Friday, April 2, 2010

The Count: a budding friday tradition

8,758... the number of workers fired in Chile after the earthquake through a "force majeure" or "catastrophe" clause in the labor code.

Following the Feb. 27 earthquake businesses have been taking advantage of Article 159, N°6 of the labor code. This article allows employers to fire employees without paying severance packages by invoking force majeure reasons (acts of God) or catastrophes.

Now, obviously this type of policy makes sense and certainly many small businesses were completely decimated by the earthquake. But it is becoming clear that in many cases it has been abused and some businesses are simply using the earthquake as an excuse to get around labor standards.

These types of abuse have been limited in well unionized firms, but firms with weaker or no unions have essentially been able to do whatever they want. For instance, in some cases employers have fired workers through the force majeure clause only to rehire them with lower salaries.

CIPER has compiled another list of shame. This time it lists all the companies that have fired employees through Article 159. One revelation is that the company that has fired the most, 938, is owned by the Mayor of Santiago, Fernando Echeverría. As our readers may recall, Echeverría also owns a construction company responsible for a few of the buildings damaged during the earthquake and is a long time business buddy of president Piñera.

Chile's La Nación reported one of the more bizarre examples coming from the southern island of Chiloe, where one company actually went as far as to declare 90 of its workers dead as a pretext to fire them!

Long story short, the company first tried to fire them invoking force majeur. The problem was, however, that Chiloe was barely hurt by the earthquake at all, making the move somewhat suspicious. So, in a brilliantly sneaky move the company instead decided to claim that the 90 workers were dead.

But how could this possibly backfire? Well, a lawyer representing the 90 workers who lost their jobs had this to say:
"The workers are alive and kicking, so much so that they all accompanied me to the Labor Tribunal to file a complaint against the company."
We can only hope that this particularly shameless company will get what's coming to it.

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