12 December, 2010
The ICEM held, as part of its ongoing series of national and international events, discussions on Contract and Agency Labour (CAL, known as “tercerización” in Latin America), at an international conference in Montevideo, Uruguay, on 16-17 November 2010. Participants at this CAL campaign event, sponsored by Swedish LO/TCO and LO Norway, came from Uruguay, Argentina, Brazil, Chile, Ecuador, and ICEM headquarters.
Judging by participants’ accounts, the problem of outsourcing and precarious labour seems to be at least as widespread in Latin America as it is in other parts of the world. It was said, for example, that it is not uncommon for up to 40-50% of the formal workforce in these countries to work for subcontracting companies, with outsourced workers often doing exactly the same work as permanent staff, but for a much lower salary.
That said, in nearly all countries in the region there also were - in addition to a large number of bad practice examples - encouraging stories on how different unions successfully managed to deal with part of the problem.
In the host country Uruguay, for example, some unions now have CAL workers as board members and, in the paper sector at least, most outsourced workers are union members. On the other hand, the country is also known for its omnipresent “use” of cooperatives, which seems to be a means in Uruguay to avoid unionisation.
These cooperatives, which were said to employ great numbers of workers, very often are small, worker-owned and independent enterprises that cater to other, larger enterprises. As such, they have become part of the subcontracting chain and it is not unusual for an entire department of a company to be turned into an “independent cooperative.”
ICEM Latin American CAL Project Coordinators Rosane Sasse and Elias Pintado
During the last few years, Uruguay has adopted two new laws on temporary employment. The most recent one, adopted in 2007, introduces the idea of co-responsibility in case something goes wrong when workers are in a triangular relationship (i.e., when working for a “third” company, which is not the “user-enterprise”).
This co-responsibility, which was mentioned by trade unionists from various countries as a key item, makes sure that workers can claim their salary, benefits, and/or social security from the user-enterprise in case “their real employer” fails to pay, or, as is fairly common, simply disappears.
An interesting presentation was made by ICEM Project Coordinator Patricio Sambonino on the contract and agency labour situation in his home nation, Ecuador, a country where the government in 2008 adopted a new law that bans “tercerización.”
According to a 2010 FES-ICEM research effort that looked into the effects of this new law, the success of the recent ban on outsourcing (the key point of the new law, which still allows exceptions for such jobs as catering, cleaning, security) has been mixed. Among the problems found by the FES-ICEM research was that workers that had to be rehired by the user-enterprise started at a lower salary than those that already had or have permanent jobs. Most workers also did not get lost rights, such as seniority or a decent pension. It was further pointed out that some companies have in the meantime found new ways of outsourcing.
ICEM Project Coordinator Patricio Sambonino
In the Ecuadorian mining sector, the level of informal work appears to be so high that the new law has not been able to make a difference. The study described the use of cooperatives in mining and in many cases, cooperatives are, in fact, just another form of bogus self-employment. In the oil sector, the new law has not brought the hoped for progress for workers. In the electricity sector in Ecuador, on the other hand, unions are very happy with the new law and the protection it brings, since many more workers now have direct and permanent contracts.
In total, over 200,000 Ecuadorian workers have been made permanent since 2008. This must be qualified by stating that in many cases, the permanent status is only for one year, after which workers were dismissed again. This is the case for many oil workers. Still, a lot of workers were able to join the social security system for the first time and a few thousand “subcontracting” companies have closed their doors.
Another important point is that, even though it was “predicted” by those opposed to the law, none of the major investors left the country as a result of the ban. Unions in Ecuador, who were not involved in the drafting of the law at the time, are now looking to dispel the negative consequences of what is, essentially, an excellent improvement for workers.
Also noted is the fact that multinational companies in Ecuador seem to have accepted the new law much easier than most national companies. Reportedly, multinational companies were faster to calculate that the changes would not bring extra costs, and if any, certainly not in comparison to their total turnover.
Participants at the Montevideo Seminar
An interesting “best practice” example was provided by the representatives of Argentinean ICEM affiliate FASPyGP, the Federación Argentina Sindical del Petróleo, Gas y Biocombustibles.
In each of their sectors (oilfields, oil refineries, and gas) good sectoral collective agreements exist. And each of these sectoral agreements also fully covers all outsourced workers. The result is that, even though the outsourcing rate is around 60%, all workers - CAL or not - receive the same salaries and the same benefits for equal work of equal value.
Participants at the meeting in Uruguay were also informed about proposed legislation that is currently being prepared in Brazil by one of the national labour centres, CUT. If and when adopted, this proposal would strengthen earlier laws that deal with Contract and Agency Labour, which now already foresees co-responsibility in triangular work relationships.
The new law would introduce, among other items, a ban on outsourcing core jobs, a strengthening of the co-responsibility, language to make sure that the union at the actual workplace can also represent the CAL workers, equal pay for equal work, and an obligation to inform unions in advance of any outsourcing plans.
Finally, also mentioned at the seminar was a study by the Brazilian ICEM affiliate FUP, which showed that it would - all things considered - actually be cheaper for state-owned oil giant Petrobras to turn all its outsourced workers into direct workers. Knowing that, there still is a long way to go for Petrobras, as the company employs just over 70,000 direct employees, with almost 250,000 outsourced staff working on its assets.