Problems relating to Trade and Investment on Venezuela
16. Employment |
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Issue |
Issue details |
Requests |
Reference |
| (1) Difficulty in Dismissal | - Employers are unable to dismiss workers whose wage is less than treble of the minimum wage without justifiable reason, which in effect is very difficult to prove. - Dismissal in effect is not possible. Virtually workers are unconditionally protected, regardless of violation in the rules of employment or acedia in work attitude...This kind of practice worsens the situation further. |
- While it is necessary to protect workers from unfair dismissal, it is important and necessary that Ministries and Agencies acquaint themselves with the world standard. | - Labour Law |
| (Action) - Pursuant to Article 125 of Labor Law of 1997, in case of forced dismissal, employers must pay the double amount of the applicable Severance Indemnity Table. - Pursuant to Article 27 of Labor Law of 1997, more than 90% of the employees must be Venezuelan with more than 80% of the total wages paid to Venezuelan in an enterprise with more than 10 workers. - Since promulgation in 2002 of "Special Decree No.8,732 Prohibiting Dismissal of Employees" that prohibits in principle dismissal or downward adjustment of the terms of employment for employees after 3-months or more employment, the re-extension of this Decree has been repeated. - In May 2003, GOV announced the 30% raise in the statutory minimum wage for FY2003. Also, the Decree on Prohibition of Unfair Dismissal since May 2005 has been re-extended for several times. - Pursuant to "Doing Business 2009" by World Bank, Venezuela's rankings on the ease of doing business was 174th out of 181 countries, on "Dismissal of Employment", in particular, was 180th out of 181 countries, and on rigidity of employment (firing) was at the bottom of 100 countries. - In December 2011, the Special Decree Prohibiting Dismissal has been re-extended with exclusion of the monetary requirement for "Three Times of the Minimum Wage" or less. |
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| (2) Rigorous Labour Standard and Safety Standard | - Enterprises must expend much cost and effort to satisfy the very stringent labour standards and safety standards. | ||
| (3) Inflexible Labour Market | - To protect workers of the low-income bracket, the labour market is extremely inflexible. | ||
| (4) Restricted Employment of Foreign Workers | - The number of alien employees must be kept within 10% of total number and the amount of remuneration for the alien employees must be kept within 20% of that of the total employees in the case of enterprise with 10-employees, or more. - GOV restricts employment of foreigners within 10% of total number and of total wage of employees. MFS takes measures in accordance with this requirement. |
- It is requested that GOV repeals the restrictions. - It is requested that GOV deregulates / repeals restrictions on employment of foreign workers. |
- Labour Law, Article 17 - Labour Act, Article 27 |
| (5) Frequent Labour Disputes | - In automotive industry, labour disputes occur frequently. It gravely impacts continuation of production. | ||
| (6) Raised Minimum Wage | - Increase of minimum wages three times a year weighs heavily upon fixed costs. | ||
| (7) Stagnant Employment | - An effective deployment of workforce by reflecting each worker's aptitude, by reorganisation, etc. is not executable, due to the rules governing the ratio between indigenous employees vs. expatriates, de facto prohibited dismissal, etc. | - New Labour Law - Decree Prohibiting Dismissals |
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| (8) Nebulous and Delayed Work-Visa Acquisition Procedures | - It takes an extraordinary long period for acquisition of work permit/work visa. More precisely, in the case of enterprises with more than 10-employees, the number of foreign employees must be within 10% of the total employees, and the total amount of wages of foreign employees must be less than 20% of the total amount of total employees, etc. In case where an FFE desires to despatch expatriates in excess of the stipulated limits, such FFE must obtain Special Labour Permit, as an exceptional measure. It took Member Firm's Subsidiary (MFS) 2-years to obtain the work visa after filing application, while the examination within Ministry of Labour continued. - It takes "years" to acquire Labour Transient Visa (TR-L) after filing application under the procedures specified by GOV. |
- It is requested that GOV takes steps to simplify drastically the requisite procedures. - It is requested that GOV expedites the work visa acquisition procedures. |
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