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OO RUEHWEB

DE RUEHQT #0427/01 0462054
ZNR UUUUU ZZH
O 152054Z FEB 06
FM AMEMBASSY QUITO
TO RUEHC/SECSTATE WASHDC IMMEDIATE 3654
INFO RUEHC/DEPT OF LABOR WASHDC PRIORITY
RUEHBO/AMEMBASSY BOGOTA 5356
RUEHCV/AMEMBASSY CARACAS 1571
RUEHLP/AMEMBASSY LA PAZ FEB LIMA 0333
RUEHGL/AMCONSUL GUAYAQUIL 9931
RUEHGV/USMISSION GENEVA 0330

UNCLAS QUITO 000427 
 
SIPDIS 
 
SIPDIS 
 
DEPT FOR WHA/AND, WHA/PPC, EB, AND DRL/IL. USDOL FOR CARLOS 
ROMERO. GENEVA FOR JOHN CHAMBERLIN. PLEASE PASS USTR FOR V. 
LOPEZ AND B. HARMON. 
 
E.O. 12958: N/A 
TAGS: ELAB PGOV EC
SUBJECT: ECUADOR LABOR UPDATE 
 
 
¶1.  Summary:  Following are recent labor-related developments 
of interest: 
 
-- MOL On Labor Code Reform (para. 2) 
-- MOL Raises Minimum Wage (4) 
-- MOL Publishes Report on Subcontracting (6) 
-- New Law Requires Hiring of Disabled (7) 
-- Dole Representatives Meet with Banana Union (8) 
-- Andinatel Union Leaders Fired (10) 
 
MOL On Labor Code Reform 
------------------------ 
 
¶2.  Minister of Labor Galo Chiriboga and GOE chief free trade 
agreement negotiator Manuel Chiriboga met with EconCouns and 
PolChief on February 1 to discuss Chiriboga's recent visit to 
the ILO regional office in Lima and prospects for labor code 
reform.  The Minister of Labor said that the ILO had selected 
an expert to help the GOE draft a labor code reform.  MOL 
Chiriboga said he was confident Ecuador could achieve 
consensual labor code reform within six months, despite the 
lingering effects of the minimum wage controversy. 
 
¶3.  Subsecretary of Labor Ricardo Rivera told LabOff on 
February 14 that the climate in the National Labor Council 
was improving and that Walter Tapia, former head of 
international affairs and child labor at the MOL, had been 
named the technical secretary for the council on February 8. 
Rivera also said that the name of the ILO expert who will 
draft the new labor code would be announced shortly. 
 
MOL Raises Minimum Wage 
----------------------- 
 
¶4.  Minister of Labor Chiriboga announced on January 19 that 
the minimum wage would be raised ten dollars, from $150 to 
$160.  The National Salary Council (CONADES), headed by 
Subsecretary of Labor Ricardo Rivera, had earlier recommended 
an increase of $30.  Chiriboga rejected the recommendation 
after complaints from the business community, and others, 
including the president of the Central Bank, claimed a $30 
raise would be disastrous for the Ecuadorian economy. 
 
¶5.  Following Chiriboga's decision, the United Workers Front 
threatened to pursue a congressional impeachment of 
Chiriboga.  The business community also threatened to appeal 
the $10 minimum wage raise, arguing it should not exceed 
inflation.  The AFL-CIO Solidarity Center facilitated an 
informal meeting between Minister of Labor Galo Chiriboga and 
Jaime Arciniega, head of the largest union confederation on 
January 17.  While the two had previously had very good 
relations, relations have since deteriorated, due in large 
part to the minimum wage issue.  While no agreement was 
reached, tensions were lowered, and the unions have not 
followed through on their impeachment threat. 
 
MOL Publishes Report on Subcontracting 
-------------------------------------- 
 
¶6.  In December, the Ministry of Labor published a report on 
the use of subcontracting which found that only 920 of 4,625 
subcontracting companies in the country were registered.  (An 
October 2004 presidential decree required all subcontracting 
companies to register with the Ministry of Labor.)  The 
report revealed that some subcontracting companies had been 
used to continually rotate workers to deny benefits under the 
labor code for permanent hires.  MOL labor inspectors visited 
200 subcontracting companies (none of which were registered 
with the MOL) on December 8 and 9, mostly in or near 
Guayaquil.  Of these, almost half were connected to the Noboa 
Group, owned by banana magnate and presidential candidate 
Alvaro Noboa.  The MOL found that these companies employed 
500 subcontracted workers each.  (The MOL did not fine any of 
the companies visited.) 
 
New Law Requires Hiring of Disabled 
----------------------------------- 
 
¶7.  In December, Congress and the President approved an 
amendment to the labor code requiring the hiring of persons 
with disabilities in all public and private enterprises with 
more than 25 employees.  During the first year of the law's 
implementation, enterprises with more than 25 employees will 
be required to hire one person with disabilities for every 25 
employees.  After five year's of the law's implementation, 
these enterprises will be required to employ a minimum of 5% 
disabled staff.  The National Disabilities Council estimates 
that there are 815,000 persons with disabilities in the 
country able to work, of which 56 percent are not employed. 
 
Dole Representatives Meet with Banana Union 
------------------------------------------- 
 
¶8.  Banana union FENACLE leader Guillermo Touma reported that 
on January 16, FENACLE representatives met with Dole company 
managers and lawyers to improve dialogue on labor issues and 
to discuss the possibility of banana worker unionization on 
Dole plantations.  Dole expressed openness to future meetings 
and dialogue and to the possibility of reaching some kind of 
agreement.  Touma said the banana union was satisfied with 
these initial talks. 
 
¶9.  On January 23, 10 union leaders who worked at the Josefa 
banana plantation, a Dole supplier, were not allowed to enter 
the workplace and fired.  The fired workers then went on 
strike outside the plantation starting January 23, but were 
dislodged by police on February 11. 
 
Andinatel Union Leaders Fired 
----------------------------- 
 
¶10.  On February 2, the president of state owned telephone 
company Andinatel Esteban Arellano, fired four of the 
company's union leaders, paying them a total of $632,000 in 
compensation.  Andinatel accused the union leaders of 
destabilizing the company though their attacks on Andinatel 
management regarding its negotiations to purchase fiber 
optics.  One of the union leaders, Giovanny Cabrera, and the 
previous president of Andinatel had signed a collective 
bargaining contract in April 2005 giving workers a 36-month 
period of job stability.  Cabrera has threatened to initiate 
a law suit in the labor court for violation of this contract. 
JEWELL