Yesterday, when the Senate put an end to the debate on the Unjust Dismissal Law (Law 80-1976), they not only opened the door to reverse the agreement on the budget reached between the Executive Branch and the Oversight Board, but also intensified the atmosphere of confrontation between the President of the Senate, Thomas Rivera Schatz; Governor Ricardo Rosselló Nevares and the entity that controls public finances.
As soon as Rosselló Nevares knew that the Senate leadership did not support repealing Law 80, as demanded by the Board, he lashed out at Rivera Schatz, whom he accused of acting against the island and motivated by political reasons.
At the same time, the President of the Board, José Carrión, who was in Washington DC yesterday -just as Rosselló- warned that keeping the labor statute in effect would imply reversing the certified fiscal plan that includes cuts in vacation and sick leave and the Christmas bonus.
"There is a certified plan. If they do not (repeal it), we revert back to the certified fiscal plan," said Carrión after participating at a forum at the conservative Heritage Foundation, in which, along with the also member of the federal entity, Andrew Biggs, he defended the structural reforms they want to impose on the island.
Reverting back to the certified fiscal plan would mean, at least, more than $ 300 million in budget cuts over the next five years.
Carrión said that structural reforms seek to "generate economic growth." "We have limited powers (to make decisions that boost economic growth), but one of them is the labor area," he emphasized when answering questions from journalists.
The members of the Board will meet on Friday next week to discuss the budget for the next fiscal year, which would start on July 1.
Pointing at Rivera Schatz
In criticizing Rivera Schatz, Rosselló Nevares said that the leader of the Senate opted to "hamper" his administration, and held him responsible for the millions in cuts that municipalities and other government entities will suffer if the deal reached with the Board is broken.
"With this regrettable decision by the President of the Senate, Puerto Rico has just seen how to make politics and not how a government of the future should be made in times of challenges and difficulties. We will follow the path of change and transformation that we have forged. However, this was the time to unite and, together, leave behind the shameful past we inherited. He chose to obstruct, he chose to follow the tricks of the past that have put us in this situation," said the governor in written statements.
"The risk of the loss of billions of dollars for Puerto Rico as a result of restructuring the debt falls on this action. Likewise, the loss of millions of dollars in allocations for municipal governments that we had achieved also falls on the President of the Senate," he added.
Challenge in court
Meanwhile, Rivera Schatz anticipated that he would go to court to challenge the power of the Board to change the budget.
"The Senate considers the Law 80 issued settled. Law 80 will not be repealed," said Rivera Schatz. "If it were up to us to go to court to litigate against the Board, I anticipate that I have already talked with lawyers to do so," he added to journalists at the end of yesterday's meeting, which included representatives of the Executive Branch.
The repeal of Law 80 was a specific condition requested by the Board in exchange for disbursing additional money for municipalities, the University of Puerto Rico and guaranteeing vacation and sick leave for private sector employees.
During the meeting of the New Progressive Party (PNP) majority caucus), Senator Miguel Romero´s proposal to include into the Anti-Discrimination Statute (Act 100-1959) some remedies provided in Law 80 was defeated in a 15 to 5 vote. While making the decision, the majority chose not to address to the matter during the current session. The last day to approve measures is next Monday.
Romero proposed creating a system of fixed compensations for dismissals that only violate the Anti-Discrimination Act 100, but insisted on repealing Law 80, which deals with another area of labor law by providing remedies for dismissal without just cause.
Those elements of Romero's proposal that might clash with the bill to repeal Law 80 endorsed by the House would be harmonized, but the special fund devised by PNP representatives to compensate with public funds those workers that were fired in the private sector would be protected.
Rivera Schatz was surprised at La Fortaleza's insistence on maintaining a $ 100-million special fund to compensate those employees with 15 years or less of service who are may be dismissed as of January 1, 2019.
"That changed the opinion of some colleagues," said a senator on condition of anonymity, pointing out that the insistence caused Romero's proposal to weaken.
El Nuevo Día learned that Senator Migdalia Padilla stated in the caucus that the $ 100 million was necessary to meet other needs.
Rivera Schatz explained that he opposed Romero's proposal because it repealed Law 80. He recalled that the Board never defended the of labor reform bill in public hearings, and that no expert could show that eliminating that statute would result in economic benefit.
"There is a group (those workers dismissed without just cause) who, if they have no way to establish a cause of discrimination, would be left unprotected before unjust dismissal," said Rivera Schatz, referring to Romero´s proposal. Romero was Secretary of Labor and Human Resources.
During the vote on Romero's proposal, all the members of the majority participated, except for Carmelo Ríos, who is away. The onlyones that favored the initiative were Romero, Itzamar Peña, Margarita Nolasco, Nelson Cruz Santiago and Abel Nazario, whom the Governor recognized, since "despite the pressures, they tried to avoid the misfortunes we are facing today."
The House keeps distance
The House of Representatives will have a different relationship with the Board. Yesterday, House President Carlos "Johnny" Méndez said that he has to study the probability of prevailing in a lawsuit with the Board in defense of the budget items. He added that he considers the controversy regarding Law 80 over.
When asked if the House would join a lawsuit initiated by the Senate regarding the cuts applied by the Board, Méndez replied: "We have to sit down to evaluate the arguments and make a decision."
"PROMESA Act has supremacy over everything. It does not even allow us to sue the Board. We have to see what the arguments are, the legal basis for making a decision. It will not be a futile exercise. If we have more than a 50 percent chance of prevailing, of course we will be there," he noted.
He considered that, if he opts for litigation, he would challenge the ability of the Board to establish public policy.
In reacting to the Senate caucus´ decision, the Secretary of State and acting Governor, Luis Gerardo Rivera Marín, who attended the meeting, warned that each senator "will have to assume his responsibility."
"Each one will have to assume his responsibility facing the consequences that the Governor clearly expressed for not being able to complete the agreement reached with the Board," said Rivera Marín.
"They (the Board) released a communication with the consequences. Public employees are not going to receive their Christmas bonus," added the Secretary of State.
It was said that Rosselló Nevares, who lobbied directly with several senators previously, would participate by phone, but it did not happen.
Rivera Schatz also rejected a request from Senators Henry Neumann and Cruz Santiago for the caucus to meet after the vote on Romero's amendment, but without government officials.
The Secretary of Public Affairs of La Fortaleza, Ramón Rosario Cortés; Christian Sobrino, representative of the Governor before the Board, and the Secretary of Labor and Human Resources, Carlos Saavedra were also present.
None of the officials anticipated what step the Executive Branch would take facing the Senate´s decision.
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