In this second installment, the first of which was published a few days ago , we continue our conversation with María Orio González, partner at the internationally structured firm Abdón Pedrajas Littler (Spain); Jorge de Presno, partner at Basham, Ringe y Correa, SC (Mexico); Francisca Corti Viviani, partner at Carey (Chile); Santiago Martínez Méndez, partner at Godoy Córdoba (Colombia); Enrique M. Stile, partner at Marval, O’Farrell & Mairal (Argentina); Julio Villalobos, senior associate at Miranda & Amado Abogados (Peru); and Iñigo Sagardoy, president of Sagardoy Abogados (Spain). They explain how existing labor laws prohibit and penalize all discriminatory acts. However, they affirm that despite these regulations, such practices persist in their jurisdictions. Finally, the specialists shared their ideas on which laws they would enact or reform and why.
Where does labor law in your country stand in terms of achieving equality, diversity, and reducing the gender pay gap?
Francisca Corti Viviani, partner at Carey (Chile): “Generally speaking, Chilean labor legislation prohibits acts of discrimination in Article 2 of the Labor Code, understanding such acts as distinctions, exclusions or preferences based on certain reasons that are listed, and which certainly include sex and gender identity.
Furthermore, over 10 years ago, Article 62 bis was incorporated into the Labor Code, establishing the employer’s obligation to comply with the principle of equal pay for men and women performing the same job. Notwithstanding this, the same article stipulates that differences based on factors such as abilities, qualifications, suitability, responsibility, and productivity will not be considered arbitrary. Under this provision, a female employee affected by wage inequality must file a complaint directly with her employer, following the procedure established by the company in its Internal Regulations on Order, Hygiene, and Safety. If the complaint is not resolved, the employee may pursue the general procedures for reporting violations of fundamental rights before the Labor Inspectorate or the Labor Courts, as there are no specific procedures within these bodies for such non-compliance.
Consequently, although there is regulation on equal pay, it is not clear that it has a relevant effect, precisely because of the absence of more effective tools to claim against discrimination of this nature.
For the same reason, there are currently at least two bills that seek to reduce the existing wage gap in our country between men and women through various mechanisms, including more severe sanctions for employers and the establishment of more objective and limited parameters for wage differentiation.”
María Orio González, partner at Abdón Pedrajas Littler (Spain): “Currently, as has been pointed out, two Royal Decrees (RD 901/2020 and RD 902/2020) have been enacted aimed at regulating equality plans and equal pay between women and men, with the obligation established through Royal Decree Law 6/2019, that all companies with 50 or more employees develop and implement an equality plan.
This has significantly increased the number of companies required to have an equality plan, since previously only companies with more than 250 employees were subject to this obligation. Furthermore, the specific topics that must be addressed in these plans have been established and defined.
Similarly, it has been established that all companies must maintain a pay register for their entire workforce, including management and senior staff. This is intended to guarantee transparency in the structure of compensation, ensuring accurate and up-to-date data, as well as adequate access to pay information, regardless of company size, through the compilation of averaged and itemized data.
Jorge de Presno, partner at Basham, Ringe y Correa, SC (Mexico): “Unfortunately, the gap is a reality. Since 2012, the Federal Labor Law has emphasized the need to eliminate these inequities and gaps in pay for men and women; that is, to achieve not only gender equality but also workplace equality. It is a serious, punishable offense for an employer to pay different wages to men and women for equal or similar work. Any type of workplace discrimination, whether based on sexual orientation, gender, nationality, religion, or political beliefs, is absolutely prohibited, and special attention has been given to enforcing it. There is even a public body called the National Council to Prevent Discrimination (Conapred), which applies these regulations very effectively, to the point of imposing substantial fines on those who violate these rules or engage in such conduct.”
However, we cannot ignore the fact that these types of practices still exist.”
