Governor Ricardo Rosselló Nevares rejected yesterday that the repeal of the Unjust Dismissal Act (Law 80-1976) would leave the island´s working class in a vulnerable position, especially women and senior employees, because there are other labor laws to protect them.
Instead, Rosselló Nevares assured that the action will boost Puerto Rico´s economy, a position the Oversight Board endorsed yesterday while presenting a report stressing that the implementation of a series of changes to labor laws -including the repeal of Law 80- would generate an economic rebound and an increase in the island's competitiveness.
"Law 114 protects working mothers. Law 100 protects against discrimination. There are laws against retaliation. There are, if I remember correctly, about 20 statutes -both locally and at the federal level- that protect workers. Whoever considers that this leaves workers vulnerable, does not know what he is talking about or is simply lying to the people of Puerto Rico. It is that simple. This is a matter of wages, that is what happens with Law 80," said the governor at a press conference, after participating in the the Memorial Day ceremonies at Puerto Rico National Cemetery, in Bayamón.
Hours later, La Fortaleza announced that it sent the bill that enables the repeal of Law 80 to the Legislature, as well as the measure that leads to a new Incentive Code, although this one was not made public yet.
Repealing Law 80 is one of the points negotiated between the Government and the Board as part of the process to prepare next fiscal year´s budget, in exchange for an increase in the allocations for several government offices, creating a fund of $ 50 million for municipalities, not touching the Christmas bonus or sick and vacation leave, among others.
The report of the Board disclosed yesterday, there is no precise data that supports that the repeal of Law 80 will boost the economy.
"Adopting in Puerto Rico the “at-will” employment regime that prevails in the U.S. mainland will assist in reducing long term unemployment in the private sector and increase the hiring of workers as permanent, rather than temporary employees," states the Board´s documents, along with multiple exhibits and appendixes.
In addition, it indicates that while “some employees benefit from Puerto Rico’s lack of at-will employment, excessive employment protections make it more costly and risky not only to dismiss, but also to hire, an employee. There is evidence that such job protection laws lower employment opportunities”.
The report was submitted to the Governor as well as to the House and Senate presidents.
The Secretary of Public Affairs of La Fortaleza, Ramón Rosario Cortés, stated that the Executive Branch is preparing "its own study, which should be ready this week." He said that economists of the Fiscal Agency and Financial Advisory Authority (FAFAA) are preparing it.
On the other hand, Rosselló insisted yesterday that the ideal scenario was to comply with the agreement he reached with the fiscal entityy in order to avoid a legal dispute with the Board, which allows him to be strengthened to restructure the debt of Puerto Rico through Title III and without spending millions in litigation. La Fortaleza did not provide a copy of the letter of the agreement between Rosselló and the Board.
In the hands of the Legislature
Like the Board´s report, the seven-page bill to repeal Law 80 does not explain how the elimination of the statute would result in an economic rebound. Instead, it has a catalogue of all the island´s current labor laws.
But economists and labor lawyers agreed yesterday that the position of the Executive branch on Law 80 is wrong.
"Yes, there are other laws (that protect workers), but none of them addresses the element of a dismissal without just cause. While the unjust dismissal legislation disappears, workers are deprived of a right they have had for more than 80 years in our jurisdiction. They will become temporary (employees) in all jobs because employers will be able to fire employees whenever they want. In that sense, it is an attack on the working class," explained Alejandro Torres Rivera, labor lawyer and President of the Bar Association.
"Reducing Law 80 to a wages issue is to ignore the content of Law 80. It is a law of compensation to the employee that proves that the dismissal was not for just cause. The element of just cause is the core matter of Law 80," said the former Secretary of Labor and Human Resources, labor lawyer and public administration professor, Víctor Rivera.
He also explained that Law 80 establishes six instances in which the employer has to prove whether there was just cause or not to dismiss an employee.
Labor and bankruptcy lawyer, Rolando Emmanuelli, described Law 80 as the "most important protection" of labor laws. "It is the one that protects the basic employer-employee relationship and the one that establishes a regulation for dismissal," said the lawyer.
On the other hand, the president of the Association of Economists of Puerto Rico, José Caraballo Cueto, questioned the reasoning behind the labor changes proposed.
"Saying that this is a strategy of economic development is a fallacy. That does not have rigor in order to make judicious decisions -especially- when behind these decisions there will be affected people," said Caraballo Cueto.
The economist acknowledged that although there might be "irresponsible" employees protected under Law 80 to avoid being dismissed, there are others "who, for reasons unrelated to productivity, are dismissed."
"These are situations that required mechanisms to be solved," he pointed out.
He argued that if these labor measures generate economic growth, it would be necessary to question why after the labor reform approved by the Rossello administration last year, "economy has not moved forward."
Emmanuelli argued that the effect will be the other way around: hurting the economy because it is going to take productive employees out of the market. "The economy will contract more," he said.
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