Uruguay

With Eduardo Bonomi, Minister of Labor and Social Security

Uruguay has its own model of labor relations

 

In the 1960s and early 1970s, he was a member of the guerrilla organization Movimiento de Liberación Nacional - Tupamaros (MLN).
He was imprisoned for 13 years in the Penal de Libertad, a maximum-security prison that was almost like a concentration camp. Since 2005, he heads the Ministry of Labor, and his administration has received the highest levels of approval from the population. Bonomi met with Sirel in his office at the old ministerial building, in the threshold of the Ciudad Vieja district and near the port of Montevideo. What follows is a summary of the extensive conversation we had with him.

 

   

 

 

A unique minister

 

-What did you do before you were arrested? Were you a student? Did you work?

-While I was still in high school I played professional soccer in a team called Wanderers, one of the so-called “small clubs” of the Uruguayan league. I continued playing even after I started my university studies at the School of Veterinary in 1969. I was thrown in jail in 1972, when I was in my fourth year of University.

 

-Were you forced to go underground?

-I had to go partially underground between January and June 1972, when I went completely underground. That lasted a month, because I was arrested on July 21st of that year.

 

-Had you already formed your own family by then?

-I was married and had a son who at the time of my arrest was barely a year and a few months old. We didn’t see each other again for almost two years.

 

-Were you always in the Penal de Libertad prison?

-At first l was held for six months in the 13th Infantry Battalion, and from there I was taken to Libertad. In 1975 I was taken three times to the Department of Colonia to be “interrogated,” and then returned to the same prison were I was held until 1985.

 

-What did you do when you were released from prison?

-I worked in a fish processing plant from May 17, 1985 to April 1999, when the company was shut down. I was general secretary of the plant’s trade union, and co-founder of the Uruguayan Congress of Fish Industry Workers (CUTIP), an association that gathered the unions of all the fish processing plants in the country. I was a member of the Governing Committee and the Executive Secretariat of that body. At the same time, I was on the Central Committee of the MLN (National Liberation Movement), and in my capacity as member of that committee I was co-founder of the Popular Participation Movement (Movimiento de Participación Popular - MPP), which is currently the majority sector in Uruguay’s governing party, the Frente Amplio Coalition (FA). From 2000 to 2005, I represented both organizations in the Political Board of the FA. I also have two daughters, from a second marriage, which are currently 20 and 16 years old.

 

-Are you still a member of the MLN?

-I am on the MLN’s Central Committee and its Executive Committee, and on the National Governing Board and Executive Committee of the MPP. In the 2004 national elections I was elected congressman, and 15 days after taking office I was appointed Minister of Labor and Social Security. Present at the inauguration ceremony were the outgoing Minister, Santiago Pérez del Castillo, and the Minister of Labor of the Republic of Argentina, Carlos Tomada, with whom I have a relationship that goes back several years. He chose to honor my appointment with his presence.

 

The main ideas underpinning his administration

 

-What were the first decisions you made as Minister?

-I took office at 9 am and five minutes later I had signed a resolution withdrawing the privilege that allowed Ministry Directors to have an official car at their disposal 24 hours a day and which they took home. The second resolution I signed was a cooperation agreement between our Ministry and the Argentinean Ministry.

 

-Can you confirm if it’s true that Uruguay currently has, and has had for the past few years, the world’s highest rate of unionization with respect to its population?

-I don’t have that data for the rest of the world. I can tell you however that at the last Congress of the PIT-CNT (the central workers’ federation), which was held some months before the election, 109 thousand union members were declared, and by now the federation has close to 250 thousand members, which means it grew approximately 150 percent. This information is already old, so it’s likely that that figure is higher now. Unfortunately, I have no way of comparing it to figures from other countries. But we must point out that this membership is not even close to the rate of unionization that existed in Uruguay before the dictatorship, which was much higher.

 

-It is obvious that this growth is spurred by the policies deployed by the new government through this Ministry. What are the key ideas that you brought into your administration?

-We had very specific and well-defined ideas. Our Ministry was perhaps the ministry with the clearest idea of where we should begin working, as we had focused our strategy in four or five essential measures:

 

·         Reinstating collective bargaining under the Uruguayan modality, which consists of the Wage Councils governed by the Law of 1943.

 

·         Incorporating rural and domestic workers into the Wage Councils, something that had never been done before in the history of Uruguay.

 

·         Radically modifying employment policies, because the policies implemented as of 1991 were aimed more at providing funds for unemployed workers than at generating jobs. Our aim was to use unemployment funds to promote active employment policies.

 

·         Another key step in our administration was to strengthen the Labor Inspection Bureau.

 

·         We also sought to protect union activities by promoting the adoption of a Trade Union Rights Act.

 

·         And a proposal for limiting the workday in agricultural activities, for which we had already prepared a draft.  

