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COVID-19 in South America: Contrasting policies

South America has been harshly hit by the COVID-19 pandemic. Argentina and Brazil, the two biggest economies of the subcontinent, have adopted contrasting health and labour policies. The Brazilian government has refused to adopt policies to slow its spread, such as social distancing measures. Instead, state governors and mayors imposed quarantine. As a result of this conflict, there is a lack of coordination on public policies and people are confused. By contrast, the Argentine government has adopted one of the longest and strictest lockdowns across the globe. Its public health policy can be summarised in the statement of the Argentine president who stated that “you cannot recover from death”. This diverse approach has been partially reflected in the labour legislation enacted.

The Argentine government has enacted diverse measures in order to protect workers’ rights. It has exempted the large majority of workers from performing their duties without negative impact upon their wages. To do so, the government has decided to progressively subsidise wages in the private sector. For essential activities that have carried on, the government has favoured teleworking, and has strengthened the employer’s duty of health and safety at work. Furthermore, it has implemented a prohibition of suspension of contracts, as well as dismissals and redundancies until the end of July. Any suspension, dismissal or redundancy decided by companies will be null and void.

The Brazilian government has enacted measures to make labour regulations more flexible. It has allowed the anticipation of individual annual paid leave and holidays, established a special working hours compensation scheme and suspended occupational safety and health administrative requirements. To do so, it prioritises individual agreements – employee/employer – over the law and collective bargaining. Moreover, the government has created the ‘Emergence Employment and Income Maintenance Programme’, which grants a benefit to employees who have suffered a reduction of their salary and working hours, or a suspension of their contracts. The reduction and the suspension may be negotiated through individual agreements.

The Diverse Role of Social Partners

The International Labour Organization (ILO) states that social dialogue and tripartism are central to the creation of an environment of trust to effectively implement measures to address the COVID-19 outbreak. This emphasises the importance of consulting and encouraging the active participation of employers’ and workers’ organizations in planning, implementing and monitoring recovery and crisis response measures.

The promotion of social consultation is essential in tackling the COVID-19 economic and social consequences. A consensual political pact, with the participation and convergence of social partners (workers, companies, and the State), is necessary to achieve a modicum of stability. This would consolidate democracy in the region, which seems to be under constant challenges. Once again, both countries have adopted a diverse approach.

Many of the measures enacted by the Brazilian government were required and suggested by employers’ organizations, such as the Industry National Confederation. Also, the Ministry of Economy asked companies for information about the impact of COVID-19 on their economic sectors. The Minister also had several meetings with 10 employers’ representatives before enacting both MPs. In contrast, little attention has been paid to workers’ representatives. The main trade union federations presented 33 proposals to protect employment and workers’ health and income. None of them were considered.

Looking at the recent past, ignoring workers’ demands is not an unprecedented attitude. The Brazilian ‘Labour Reform’ took little account of the proposals presented by trade unions. Since Jair Bolsonaro took office, his administration has marginalised workers from political decisions to implement a “fewer rights, more jobs” approach. In the second half of 2019, the Ministry of Economy created the High Labour Studies Group, intending to analyse the Brazilian labour market and propose new legislative changes. None of its members had any link whatsoever with trade unions.

It is important to create measures to mitigate the negative effects on the labour market in times of economic and social crisis. However, adopting proposals only from employers and dismissing entirely those presented by trade unions certainly constitutes the wrong approach. It is crucial to consider the needs of the most vulnerable part of the labour relation.

Brazil is in a crisis with unprecedented dimensions. Any serious project to tackle it must consider the workers’ voices and interests. Trade unions are fundamental entities for the political and social organization of hundreds of thousands of people. Similarly, other labour entities, such as associations and cooperatives, have the power to collaborate in exposing the particularities of specific groups, such as waste pickers. Workers, both in the formal and informal sectors, have much to contribute.

The challenges ahead call for a change in the recent trajectory of worker exclusion in the elaboration of policies to regulate the labour market. Giving workers a voice in this debate will allow us to review the false dogma of “fewer rights, more jobs” that guides all the Brazilian government public policy on labour matters. It is urgent to put workers’ representatives on the discussions to present their interests to face the Covid-19 outbreak. Taking workers seriously will strengthen democracy in Brazil and will help to create policies that consider not only companies’ needs, but also workers’ needs.

In contrast, embracing the ILO approach, the Argentine government has decided to convene social partners – with the support of the ILO – to create a Social and Economic Council, which assesses and monitors the labour market and the legislation enacted during this period. This has been received positively by the population and social partners.

