Deep divisions between business and labor negotiators could stall the much-anticipated update to the Dominican Republic’s labor laws, currently being debated in the National Congress.
On Wednesday, 4 December 2024, business leaders met with the Senate Special Commission, chaired by Senator Rafael Duluc, in a late attempt to discuss the proposed reforms. The Senate has said its position is to say no to any change in the severance clauses.
As a middle ground, representatives from the National Business Council (Conep), the Dominican Confederation of Employers, and several other business associations propose maintaining the severance pay system while preserving workers’ acquired rights. They suggest an alternative labor regime for new employment contracts.
This new regime would maintain severance pay as a right but with dual caps: a six-year seniority limit and a maximum payout equivalent to ten months’ salary.
Celso Juan Marranzini, president of Conep, emphasized the need for labor reforms to stimulate formal job creation and make it easier for both businesses to comply with labor laws, particularly regarding wage-setting committees. The severance payment system is a heavy burden for small businesses.
However, labor unions have issued a stern warning to both the business sector and the government, threatening to block the entire reform if the severance pay system is eliminated.
Rafael “Pepe” Abreu, president of the National Confederation of Trade Union Unity (CNUS), stated that the business proposal to reduce severance pay amounts would face strong opposition from workers and politicians.
“No political sector in the Senate or the Chamber of Deputies will support such a measure, as the political cost is too high,” he asserted, as reported in El Dia.
The severance system is seen as one of the reasons wages are low in the Dominican Republic. Businesses need to take into account that the severance and other benefits almost double the wages paid.
Read more in Spanish:
El Dia
N Digital
El Caribe
Noticias SIN
Noticias SIN
Diario Libre
5 December 2024