 

These were the key ideas that would underpin our administration. 

 

-What have you done to implement them?

-I took office on March 2, 2005, and on March 7 of that year we convened the traditional Wage Councils and the rural ones, and called all civil servants to a negotiation.

 

The Wage Councils 

 

-What are the Wage Councils?

-The Wage Councils are a three-party model of collective bargaining organized according to industrial sector. Each Wage Council is formed by three representatives of the Executive Branch of Government, two of management, and two of the workers. These Councils decide on the minimum wage for each category, and on wage increases, but they can also discuss the categorization, and pursuant to the Law (although this is not common practice) they can act as an inspection body to control compliance with the agreements. They can also operate as mediators in labor conflicts. The Executive Branch appoints its representatives directly, while the others are elected by secret vote. These Councils were created in 1943, they were suspended in 1968, during a period already marked by authoritarianism, and they were reinstated in 1985 with the first presidency of Julio María Sanguinetti, who issued a decree to modify the original regulations, so that the representatives of management and the workers were to be appointed directly by the chambers and unions. This meant that Wage Council resolutions could not be turned into law, and it was all left to the discretion of the Executive Branch, who sanctioned the resolutions through a decree that often left out the demands of the workers.

 

But then they disappeared again…

-In 1991, Luis Alberto Lacalle’s government stopped convening them, and in 2005 we enabled them again under the scheme established by Sanguinetti, but now we’ve presented a bill to Congress whereby a National Bargaining System is created, connecting the establishment of a national minimum salary by decree, with three-party bargaining by industry sector under the Wage Councils and two-party bargaining at the company level, where issues that are not discussed in the Councils can be solved. This bill modifies the 1943 Law, enabling both modes of appointing representatives, that is, by election or by joint decision of members, which would enable the body’s resolutions to be turned directly into law. We’re still adjusting the details on this point in the parliamentary discussion.

 

-How did the Wage Councils work?

-Twenty-one groups of traditional Wage Councils were formed, which in 2005, including groups, subgroups, chapters and folders, produced an initial 186 Collective Agreements. The number of agreements totaled 213 in the second round of the Councils. These last rounds included the three rural groups. Outside of these forums, a bargaining space for employees of the public sector was generated.

 

-What happened with the Labor Inspection Bureau?

-We were able to hire inspectors under exclusivity contracts, adjusting their compensation accordingly so that they can live on a single salary. They are currently paid a little over 2 thousand dollars a month as base salary. We were also able to hire 33 new inspectors and seven professionals, including physicians, chemists, and engineers, among others, that are now cooperating with the work of the inspectors. We have not yet been able to acquire 4x4 vehicles that are essential to work in rural areas, but we do have four 4x2 trucks that are a great help in terms of transportation to rural worksites such as estancias, mines, and forested fields.

With respect to employment policies, we’ve modified the regulations so that, for example, unemployed workers can choose to collect unemployment insurance in a single payment, when they can prove their intent to invest in a business that can be recovered by a cooperative or under any other social economy scheme, thus enabling the preservation of jobs. In addition, we’ve strengthened what we call the Work Observatory, with the aim of permanently monitoring the labor market and adapting the training structures available to workers to focus on the most dynamic and fastest growing sectors of activity. This may seem like the obvious thing to do, but that’s not how it was being done. Until now, training courses were opened randomly.

 

-Has any progress been made with respect to limiting the length of the workday for rural workers?

-In the framework of the Wage Councils we presented a bill that was approved by the workers and the Executive Branch and which is now under discussion in Parliament. Another objective was met in late 2005 with the approval in Parliament of the Trade Union Rights Act. This means that of all the objectives we had set for ourselves at the start of this administration, the only one pending is the establishment of the Wage Council for domestic workers. We convened the Council, but there were no representatives of the employers; there is, however, a workers union for the sector, formed after 2005. Some time ago, I decided that every time I was asked to participate in seminars, colloquiums or events on gender equality, where this issue is always present, I would appeal to the other participants -who for the most part employ domestic help- to form an employer counterpart for this Wage Council. Finally, the League of Housekeepers, which was formed over 15 years ago, came forward and applied for participation in the Wage Council in representation of employers, so that we have already summoned this Council for next May.

 

Pending issues:
the National System of Collective Bargaining

 

-What then are the next steps planned?

-Now it’s time to consolidate what we have done so far. In that sense, we have several bills presented in Parliament, such as, for example, the National System of Collective Bargaining, which consists of two chapters: one that applies to the private sector, and the other to the public sector. The law for limiting the length of the workday for rural workers also seeks to consolidate what has been accomplished so far. And I was forgetting another very important law, which has already been passed: the law on outsourcing.

 

-What does this law do?

