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BOLIVIA: An Introduction to Labour & Employment

Worker’s ultraprotectivity 

The employer's sector in Bolivia is currently experiencing a complex situation that is difficult to deal with, accentuated by the global economic recession that has caused the COVID-19 pandemic. The growing and worrying policy of worker ultra-protection is seriously affecting the balance of the labour relationship, entrepreneurship, investments, growth and development of the business sector; that is, the main sources of job creation.

The concept of labour protection is understood as the indefinite and unbreakable obligation by the employer to maintain all jobs, even in the event of damage in fortuitous cases or force majeure.

When we use the term "ultraprotectivity" we refer to the disproportionate protection of the right to job stability, which results in the impossibility of dismissal of a worker by the employer (except for certain anachronistic causes provided for in the legislation that, in addition, must be demonstrated through the application of a due process complying with a high standard of constitutional guarantees).

The labour and constitutional norms, as a whole, are slanted towards the worker’s protection. This approach responds to a historical asymmetry in the employment relationship. This is, currently, questionable due to the disproportion that its application has entailed, since, beyond simply applying the aforementioned dogma, this right may not be sustainable in the future given the excessive burden that having dependents implies for the employer. Certainly, business ventures are affected by the presence of this ultra-protection which causes an economic slowdown exacerbated by the circumstances described above.

The problem arises from not having considered in the adoption of this policy the workplace’s essential elements such as: the economic reality of the country; the position of the business community; the nature, conditions and scope of labour relations; the enormous difference in labour relations between the variety of sectors; and the incentive to entrepreneurship (among the most noteworthy). Job stability has been imposed as a dogma without considering that not all employers are equal or face the same conditions. Economic reality clearly shows commercial and non-commercial activities have heterogeneity that generate clearly differentiated labour relations, making impossible the inflexible application of job stability.

The precariousness of the norm that benefits the worker, which has not been developed in its limits and scope, aggravates the situation even more since there is no complete, comprehensive or specific standard; only general principles of protection to be applied by the justice system in the worker’s favour regarding job stability.

This situation has resulted in the impossibility of dismissing workers who have incurred breach of an employment contract or violation of company regulations, causing damage to their employer in different dimensions (image, productivity and/or economic). All because of the benefit that workers derive from ultra-protection with the different adverse effects for the company, among which we can highlight: keeping an incompetent worker in his job, keeping a worker despite having lost confidence in him, keeping a job position that is unnecessary for the company, paying salaries and other benefits for time not worked, that is, fulfilling obligations on the part of the company in favour of a person who does not add or contribute to productivity (even less to the growth of the activity). This obligation causes damaging effects at a structural, economic, and even social level, since the effect extends to the workplace environment.

To the aforementioned precariousness of the rule, anachronism of the existing legislation that regulates the causes of worker separation must be added. Legal regulations have not been updated or supplemented, a situation that prevents the application of legal separation measures for legitimate reasons, even with the very high standards required by law, the Political Constitution of the State and jurisprudence.

Closing the successive chain of difficulties for the employer in Bolivia, the justice system that applies labour standards has expanded to protect the worker, who can currently go to different jurisdictions: administrative, judicial and constitutional to denounce the violation of their rights through highly inquisitive processes. This becomes a limitation for the employer who can only act as a plaintiff in situations specifically authorized by the law. For greater complexity, the justice operators of these jurisdictions have been developing subjective interpretations and applications of the precarious and anachronistic labour norm in application of the protectionist dogma to the worker, further reducing the chances of a favourable ruling being issued for the employer on a case of termination of the employment relationship.

All this reality has forged a worrying legal uncertainty in the legal labour area, causing considerable economic damages that involve the payment of years of earned wages and the reinstatement of the worker, even when such determination is not legally due. It is a difficult situation for the private business sector to face, which, due to the application and interpretation of the inquisitive rule, experiences various limitations in its administration and business management faculties, as well as a lack of motivation to promote greater economic ventures, investments being affected, even resulting in the cessation, closure or liquidation of business activities that were already taking place.