Thursday, April 18, 2019

Fiscal board applauds vote to repeal Puerto Rico’s unjust dismissal law

By on June 14, 2018

SAN JUAN – The Puerto Rico House of Representatives passed Senate-amended Bill 1011 Thursday to repeal Act 80, the wrongful employee-dismissal law, that aligns with an agreement reached by Gov. Ricardo Rosselló and the island’s fiscal oversight board and adds a severance “Compensation Fund” for laid-off employees.

“We had a deep discussion with the Legislature and with the members of the [fiscal board] to ensure the Christmas bonus for all workers in Puerto Rico, holiday and sick leave for employees in the private sector, and the funds needed for the municipalities, the University of Puerto Rico and for our economic development,” Rosselló said in a statement issued shortly after the vote stressing the “need to comply with the agreement reached by his Administration” with the board.

“The Fiscal Oversight Board welcomes the legislation that repeals Act 80,” it said in a separate statement. “We believe it is an important step towards a dynamic business environment that promotes the creation of jobs, attracts new investment and drives the growth of the economy of Puerto Rico. We await the prompt resolution of this matter in the Legislature in a manner consistent with the Fiscal Plan certified on May 30, 2018.”

In addition, Rosselló said, “along the way, we have been able to work on a compensation fund for workers who will no longer have the remedies of Act 80 and a postponement of those effects until June 2021 for employees who have [worked] 15 years or more.”

A fund to award up to $9,500 to “each employee unjustifiably dismissed,” was added to the measure by House lawmakers. It will be funded with “$100 million of the $345 million from the multi-year allocation for economic development contained in the agreement between the Board and the governor,” according to the governor’s office, La Fortaleza.

House Speaker Carlos “Johnny” Méndez (Courtesy)

According to La Fortaleza, the governor said he will “continue his dialogue with the president of the Senate, Thomas Rivera Schatz, and with the majority delegation of that body to approve the measure that ensures the benefits guaranteed in the agreement” with the fiscal board.

The fund will be of $100 million until 2021 to compensate employees who have worked for 15 years or less in their current employment. Ramón Rosario, the secretary of public affairs and public policy, explained that “as a substitute to the severance provided in Act 80, dismissed employees will have p to $5,000 in direct aid to replace the salary they stopped earn after an unjustified dismissal and a voucher of $4,500 to cover the salary of the first year in their new job.”

Rosario further said, “[T]he fund will be available even to employees who today have no protection under Act 80 when their dismissal occurs due to [a business’] closure, restructuring or employer’s loss of profits. In addition, for employees with more than 15 years in their employment, the protection of Act 80 will be available until the year 2021 as a transitional measure to the new at-will-employment system that runs in 49 of the 50 states of the Nation.”

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