheme are three of the concepts that are presently under discussion in different sectors as part of a number of reforms that are essential to overcome the crisis.

Article by Julián A. de Diego published in El Cronista on October 13, 2020

The return to normal will be accompanied by job destruction: some 1.5 job positions have been lost as a result of the pre-existing economic situation aggravated by the pandemic crisis that is still causing social, economic and labor damages, and, above all, taking a heavy toll in human lives.

The question is what will happen to supermarkets and shopping malls as compared to e-commerce, what will happen to businesses that used to sell at their own stores as compared to online shops that also offers better deals, what will happen to those who have not managed to interpret the changes in consumers’ habits, and just sit and wait at their stores while customers want products to be delivered at home.

We will run out of excuses soon, and reality will slap us in the face leaving no other choice but to face it. We lawyers are adapting quickly, working remotely with telematic equipment, advising clients, handling judicial processes and administrative claims. We can do everything our job requires from any location.

But in many cases paralyzed by the pandemic, it is obvious that if we continue with the same models that have led to this economic and social disaster, and choosing the same path over and over again, we will continue to deteriorate, aggravating the crisis and unfolding a decadent and insolvable scenario. As Albert Einstein said, “We cannot solve our problems with the same thinking we used when we created them”, and therefore the problem persists, “No problem can be solved from the same level of consciousness that created it”.

To some extent, this is what Edward de Bono called “lateral thinking”.

In the new world of ideas, it is said that change leaders should address innovation by redesigning with new approaches or from different viewpoints. This is often summarized with the term “Thinking out of the box”.

Those new corporate leaders who use exponential technologies should also become exponential leaders, developing their careers within the framework of new ideas and concepts. UBER, Cabify, Rappi, Glovo, PedidosYa and other app-based business models that bring service providers and service users together are just some of the arrangements that are taking over the new world that is created every day. Mercado Libre,, Alibaba and Amazon, they all operate in another dimension.

It seems then that we should use this short time of transition towards the return to normal to take industrial relations model to the next level, opening up a truly disruptive discussion to make all voices heard.

The new model for HR and industrial relations should not destroy what has been gained in terms of labor and employment rights so far; instead it should create such new conditions as imposed by the markets while observing the rights that have been achieved.

Let’s go over some issues that should be addressed urgently:

  1. The Severance and Unemployment Insurance Fund should remove the uncertainty that today affects many SME workers, who rarely collect their severance pay when they are terminated. In other words, this can be a comprehensive scheme, and not just for companies with fewer than 100 workers, for example;
  2. Telework, remote work, home office, mobile or nomadic work, should promote new jobs, redirecting basic instruments, as in comparative law;
  3. New hiring forms should be considered, such as contract for works under Italian law, whereby employees are only hired to carry out a project, do a particular work, meet a target or a predetermined purpose, so its effective term varies according to performance;
  4. Working hours and rest breaks should undergo a comprehensive review. In fact, working time is now faced with technological changes and new forms of work organization, where employees should meet expectations in terms of productivity and efficiency;
  5. The workweek in France was reduced from 40 to 35 hours (Lionel Jospin, 1998-2002) almost twenty years ago, and it could not be checked whether this measure helped bring unemployment down or whether it damaged company competitiveness. The truth is that in Spain, when the workday was reduced, like in France, wages were reduced proportionally, and the outcome has been uncertain. Today the discussion does not center on a reduction in working time but on the adaptation to new models of industrial relations.
  6. Collective autonomy at companies is and can be a source for modern law creation to keep up with the times and demands imposed under these ever-changing and even surprisingly disruptive circumstances. The parties have managed to adapt the regulatory framework under collective bargaining agreements, like in the case of Minera Lumbrera, Toyota, GM, Cerro Vanguardia, Minera Gol Barrick Gold and Pacua Lama, Heladerías Freddo, Tren y Parque de la Costa, and lately Bagó and Biogenesis, Papel Prensa, or UTGHRA (Union of tourism, hotel and restaurant workers).
  7. The prevalence of company-wide collective bargaining agreements over industry-wide collective agreements [disponibilidad colectiva] has proved to be almost revolutionary, even when only dealing with average working hours (Section. 198 LVT), whereby the parties may negotiate special conditions according to the demands of companies engaged in activities under special conditions; in fact this scheme has been successful in Argentina and is now extended to all aspects of labor and employment law.

If our social stakeholders meet their responsibilities, they will discuss what the future will bring, as it is already happening in other countries of the region, while we continue to be distracted by the pandemic, whose prevention recommendations are clear and definitive if the community is responsible and observes them until a vaccine is available.

If there are truly responsible change agents, this is the time to open up the discussion, agree to disagree, and finally find some common ground to set out the new conditions required by the HR and industrial relations model to face the challenges of the future and find our way through this maze of social conflict that leads us to decadence.

Por Julián A. de Diego
Por Julián A. de Diego

Fundador y Titular del estudio “de Diego & Asociados”.  Abogado, Doctor en Ciencias Jurídicas.

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