-It does not prohibit outsourcing or subcontracting. Rather it establishes that whoever employs workers hired by a subcontractor is jointly and severally or secondarily liable not only with respect to wage issues, as was already established since 1943, but also with respect to Social Security and Insurance Bank contributions and compliance with regulations on health and safety at work. If the original company makes sure that the subcontractor complies with all the regulations, its responsibility is secondary and any legal actions will be brought against the subcontractor. Otherwise, it will be jointly and severally liable and the worker may choose to bring legal action against either company. The definition of this bill involved a great deal of time, and the employer sector withdrew from the discussion of regulations because they disagreed with the synthesis we made. At the same time, it also withdrew from the discussion on Collective Bargaining, so that this bill was presented to Parliament without prior discussion, and this gives rise to criticism from business and workers. Our proposal was meant as a draft to be submitted for discussion by all three parties, with the aim of presenting a more polished version to parliament, even if we didn’t reach a consensus among all the parties.

 

-It must be difficult to reach full consensus…

-It is. Because both employers and workers approach bargaining with the attitude that “there is no agreement at all until an understanding is reached on each and every issue,” and this means that a stumble in any one issue can topple all the previous achievements in other issues. For us this is still useful, though, because if a consensus was reached in 18 issues but not in two, for us it still means we’ve made a lot of progress, even if the parties leave negotiations saying that no agreement was reached. We are left with insight on where we should direct our efforts. In this case, the discussion was only with the workers. We hope that in the parliamentary discussion the parties will contribute their respective inputs, so that the legislators can arrive at a more polished synthesis based on our draft.

 

-The employers’ sector reacted very strongly to this issue.

-They made very harsh statements. The Labor Legislation Commission in Parliament unanimously decided to request the assistance of the International Labor Organization (ILO). This body’s Santiago de Chile Office is sending within the next few days a three-party mission that will participate in a debate involving employers, workers, legislators and this Ministry, with the aim of contributing input to provide legislators with a broad base for subsequent discussion and reflection. This is happening because employers have said that they will oppose this regulation in the version we drafted, because they disagree with our view of worksite occupations. In any case, now the ILO will be involved right from the start of the debate, and thus its recommendations will be received prior to the legislative stage.

 

Occupation of worksites

 

-This issue of occupations, and the use of such measure in Uruguay by trade unions, has been very controversial. What is the Ministry’s view on this issue?

-In Uruguay occupations have never been criminally penalized, and they’ve existed since the 1950s. From that time on, every government -including those of the first stage of the dictatorship that began in 1973- had to negotiate with the occupying workers. No one ever prohibited them. What’s more, the vast majority of academic writings on labor law sees occupations as a form of exercising the right to strike. Labor law experts who think otherwise are a very small minority, so much so that when some opponents of our proposal tried to present divergent opinions, instead of drawing on academic experts they had to engage law firms. Even the ILO considers that occupations are a part of striking, and they advise against repressing workers that engage in them, unless the occupations are not peaceful, that is, if they are used as a way to exercise violence against people or things. This recommendation is established within the Committee on Freedom of Association, and as it is not a formal resolution of the ILO, the employers’ sector maintains that it is not part of the body’s Conventions and, therefore, refuses to acknowledge them as legal. But in fact, the country’s practice has traditionally been one of tolerance. Since the end of the dictatorship in 1985, there have been at least several dozen occupations, and only three of them were repressed. For 20 years, the parties that are now in the opposition had the necessary legislative majorities to prohibit occupations, but they never did so. There must be a reason for that. Now, however, when they are a minority in Parliament they want us to do what they chose not to. They are demanding that we regulate strikes, something they also chose not to do. The argument they use to criminalize occupations is that they violate the right to work and the right to property. There are actually several court judgments that establish that when workers occupy a worksite without using the facilities for purposes other than achieving their demands, and they then return them intact to the owner, private property is not affected.

 

-There have also been many agreements with employers.

-There have been many. Management withdrew from the discussion of the regulations, but not from the Wage Councils, from a space created by this government, which is known as the National Commitment for Employment, Income and Responsibilities, where workers, management and government seek agreements aimed at improving national production and creating jobs. The withdrawal of management was based on their discrepancy with two or three of the issues discussed. We could even say that the vast majority of the companies complied with the agreements reached in the Wage Councils. The thing is that in 2006 there was a total of 23 occupations, and in 2007 there were 24, but the media coverage of the occupation of factories and plants often gets blown out of proportion, and the declarations tend to be harsh and passionate, so what happens is that with all that noise, the thousands of agreements that are honored go unnoticed. Also, we understand that most of these conflicts were generated because management failed to honor the agreements signed. There are some conflicts caused by intransigence in the demands, but they are a very small fraction.

