Working up to twelve hours a day for more days off in the week, special days for companies that justify the reasons and obtain the authorization and type of contract so that unemployed people over 50 can pay pension contributions are part of the new regulations issued by the Ministry of Labor for several days before the end of Guillermo Lasso’s government.

In six ministerial agreements, signed on November 21 by the outgoing minister Patricio Donoso, some working conditions established as a result of the 2020 pandemic were expanded and more general and two new contract modalities were created: for young people who are employed in call center and for those who, for example, have 20 years of contributions to the Ecuadorian Social Security Institute (IESS) and are employed in time until retirement.

Labor lawyer Angie Toapanta warned about these changes announced by the Ministry of Labor this Thursday, November 23, when the new government took office. It is questioned that the maximum working day is increased from 8 to 12 hours a day and that days that can be accumulated up to 70 continuous days are allowed, and that for activities that require continuous provision of services. He also believes that there will now be “three years of uncertainty and instability” in production contracts that can now be renewed up to twice. And he hopes that the new minister of labor will reconsider and cancel it.

Minister of Labor Daniela Noboe continues the analysis of the basic salary for 2024

In the case of working up to 12 hours a day, this was already in effect in those contracts, and the previous Ministry justified the inclusion in the so-called dynamic duty in order to “achieve the higher goals of family stability; staff, time efficiency, commuting and more free time during the week.”

These are the six ministerial agreements that are causing controversy:

Business trips

The Ministry issues guidelines for the application of working hours in the Ministerial Agreement no. MDT-2023-161.

Regular or regular days not subject to approval by the Ministry of Labour

Dynamic days

A special working day could occasionally last up to 12 hours, according to a document from the Quito Chamber of Commerce

Special days due to the nature of economic activity

Continuous day

Underground working days

Production contracts can be renewed twice

The productive contract is up to one year with a trial period of up to ninety days. Now it can be renewed twice for the same period, so it cannot be longer than 3 years in total. Previously, only one renewal was allowed. At the end of that term, if the parties agree on the continuation of the employment relationship, the employment relationship becomes a contract for an indefinite period.

In the Ministerial Agreement no. MDT-2023-160 issued by the outgoing Minister of Labour, it is stated in the general provision that the contracts were signed on the basis of the previous Ministerial Agreement no. MDT-2020-220 of October 30, 2020. They will apply these regulations until the end of their validity, while new contracts will be regulated by this reform.

Reform of business contracts

Entrepreneurial contracts have certain changes in the new Ministerial Agreement no. MDT-2023-158:

The technical report of the undersecretary for labor talks about the increase of this type of employment: they started 2020 with 9 registered entrepreneurial contracts, in 2021 165 contracts were recorded, and in 2022 418.

These contracts have a term of one year, and within that, trial work of up to ninety days can be agreed in the first contract, and they can be renewed until the period in which the confirmation of the National Register of Entrepreneurs is in force.

Employ young people call center

Special contracts for people over 50 years old

Ministerial agreement no. MDT-2023-156 establishes a special employment contract for workers who expect early retirement, and is intended for those who have lost their jobs, and thus the possibility of retirement. Settlement records show that separations are higher between 17 and 19 years of service (roughly 7,000 to 8,000), than between 20 and 24, according to the report by the undersecretary of labor. This special contract is intended for three groups:

It will not be possible to switch from the existing contract to this new one, because it is forbidden to apply this modality if the employment relationship between the same employer and employee ended during the immediately preceding year.

The number of contributions the worker has, the duration of the contract, the type of contracted day and the work schedule must be specified in the contract.

Working days will be part-time or regular working hours with a maximum of 40 hours per week, which can be spread over a maximum of six days per week. The weekly rest will last at least 24 consecutive hours.

The compensation cannot be less than the basic salary or salary by activity for regular full-time work or its proportional salary for part-time work. And contributions to the IESS will be paid on the agreed day and compensation if the work is interrupted, due to periodic or seasonal events; and, for weekly or monthly payments, if it is stable and continuous work. The payment of the thirteenth and fourteenth salary and profit will be proportional to the time actually worked.

The duration of the contract will be determined by agreement between the parties and may be determined for the remaining months of paid social insurance contributions that the worker needs for retirement. After this period expires, it can be renewed by mutual agreement for periods of one year without any limit on the number of agreed renewals.

In case of termination of the contract, the employer will pay the eviction compensation plus the rights acquired up to the date of termination, according to the following article. If the employer unilaterally terminates the contract prematurely, the worker will have the right to compensation for damages due to early termination, severance pay and all acquired rights.

The reasons for approval set out in Articles 172 and 173 of the Labor Law, as well as the reasons for contract termination from Article 169 of the Labor Law, will apply to this type of contract.