Santiago Martínez Méndez, partner at Godoy Córdoba (Colombia): “The gap is still very large, and the pandemic exacerbated it, considering that the greatest number of jobs lost were in SMEs and the hotel and tourism sectors, where women were predominantly employed. Projects that would lead to greater gender equality, such as shared maternity leave for both parents or a clear labor policy on the matter, are not progressing.”
Regarding salaries, we have regulations that aim to prevent salary differences based on gender and provide special protection for women in this regard.
Regarding diversity, we do not have specific laws, but we do have constitutional precepts that promote equality and non-discrimination, making their effectiveness effective in multiple cases through the action of protection.”
Enrique M. Stile, partner at Marval, O’Farrell & Mairal (Argentina): “Argentina is a party to applicable international treaties on gender equality, such as the Convention on the Elimination of All Forms of Discrimination against Women and, recently, ILO Convention 190 on Violence and Harassment in the Workplace, among others.
The National Constitution in article 14 bis establishes that equal remuneration for equal work will be ensured.
For its part, Article 17 of the Employment Contract Law prohibits any type of discrimination among workers based on sex, race, nationality, religion, political affiliation, union membership, or age. Article 81 establishes the right to equal treatment in equal situations. It stipulates that unequal treatment will be considered to exist when arbitrary discrimination occurs based on sex, religion, or race, with the exception of when the different treatment is based on principles of the common good, such as greater efficiency, diligence, or dedication to their tasks on the part of the worker.
Likewise, Law No. 23,592 against discriminatory acts stipulates that anyone who arbitrarily restricts the rights and guarantees recognized in the National Constitution shall be obliged, at the request of the injured party, to nullify the discriminatory act or cease its execution and to compensate for the moral and material damages. It specifically addresses discriminatory acts or omissions based on grounds such as race, religion, nationality, ideology, political or union affiliation, sex, economic status, social condition, or physical characteristics.
Notwithstanding Argentine legislation on the matter, it is necessary to emphasize that, in practice and according to data from the National Institute of Statistics and Censuses (INDEC) and the Ministry of Labor, a significant wage gap and inequality in access to managerial positions still exist in Argentina. There are few controls by the labor authorities and almost no incentives to comply with regulations.
Iñigo Sagardoy, President of Sagardoy Abogados (Spain): “Last year, as we have indicated, the Spanish executive carried out important reforms in the area of equality through two royal decrees, RD 901/2020 on equality plans and RD 902/2020 on equal pay, both published on October 14, 2020.
The first of these, Royal Decree 901/2020 on equality plans, in force since January 14, 2021, aims to ensure that all companies, regardless of size, adopt, after prior negotiation, measures to prevent any type of discrimination between men and women and to promote conditions that prevent situations of sexual harassment or harassment based on sex in the workplace. To this end, companies must establish specific procedures to address any complaints they may receive as a result of such behavior.
Furthermore, Royal Decree 902/2020, of October 13, on equal pay for men and women, aims to guarantee gender equality and the absence of direct and indirect discrimination in remuneration. To this end, the Royal Decree emphasizes four fundamental principles that every company must adhere to in order to guarantee this equality. These four pillars are:
1. The principle of pay transparency; 2. The pay register; 3. The principle of equal pay for work of equal value; 4. The salary audit.
This Royal Decree came into force recently, on April 14, 2021, since the regulation stipulated that it would be applicable six months after its publication.”
Julio Villalobos, Senior Associate at Miranda & Amado (Peru): “There is a law (Law 30709) that aims to prohibit wage discrimination between men and women, based on the principle of equal pay for equal work. This legislation was enacted in 2018 and has resulted in all companies having a chart of job categories and functions, and an objective salary policy.
In 2019, the national pay gap between men and women was 29%. The average salary for men was 1,566 soles, while for women it was 1,107 soles. There is still a long way to go.”
If you had the power to enact a law on labor rights, what would it be and why?
