Quality Puerto Rico jobs in jeopardy amid proposed labor reform
Editor’s note: This story first appeared in the May 3-9, 2018, issue of Caribbean Business.
Puerto Rico will not be more competitive under the proposed labor reform. This appears to be the consensus of two lawyers, who theorize the legislation has defects that will affect the future of workers and employers doing business on the island.
As a spearhead for the legislation, the island’s fiscal oversight board presented a letter to Gov. Ricardo Rosselló, Senate President Thomas Rivera Schatz and House Speaker Carlos “Johnny” Méndez emphasizing so-called at-will employment, a contractual relationship between employee and employer that has been tested in other countries with questionable results.
The new model is intended to reduce or eliminate some of the protections contained in other legislation that benefits workers to promote job creation and increase the island’s labor-force participation rate—which is less than 40 percent, the lowest in the United States—to 55 percent. The latter rate is tied to the possibility of increasing the minimum wage for those age 25 and older who currently earn the federal minimum wage of $8.25 an hour.
Although the experts agree the measure—which they consider a copy of legislation from U.S. and European Union jurisdictions—has the potential to create new employment opportunities, both expressed serious concerns to Caribbean Business about whether sacrificing rights that took the working class a long time to obtain was the least onerous alternative to make Puerto Rico more competitive.
“I’m very concerned that dismissals without just cause are disguised and not [seen] as something discriminatory and used as a pretext that the law allows for firing whoever…, whenever…, for whatever reason, regardless of their status,” said labor law expert Jaime Sanabria, who added that, contrary to the general perception, repealing Act 80, Puerto Rico’s Unjustified Dismissal Act, will not dissuade employees from going to court under an ordinary civil lawsuit and asserting their rights. Moreover, the lawyer criticized the fact that with the disappearance of an advanced legal structure such as Act 80, it will be workers—the weakest party—who will have the greatest economic burden to demonstrate that their cases have merit.