Constitutional Court accepts suit against labor reform

The Constitutional Court on Monday said it had accepted a suit filed by the main opposition Socialist Party and the Plural Left questioning the legality of a number of aspects of the labor reform approved earlier this year, which makes it easier and cheaper to sack workers.

The specific articles the two groups object to include the establishment of a trial period of 12 months for incoming workers, allowing a company’s management to make substantial modifications to agreed terms of employment such as salaries, the working day and the distribution of work, as well as permitting companies not to apply collective agreements under determined circumstances.

The suit also questions the constitutionality of mass dismissals, alleging economic, technical, production and organizational reasons, which allow companies to make severance payments of 20 days’ wages per year worked up to a maximum of one year. In the case of unfair dismissal, compensation was reduced to 33 days’ wages up to a maximum of two years from 45 days up to a maximum of 42 months’ salary.

“The reform substantially alters the democratic model of labor relations that we have all created over the course of the past three decades, with high doses of consensus and social dialogue,” the Socialists said in a statement.

“This is a far-reaching departure from the abovementioned democratic model and the balance of the interests in play in the complex world of labor relations, backed by our judicial system. We consider the abovementioned reform contradicts the specific mandates in the Constitution in a number of essential points,” the statement added.

Congress, the Senate and the government have 15 days to submit arguments with respect to the suit.