Frequently Asked Questions about Labor Standards under the Ley de Apoyo Humanitario (Law on Humanitarian Support)

Yes, the salary can be reduced without changing the working hour. Article 16 of the Ley de Apoyo Humanitario (Law on Humanitarian Support) makes it possible to reach agreements between employers and workers; however, it considers that no one may earn less than the basic salary.

This modality is for new hires. It will last one year, with the option of extending it for another year. Current indefinite contracts cannot be changed into this modality. In the emergency contract, work hours will be at least 20 hours a week and a maximum of 40 hours, executable in up to 6 days. The salary will be paid according to the hours worked.

It’s for new or existing companies. It will apply in case of increased demand for the production of goods or services, due to changes in the business line, for the sustainability of production and sources of income in emergency situations, new investments, business lines, products or services, extensions.

While the emergency contract and the reduction of work hours are valid for one year, with the option to renew for another year, agreements to change economic conditions do not have a specific duration. The employer and worker shall define in the agreement the period for the application of the new conditions.

The agreement will be directly between each worker and the employer. The employer must provide support of the company’s financial statement. If there is a company committee, the negotiation should be between the group representative and the employer. If most employees accept the conditions negotiated, the agreement will be mandatory for everyone.

It is possible to do so in accordance with article 20 of the Ley de Apoyo Humanitario (Law on Humanitarian Support), which provides for reduction of wages and work hours. In this part, the law empowers the employer to reduce work hours unilaterally, without the need of reaching agreement with the worker, when there are duly justified force majeure or accidental events. The employer may reduce the hours of just part of the staff, and not necessarily everyone. The salary paid to the worker shall be proportional to the hours worked.

According to article 20 of the Ley de Apoyo Humanitario (Law on Humanitarian Support), the employer may reduce work hours to a maximum of 50%. For example, the normal 8 hours a day may be reduced by up to 4. The worker shall earn a salary according to the real hours worked but shall not be less than 55 per cent of the remuneration received before the reduction.

Whether economic conditions are adjusted, or the work hours are decreased, IESS contributions, the thirteenth and fourteenth salaries and reserve funds must be calculated according to the salary received in each case.

This interpretation deals with dismissals due to unforeseen events or force majeure. The interpretation states that this will be valid in case there’s a total interruption of the employer’s economic activity. This applies to the dismissals that occurred before the Ley de Apoyo Humanitario (Law on Humanitarian Support) entered into force.

If an agreement has already been reached and dismissal occurs within the first year of the Humanitarian Law, the compensation shall be calculated on the basis of the last remuneration received by the worker prior to the agreement.

The Ley de Apoyo Humanitario (Law on Humanitarian Support) states that, due to misuse of force majeure, that is, when a company says it has stopped its activities but continues to operate, it must pay the amount for untimely dismissal compensation, multiplied by 1.5. The measure applies to claims filed after the Law entered into force.

The norm allows this to happen. With this, at any time the employer may tell his/her workers that, for example, during this year (2021) they have to take the vacation time corresponding to them for the next the next two years. The employer can even discount the days the worker has been absent, for any reason.