Being unemployed after the age of 40 is practically entering unemployment or a group of people who have an inappropriate job, because due to experience and accumulated studies, they cannot have the income that the profile of that age would require.

These are people who stop contributing to social security, even though they have already accumulated 15 or more years of contributions to the Ecuadorian Social Security Institute (IESS). But they also do not have a retirement age or the number of contributions required to do so without an age limit, which in Ecuador is an accumulation of 480 contributions or more (which is 40 years of work with social security).

The ministerial agreement, which was established at the last minute by the regime of Guillermo Lass, opens the possibility for people over 50 to be employed under certain conditions that make their employment more attractive to companies.

However, Daniel Noboa’s regime suspended this ministerial agreement on the morning of November 24.

There will be no worker changes, the Workers’ Council has learned that the ministerial agreements left by the outgoing government will not be implemented

The mechanism that was created through ministerial agreement no. MDT-2023-156 from Lasso could be a tool that contributes to the national goal of creating more opportunities, according to labor analyst José Endara.

Laso’s modality is called “an employment contract with a special regime for workers who expect to retire soon from the private sector.” Its purpose is “to enable the creation of jobs for people over 50”.

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What effects would the extension of the duration of production contracts have for the workers as proposed by the resolution signed at the last moment by the Laso government and which would be repealed?

The technical report of the undersecretary for labor concludes that records of termination certificates from employers show that there are more terminations in the group with between 17 and 19 years of service (about 7,000 to 8,000) compared to those who accumulate between 20 and 24 years of age. We are talking about workers who are fired by companies in order not to oblige the employer to pay early retirement, which must occur if they have worked for the same employer for 20 years or more.

Economic analyst Olmedo Farfán indicates that employers reject resumes of people over 45 years old. Most companies do not want to have profiles that become a work obligation in the future, since the employer’s pension must be paid until the end of the worker’s life or as agreed.

These are careers that are contrary to regulations that do not squeeze all the possible productivity of these adults, because they impose obstacles to the successful end of working life. They remain halfway there, unhired by anyone and still old enough to continue producing.

Life expectancy in Ecuador is 76.7 years, not 46.6 years in the 1950s, Farfán says.

The Lasso ministerial agreement states that “working days will be part-time or full-time with a maximum of forty hours per week, which may be spread over a maximum of six days.”

And that the duration of the contract will be determined by agreement between both parties, which can be determined for the missing months of contributions to the IESS that the worker needs to fulfill the request for access to the pension.

“After this term expires, the parties may renew it by mutual agreement for periods of one year without limitation on the number of agreed extensions.” And that “in case of termination of the contract, the employer will pay compensation for eviction plus the rights acquired up to the date of termination”.

Endara states that eviction payments are 25% of the final compensation for each completed year. If the contracted term was 6 and a half years, then 25% of the last salary multiplied by six is ​​paid.

If the employer unilaterally terminates the contract prematurely, i.e. before the end of the agreed term, “the worker will have the right to compensation for damages due to early dismissal established in Article 188, compensation for eviction established in Article 185 of the Labor Law. , plus all acquired rights,” the Laso Ministerial Agreement states.

Compensation for early termination, on the other hand, amounts to three times the last salary if the working time was from 0 to 3 years, regardless of whether it was six months or a year and a half, says Endara. From the fourth year onwards it is compensation for each year or part of the service. If the employment relationship ends after five and a half years, the corresponding amount is six benefits.

“This is a special regime for people over 50 to continue working. The goal is for them to have a pension. The duration of the contract is until retirement, so it is not absolute stability as they have with an indefinite contract. And it can be renewed for up to a year, however many renewals you want,” adds Endara.

At the same time, there is a certain flexibility of work in the sense that employers can hire people over 50 years of age without establishing an employment relationship for an indefinite period, they are only bound to the contracted term until retirement with the possibility of renewal, notes the expert.

However, says Endara, “it’s not a complete solution to the barrier that exists that motivates employers to make termination decisions before people reach 20 years with the same company to avoid employer retirement.”

This is determined by the Lasso Agreement of the Ministry of Labour Under this special regime, employers will not be able to hire people with whom they have been employed for the past year.. I can’t have someone indefinitely until the age of 49 and just when they turn 50 I take advantage of that and employ them in this way, that’s not possible,” emphasizes Endara.

Research by the Ministry of Labor estimates that the group of people over the age of 50 shows that they are looking for or have a job, that is, they make up the economically active population of this age group, which is 2,380,925.

Of these, only 660,000 have adequate employment, in which they earn equal to or higher than the minimum wage, which in 2023 was 450 dollars. Some 425 thousand are underemployed, and the difference is in the category of inadequate employment (earning less than the minimum wage), unpaid employment and unemployment, which add up to 1,295,925.

“Of this group, 26.7% have a high school education, and 12.4% have a higher education, which indicates that this is a group that is lagging behind in the labor market,” says Farfán.