Colombia: New Labour Reform Bill with Adjustments and Consequences in the Employment Labour Sector

Here are the main matters that are being discussed with the aim of partially reforming the Substantive Labour Code, Law 50 of 1990, Law 789 of 2002, and other labour law regulations, along with their potential impact on the business and labour scheme.

The articles maintain aspects presented in the previous legislature, such as the modification of the night shift from 7:00 p.m. to 6:00 a.m., progressive paternity leave to 12 weeks, and reinforced labour stability for people protected by trade union privileges; reinforced occupational stability privileges for pregnant women and pre-pensioners.

It is important to remember that this labour reform bill had already been filed on 16 March but fell at the end of the last legislature when it did not pass its first debate due to a lack of quorum while it was being debated in Congress.

The new reform Bill contains modifications related to drafting adjustments, extension or reduction of applicability, elimination or addition of paragraphs, and progressivity of the article regulation. The current reform contains 92 articles, of which 25 are new, 34 articles were modified, and 33 contain similar or the same wording.

The topics of the reform are distributed into trade union associations, contracts, public policy, working hours or wages, strikes, labour stability, employment, economic benefits or leave, judicial issues, arbitration, outsourcing, social security, and collective bargaining. One out of three of the articles in the Bill is related to the nature of contracts, from their application, content and even the ineffectiveness of the contracts themselves. Employability and labour stability are also very relevant issues.

The viability of the articles is influenced by factors such as:

• Adjustments were proposed in the shadow reports and incorporated into the new text.
• The coincidences in the debates over the previous Bill.
• Commitments or consensus with specific sectors.
• Government moderation of articles.

Among the changes brought by the labour reform, the following stand out:

• EMPLOYMENT CONTRACT

In the new draft, it is reiterated that when the contract is concluded for a term of less than one year, it may be extended as many times as deemed appropriate. The wording of the text indicates that they may not exceed three years.

• REINFORCE JOB STABILITY

An express prohibition is included, as workers who are victims of gender-based violence cannot be dismissed for causes associated with such circumstances. For workers with disabilities, the review of just causes by the Ministry of Labour is now mandatory.

• SPECIAL LICENCES AND PERMITS

It includes the obligation of the employer to grant leave for employees to attend to judicial, administrative, health-legal, or any other kind of situation if it is related to gender violence.

It also mentions flexible working hours for carers of people with disabilities.

• REGULATION OF DELIVERY TECHNOLOGY PLATFORMS

Another key element of the bill is the regulation of work in technological delivery platforms, which not only defines which activities are classified as such but also determines, in terms of labour relations, that the platforms must bind these workers with an employment contract and that they must also affiliate their workers with social security. Additionally, they would be identified as dependent workers or independent, autonomous workers. They must classify their work with the platform, but they are not exclusive to any platform, either.

• TELEWORK

A substantial adjustment is made in terms of teleworking. It introduces transnational teleworking, which was not contemplated before. Additionally, it includes a connectivity allowance and a compensatory allowance. It creates the obligation to occupy a percentage of jobs in remote work modalities, in proportion to the number of companies, as follows:

• From 20 to 50 workers: 5%.
• From 50 to 200 workers: 10%.
• From 201 onwards: 15%.

A gradual implementation is foreseen within the first semester from the moment of the issuance of the law. In the second semester, it will be mandatory.

• TEMPORARY SERVICE AGENCIES AND RETAINER CONTRACTS

The direct effects of these types of contracts are due to the limit on the conclusion of commercial contracts with Temporary Service Companies, which results in a contract and, as a consequence, the termination of the contract of workers on mission and the reinstatement of the user company (main company or the one who receives the service). In the event that the term or condition of the workers on mission is exceeded, it will be ineffective.

• TRADE UNION STRUCTURE

Trade unions may prohibit in their statutes the simultaneous affiliation to other trade unions at the same level unless they provide services to more than one company. It is proposed to eliminate the prohibitions on carrying out strikes of activities and to promote campaigns aimed at disregarding laws, contracts, and conventions.

The aim is to create trade union organisations with a different scope to increase trade union rights, establish direct relations between federations and confederations, and reduce multi-affiliation.

In addition, the possibility of partial strikes, even without a majority, is proposed.

Key Action Points for Human-Resources and In-House Counsel

In terms of potential impact on companies and enterprises in Colombia, the business model is expected to suffer serious effects in structural, individual, and collective matters.

Regarding structural effects, it is important to highlight the stricter test loads for employers on terminations, the increased cost of the replacement of staff for the sole needs of the employer, and the temporary term of the contract without utility or consequences for non-compliance. Moreover, to reinforce job stability, we are expecting the creation of a new health jurisdiction in consequence of an exponential increase in claims for reinstatement in the labour and constitutional courts, stricter burdens of proof for the employer, and the need to provide more resources for payroll regarding the increase in costs of social benefits and social security contributions, as well as new rules established for pre-pension, new stability for victims of gender-based violence, and new burdens of proof to be imposed on the employer. Colombia would have the longest parental leave in the region. There will be a need for the employer to adapt operations to the new permit structure.

For individual labour matters and their effects, there will likely be an increase in labour lawsuits requesting the judicial determination of an indefinite-term employment contract, increased barriers to contractors that require a seamless operation, and an increase in the costs for low-value-added sectors. New leaves will be considered. The paternity leave will be increased for up to 12 weeks. Fixed-term contracting policies should be reviewed. Costs should be verified in the case of apprentices.

The impact of changes in teleworking would bring about a restructuring of the teleworking plans of companies, as well as increased costs and obligations.

And lastly, for collective matters, we are expecting an artificial growth of unionisation rates, an exponential increase in the strike action and duration of strikes, a reduction of effective working hours, as well as the possibility of upcoming legal claims to obtain benefits through tutela actions.

Employers are encouraged to remain ready for new employment and labour law regulations. If the new government objectives are implemented, they will need to be exercised in the workplace.

For additional information on any matter related to labour issues in Colombia, please contact Angélica María Carrión Barrero (Partner) of López & Asociados at angelica.carrion@lopezasociados.net or visit www.lopezasociados.net

For more information, please contact Joseph Granato, Communications Manager at L&E Global at joseph.granato@leglobal.org.