 

Towards self-regulation

 

-Summing up, there is a greater rate of unionization, a general compliance with the agreements reached, collective bargaining in the Wage Councils, a significant contribution to national labor legislation, a strengthening of the Labor Inspection Bureau, and along with this, a huge increase in investment in the country, which means that this scenario is not driving capital away. In international labor forums, the “Uruguayan model” is already being highlighted as a successful experience. What do you think of this?

-There are foreign investors that see Uruguay as offering sufficient guarantees in labor aspects, and some Uruguayan business operators that believe that such guarantees don’t exist. That’s a fact, and it seems more like it’s a matter of an inward-looking debate, where complex and intricate interests are expressed. Moreover, all labor relations are based on a combination of bargaining, strikes and respect for union rights. We have instrumented these principles through three focal points: centralized collective bargaining, an inclusive policy, and the promotion of self-regulation. Bargaining is conducted in a tripartite structure, so that the State participates, in addition to centralizing the work programs. This is complemented with a union rights promotion policy, because traditionally our society, or a large part of it, has accepted the need to level inequalities between workers and employers in order to achieve effective bargaining. It is often claimed that negotiation must be conducted in a two-party structure, and the North European countries are presented as examples of this form of negotiation. But in those countries, union dues go in part to the Social Democratic Party, which is generally in power. Therefore, the support and defense that unionized workers have there is much greater than what we have generated here. The defense of union freedom is not just a goal in itself, it is a way of strengthening negotiations.

An inclusive policy. In three years and two rounds of Wage Councils we have reached more than 400 Collective Bargaining Agreements, of which approximately 380 were reached by consensus. This model tends to include every activity and every stakeholder.

With the promotion of self-regulation we want to point out that conflict resolution can be achieved in two ways: through hetero-resolution, that is when a judge is called to act as arbitrator in finding a solution; and through self-resolution, which is when the parties solve their own conflicts. With all these instruments what we want is to move increasingly towards self-regulation, with the State participating less and less. But to reach this self-regulation we need to attain a balance first, and that’s what we’re working on.

In English legal writings, this is known as “conflictive pluralism,” and it is based on the assumption that in a real and genuine democracy, conflict is inevitable, because a natural part of the workings of the system is the existence of groups with diverse and conflicting interests. In that sense, we shouldn’t deny the existence of conflicts, instead we must seek to balance the forces in conflict and solve their differences.

 

-Is that what this Ministry is trying to do in Uruguay?

-Yes. But we have to bear in mind that we come from 14 years in which the opposite was done: years of promoting labor deregulation and flexibilization. I don’t mean to say with this that there shouldn’t be flexibility in the field of company organization. That’s another thing altogether. What I’m referring to is the dismantling of labor legislation, which is what happened here. Under such conditions, calling on the parties to negotiate among themselves would be promoting the survival of the fittest, with the stronger party prevailing over the weaker one, which is vulnerable in terms of organizing capacity. Today, we do the opposite and from the reaction we get you’d think the world was about to end. But that’s not true. The level of unemployment stood at more than 12 percent, and in December 2007 it went down to 7.7 percent, the lowest it has been in the history of Uruguay; this is because employment went up. According to an international consultancy company, in that year Uruguay’s industry grew an overall 10 percent; the sector that works for exports grew a little below that figure, and the industry that produces for the domestic market and competes with imports grew above the average, but the industry geared towards the domestic market that doesn’t compete with imports grew 15 percent. The explanation given by the consultancy company for this scenario is that employment grew, salaries and retirement pensions went up, and there is more domestic consumption. Salaries, the income of families, became the engine of internal development. The manager and owner of large commercial spaces, accountant Carlos Lecueder, recently said that the country is very close to experiencing a consumption boom, and his explanation for this is that employment has gone up, family income has increased, and families are no longer afraid of not being able to pay installments and so they’re consuming more.

For my part, I’d like to add that internal tourism has gone up 10 percent and the number of Uruguayans that have traveled abroad on vacation is coming close to the level it had seven years ago, prior to the 2002 crisis. These figures are the result of a general policy implemented by the government, which has the labor policy as one of its components.

 

-Some believe that this government has a right-wing economic policy and a left-wing labor policy.

-What it has is a government policy. There are some who claim to agree with the economic policy but not with the labor policy, and then there are others who say the opposite, but they’re both wrong in their perception. This government has a single policy that articulates different complementary aspects.

 

-The ILO is conducting a pilot experience in Uruguay. Could you tell us what it’s about?

-The ILO is implementing a decent work pilot project in eight countries, of which Uruguay is the only medium-income country. Our country was selected because, according to the ILO’s criteria, it is one of the countries that has advanced the most in this concept. We have also had significant support from the ILO for other programs and objectives.

 

En Montevideo, Carlos Amorín

Rel-UITA

13 de mayo de 2008

 

 

 

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