As unemployment rises, Correa plans to send labor law changes to the National Assembly

Saying that a relaxation of some labor laws is necessary to keep Ecuadorians employed, President Rafael Correa says he will send a package of changes to the National Assembly within two weeks.

President Rafael Correa

Among the changes is one that would allow employers to the reduce work hours and the pay of full-time employees. Under the change, daily work hours could be reduced from eight hours to six and work days from five to four.

“This would be the lesser evil than for the employee to lose a job completely,” Correa said. “Yes, they will make less money but if the company cannot afford full pay, this is an alternative that benefits both sides,” he said.

A second reform, announced last week, is to allow fixed-term employment contracts, not allowed under current law. According to Correa, this will help employers in the construction, fishing and agricultural sectors. Tens-of-thousands of jobs have already been lost in these areas, Correa said, and relaxing the contract rules will allow more people to work.

Another reform the president said he will propose, is the elimination of the requirement that apprentice and young employees be paid the minimum salary. “Many employers could not afford this and employment of young people has gone down,” Correa said.

“We made a mistake with this law,” Correa admitted. “We were acting on humanistic principles but that is not practical under the economic circumstances we face today.”

Correa said that unemployment remains under 5% in Ecuador, the lowest rate in Latin America, but he concedes that it is rising.