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Summary of Recommendations to Remedy Violations Identified in the Honduras CAFTA Labor Complaint

On January 9, 2013, leading Honduran unions who filed a March 2012 complaint with the US government under DR-CAFTA presented the Honduran government with a series of recommendations for resolving the complaint. I. The Ministry of Labor’s Inspection Department The document cites deficiencies in the Honduran Ministry of Labor, including poor quality of services, corruption, and employer intervention in the Ministry’s work. Recommendations: 1. Establish harsher fines for employers. 2. Obligate employers to pay the fines, taking the case to the courts if necessary. 3. Provide improved logistical support for the Ministry’s regional offices. 4. Establish strict disciplinary measures for government officials who are discourteous or disrespectful to the workers who seek their assistance. 5. Create a commission to review complaints about labor officers who fail to comply with the law. II. Dismissals, Collective Pacts, Incorporation of Unions In this section, the authors address three common employer practices: dismissal of workers for having organized a union, formation of “collective pacts” in which the employer creates a parallel structure using non unionized workers to combat unionization, and other efforts to repress workers’ freedom of association. Recommendations: 1. Investigate all cases in which there have been dismissals as the result of unionization and work with the employer to remedy the situation. 2. Recognize unions and collective bargaining agreements as the sole representatives of workers. 3. Make violations of freedom of association punishable with prison time. 4. Comply with the Labor Code, which states that the Ministry must respond to a petition to form a new union within a period of 15 days. 5. Find any public official that does not make this determination within a period of 15 days to be in violation of the Civil Service Law. 6. Notify the employer immediately about the registration of a new union. 7. Guarantee compliance with Article 47 of the Labor Code, which states that temporary employment contracts are not legal if, in fact, the work is ongoing. 8. Simplify the steps to resolve a labor conflict so that this process goes more quickly and so that workers can more easily obtain the right to strike. III. Subcontracting (Outsourcing)

The third section of the report addresses Honduran employers’ use of outsourcing companies to hire their workers, which makes unionization difficult and keeps the workers from receiving severance. Recommendations: 1. Modify Honduran law so that it regulates outsourcing. 2. Provide leaders of union locals with legal protection from dismissals; make the benefits of a collective bargaining agreement applicable to all workers at a company, including those hired through an outsourcing agency. 3. Ensure that the company works with its outsourcing partner to provide workers with letters of reference and other necessary documents. 4. Maintain a list of all employers who use outsourcing agencies and the benefits that they provide and report regularly on this information. IV. Minimum Wage The authors report that the minimum wage does not cover workers’ basic needs and, furthermore, that many workers are being paid less than minimum wage. Recommendations: 1. Ensure strict compliance with the Labor Code as it pertains to minimum wage. 2. Ensure strict compliance with the Constitution as it pertains to minimum wage. 3. Increase the fine for employers who fail to pay the minimum wage. V. Health Care The report cites employers’ failure to pay for workers to receive health care and the government’s failure to enforce the law and thereby ensure that workers are able to receive medical attention. Recommendations: 1. Initiate legal proceedings against employers who owe money to the government for health care contributions. 2. Obligate employers to submit quarterly statements demonstrating that they have made the payments for workers’ healthcare. 3. Require physicians to respect Honduran medical laws. 4. Offer medical services to pregnant women even if their employers are not upto-date on their healthcare payments. VI. Reincorporation of a Company and the New Owner’s Legal Responsibilities The report documents employers’ practice of terminating their business and reopening under another name in order to avoid making payments to workers or to reset the clock on their employment contracts as well as to continue receiving tax benefits.

Recommendations: 1. Ensure compliance with the Labor Code, which states that employment contracts will be unaffected by a change of ownership. 2. Approve the Protection of Seniority for Employment in the Maquila Act, presented to Congress in 2003 by labor rights organizations. 3. Regulate the distribution of company goods to the workers at the time of a company’s closure, as established in the Labor Code. VII. Other Demands The report also includes a series of additional demands: 1. Reinitiate the effort to approve the San Salvador Protocol, an instrument that is frequently used by the Inter American Human Rights Commission to defend union rights. 2. Create a Department of Labor Rights Prosecution within the Public Ministry in order to ensure that workers and unions can access their right to labor justice. 3. Revoke Decree Number 230-2010, the “National Program for Hourly Employment”, which violates workers’ right to employment stability and has created a mechanism by which the employers can exploit workers. 4. Enact the bill presented by the Honduran union movement in 2009 that regulates enforcement of Article 7 of the Labor Code, which refers to subcontracting/outsourcing.

--prepared by USLEAP March 2013