However, it has also adopted a controversial decision whereby it has suspended every union electoral procedure as well as every union meeting or congress for 30 days – which has been renewed. This is a crucial decision because enterprises are exceptionally authorised to ‘suspend’ contracts of employment with a possible reduction of wages during the pandemic crisis in exchange for retaining their job. This suspension requires the individual consent of employees or the agreement of trade unions. Even though the Ministry of Labour must approve the agreement, the suspension of meetings reduces the powers of unions, which are supposed to play a vital role in making sure that dismissals are not taking place, and in negotiating agreements with employers that protect as much as possible workers’ rights.

These uncertainties and risks led the two major social partners, the Confederación General del Trabajo (CGT) and the Unión Industrial Argentina (UIA) to reach a framework agreement on the 27 April 2020, which has been followed by sectoral agreements, in order to implement more systematically and under the supervision of social partners the suspension of contracts. This agreement has been partially transformed into law by the Ministry of Labour, which has made more flexible the conditions under which a suspension can be agreed, but has also given more certainty to employers, unions and workers.

Trade unions have also played a crucial role in demanding the necessary equipment in order to protect workers’ health. This has been done not only directly to employers, but trade unions have also brought legal actions. For instance, a judge has declared that school workers, who were given no equipment whatsoever, should receive the necessary and adequate equipment before going to the workplace.

True to its principles, the Argentine government has invited social partners to participate in the design and implementation of policies. Despite some criticisms, social partners are not only part of the Social and Economic Council, they also play a key role in the adoption of framework agreements that limit the powers of enterprises when suspending contracts of employment. Trade unions have also been relevant in demanding the enforcement of the existing labour legislation, in particular regarding health and safety at work. Their role has been, however, far less significant in the informal sector.

The Challenges of the Informal Sector

The informal sector in both countries is relatively high. In Argentina, it is around 35% which can go up to 50% if dependent self-employed are included. In Brazil, it is approximately 40% of the workforce. This is crucial because they are not entitled to the wage subsidies and protection at the workplace level such as sick pay, short-time schemes, unemployment benefits, and other reliefs. Unlike the above-mentioned policies, in this respect, both countries seem to have adopted a similar approach.

The Argentine government decided to grant the self-employed, whose earnings are modest, and precarious workers (such as informal workers and domestic workers) a one lump sum of AR$ 10,000 (roughly £125) per household. Given the ongoing nature of the lockdown – which will probably go until mid-July at least – the government has decided in June 2020 to pay exceptionally the IFE for a second time.

The only measure adopted by the Brazilian government to protect informal workers creates an emergency income for low-income workers who have a monthly average family income up to half of the minimum wage or a total monthly average family income up to 3 minimum wages. The government will pay R$ 600 (approximately £91) monthly for three months.

Despite the significant effort made by both governments and the taxpayer, relatively modest lump sums will certainly not be sufficient for a significant percentage of the population, who rely on weekly or fortnightly wages. There is a considerable percentage of those workers whose earnings are below the national minimum wage. Unsurprisingly, there is a significant percentage of the workforce that lives below the poverty line, the majority of which are employed in low-productivity sectors. Therefore, a strict and lengthy confinement could have a harsher impact on the weakest sectors of society than COVID-19 itself. For them, their choice will be between taking the risk of contracting COVID-19 or hunger. Moreover, informal workers have no representation that can channel their demands. Trade unions have played a very limited role in protecting their rights.

Looking Forward

Despite their political, economic, and geographical connections, Argentina and Brazil have adopted contrasting approaches to deal with the COVID-19 crisis. Bolsonaro has embraced the request of the main employers’ organisations and has side-lined trade unions. Meanwhile, Argentina has decided to implement policies that aim to ensure the protection of workers’ rights and has given a prominent role to social partners. This contrast is mainly reflected in the formal sector, whereas differences are less distinct when it comes to the protection of workers in the informal sector.

Beyond the diverse approach, it is essential to remain vigilant and look closely at the measures adopted during this crisis, which may give more powers to the state and include ‘emergency law’ in the statute book. It is also crucial to ensure that the flexibility granted to companies in both countries – around norms related to working time, for instance – does not become permanent.

The urgency of these matters should not stop us from thinking about the already-existing and future challenges of labour laws in the Global South. The fragmented labour market and the high percentage of informality have been, and will remain, challenges that countries need to overcome. This is essential to ensure the achievement and attainment of the UN 2030 Sustainable Development Goals. This approach should be developed under the lens of human rights as stated by a recent resolution of the Inter-American Commission of Human Rights, which sets out that Member States’ policy responses must protect the right to health for every human being, and the economic and social rights of every worker. This certainly includes the protection of workers’ rights – in particular precarious workers – and freedom of association.

 

Renan Kalil is a labour prosecutor in Brazil.

Mauro Pucheta is Lecturer in Law at Kingston University.

Image credit: Martin Sanchez on Unsplash