The Labor Minister has announced publicly that the Government will propose a new all-inclusive labor code.  In this context, companies, institutions, organizations, associations and citizens at large have been invited to attend a first phase for purposes of identifying specific issues and proposals of a legal reform involving labor matters. Therefore, it is an opportunity to set forth some of the limitations included in the current Labor Code – which dates back to 1938 – that reduce or limit full development of the nascent mining industry, as well as to propose specific changes that will allow greater generation of employment in that sector.

One of the major limitations faced by mining companies is the existence of the ordinary working day established in the Labor Code which is not in line with the development of industries engaged in exploitation of natural resources.  It is true that some years ago the Labor Ministry issued a set of instructions allowing Regional Labor Directorates to authorize special working days, but such authorization is subject to the incumbent authorities’ discretion and opinion.

Other limitations that should be pointed out are restrictions on daily work performed underground, hiring foreign personnel, recent limitations to leave the country imposed on foreigners with a temporary resident’s visa, elimination of term contracts, and salary increase in the case of occasional contracts.

Experience in neighboring countries: Normal work in Chile involves 45 hours per week and not more than 10 hours per day, also applicable to work performed underground, so there are no special legal limitations for such work. Usually, the Chilean mining sector applies exceptional working days with shifts including Sundays and holidays and special rest periods allowing continuity in mining operations in order to maximize the workers’ presence during those tasks.  In Peru likewise it is normal during mining activities to implement the so-called cumulative working period, with the only limitation that it should not exceed an average eight hours/day or forty-eight hours/week during a three-week period.

Some proposals for the amendment:  As in the case of Chile and Peru, there are no bases for underground work not to exceed six hours, so that such restriction ought to be eliminated.  The restriction imposed on underground work was established by Ecuadorian legislation in 1945 when underground working conditions were probably not apt for the workers’ safety and health.  At present, the mining industry provides the highest occupational safety and health standards since it has adequate machinery, proper ventilation and lighting sources. Therefore, in the mining industry whose main activity is performed in remote locations where access is difficult and far away from urban areas, it is imperative to legally recognize the existence of special extended working periods established according to technical and objective criteria, without any surcharge payments for work that does not exceed 160 hours per month.

* This paper was originally published in Minergia, Mineria y Energia magazine, No. 12, September-October 2017, page 10.

Warning: This newsletter by Pérez Bustamante & Ponce is not and cannot be used as legal advice or opinion since it is merely of an informative nature.