Julio Villalobos, Senior Associate at Miranda & Amado (Peru): “In Peru, there is a large number of scattered labor regulations, which makes them difficult to understand and access. In this regard, the State’s major shortcoming is the completion of the General Labor Law, which aimed to integrate all individual and collective labor regulations. It is important to resume its discussion and eventual approval.”
Santiago Martínez Méndez, partner at Godoy Córdoba (Colombia): “What a difficult question… Just one? I would choose between two options: either repealing so many unnecessary laws, or undertaking a comprehensive reform of the second part of the Substantive Labor Code, which regulates the relationship between employers and labor unions. Constitutional Court rulings have created numerous loopholes that have led to various fractures in union relations. I believe that a healthy company-union relationship is essential for building prosperous businesses and decent work.”
María Orio González, partner at Abdón Pedrajas Littler (Spain): “The Workers’ Statute, as the main reference standard in labor matters, together with the rest of the implementing regulations, constitutes a sufficient and complete set of rules. The aim would not be to enact new regulations, but rather to improve existing ones and analyze and assess the modification of those that may be necessary.”
Francisca Corti Viviani, partner at Carey (Chile): “Possibly one of the biggest drawbacks of Chilean labor law is the compensation system in the event of termination of an employment contract. In Chile, legal compensation is reserved for restricted grounds for dismissal, so the worker is not entitled to any legal compensation, for example, in the case of resignation, beyond compensation for unused vacation time.
This situation sometimes leads to employees engaging in behaviors designed to provoke dismissal rather than resign, disrupting the normal course of labor relations. Furthermore, the requirement to justify dismissal and the application of surcharges on legally mandated severance pay in cases of unjustified dismissal have resulted in a higher than desirable level of litigation surrounding terminations. This litigation has been partly fueled by the extremely strict criteria applied by the courts to determine the validity of grounds for dismissal, such as “business needs,” which often represents the employer’s only option for terminating the contract.
In this context, one possible alternative that could be considered is to establish a system of compensation for all events, through contributions to a fund that accumulates throughout the employment relationship and that allows financing the payment of compensation upon termination of the employment contract.”
Jorge de Presno, partner at Basham, Ringe y Correa, SC (Mexico): “There is no perfect law; all laws can be improved. I believe that Mexico’s Federal Labor Law is a good law, and with the recent additions, much of which comes from international treaties and conventions ratified by Mexico, it has been improved. What I would try to incorporate are two things:
- First, procedural parity; that is, that the parties in labor disputes be equal before the law. And in some way, that historical protection from Article 123 of the Constitution of February 5, 1817, which has been in effect, should be gradually phased in because the worker is already sufficiently protected by the regulations.
- The other point is that the assets of a business or company should be better protected, as well as the employer’s investment. If a worker is owed wages, then they should be paid, but this shouldn’t be a matter of attacking the assets of a source of employment, and in Mexico, certain related aspects need to be included. Although it doesn’t happen in Mexico, I think we should include it.”
Iñigo Sagardoy, President of Sagardoy Abogados (Spain): “If it were up to me to enact a law on labor law, I would choose one that addresses the simplification of employment contracts, given the multitude of employment contracts that exist in Spain, and that promotes job stability in our country. Likewise, legislation that clearly incentivizes continuous training for workers, given the impact that digitalization and new technologies are having on the world of work.”
Enrique M. Stile, partner at Marval, O’Farrell & Mairal (Argentina): “Instead of enacting a new regulation, I understand that it would be necessary to review and update the existing one.
The dynamics of employment relationships have been changing significantly, incorporating new forms of work and service delivery. For example, delivery services and platform-based services, as well as transportation services, represent a very important part of current economic activity, especially in Argentina. We cannot miss the opportunity to foster the growth of these services, and to do so, we need to rethink current regulations.
Unfortunately, we have a regulatory framework conceived on the basis of an archaic labor provision system, which in some ways prevents us from motivating and promoting investments, generating greater development, and reducing the worrying unemployment rate.”
