New Emergency Program Forces Employers To Supply Their Workforce, On Demand, To Benefit State-Owned Entities

Author:Mr Daniel Jaime
Profession:Littler Mendelson

Venezuela's Ministry of Labor has enacted the establishment of a forced labor program, which will require public and private sector employers to supply their workers as "temporary loans" to State-owned companies to boost the country's economic development in essential industries, such as agriculture.

In accordance with the program and under the presidential decree, known as the "State of Economic Emergency Decree No. 2,323"1, employers must loan workers who either are physically fit or have the necessary professional skills to perform the activities that are on demand by the requesting State-owned company. The program is effective as of July 22, 2016, and can be applied for a 60-day period, which may be renewed indefinitely. This mandatory program will have significant implications for both the workforce and private sector employers.

Job Suspension and Security

During the time in which the "borrowed workers" render services to the State-owned company, their employment status will be suspended (just as though they were placed on unpaid leave) and they will enjoy job security protecting them from dismissal. Under the labor law, job security (known as "inamovilidad") means that the employer cannot terminate the employment relationship without a fair cause and unless the dismissal is authorized by the Labor Inspector's Office after a hearing.

Wages, Meal Benefits and Seniority

During the period of temporary loan, the borrowed workers are not required to render services to their employers nor are employers required to pay their employees a salary or cover the meal benefit (known as "Cestaticket Socialista"). Rather, the borrowed workers' wages and meal benefits must be paid by the requesting State-owned company.

However, the employer that lends the workers must continue to make contributions into their social security funds, even while the borrowed workers render services to the requesting entity. Further, during the temporary loan, the borrowed workers will retain their seniority for purposes of calculating their entitlement to a garden variety of social benefits.

Reinstatement and Job Placement

Once the period of the temporary loan is completed, the borrowed workers will return to work for their employer under the same terms and conditions that were present previously. In the event the borrowed workers became disabled during the temporary loan --- whether the disability is due to an occupational or non-occupational illness or accident --- the...

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