Gustavo Petro, president of Colombia, proposed a new labor reform, which has caused significant discontent among citizens. Principal changes include:

  • Digital Platforms Leveraged in Gig Economy (Article 29. Duty to verify social security): Digital platforms must verify that such workers are affiliated to social security or otherwise must assume the payment of 100%.
  • Dismissal of Vulnerable Employees (Article 4. Job stability): People described below, could only be dismissed if in addition to the existence of a just cause or a legal cause, having exhausted the respective procedure, and are:
  • Mothers or fathers, head of household whose family income depends on the salary earned.
  • Disabled
  • Pregnant women and up to 6 months after child birth.
  • Pre-pensioners, i.e., those who are three (3) years or less away from fulfilling the requirements to obtain the old age pension.
  • Holidays and Sunday Work (Article 18): Employers are supposed to pay you overtime if you work on a holiday or Sunday, but now it is proposed that holidays and Sundays shall be paid with a 100% overtime and night hours shall start at 6:00 pm, so every work after that time falls under this rule too.
  • Contracting Models ( Article 47. Indefinite term contracts will be the general rule): it gradually puts an end to independent contracts, where in some cases it is not used for temporary jobs, and it really is an employment relationship and the payments that by law correspond are recognized.

The reform has caused significant discontent, particularly in the case of Rappi workers who decided to protest against its implementation. The President’s response to the protests has been indifferent, and his recent tweet ridiculing protesting Rappi workers has done little to calm the situation.

What motivates these workers to protest against such labor reform?

The CEO of Rappi, Simon Borrero, has stated that between 80 and 85 percent of their workers work occasionally, and many have other jobs, study, or devote time to their families. Thus, they would not be able to continue working under the proposed model.

That explains why Rappi workers’ protests against the labor reform are understandable, as the proposed measures would initially affect their ability to manage their time. Beyond that, the proposed reforms threaten the freedoms and flexibility that have enabled the company to thrive and have created employment opportunities.

Current Minister of Labor, Gloria Ramirez, indicated that the present labor reform “does not seek to generate employment, but to improve working conditions”, which makes the situation very worrisome, especially for those people who live in the informal sector and those who are unemployed.

In view of this, people such as the president of Fenalco, Jaime Alberto Cabal, show their concern about the situation by calling for another new labor reform project, since it is more than clear that the current proposal would seriously affect the economy and the employability of the country.

A labor reform that negatively affects workers should not be implemented.

The proposed labor reform in Colombia would have negative consequences for workers in the gig economy. To illustrate my point, let’s consider the case of two workers named Juan and María.

Under Rappi’s flexible labor model, María earns more money than Juan because she works more hours delivering goods, whereas Juan only works a few afternoons a week because he also has to help run his father’s business. However, if the labor laws changed to require a set schedule of 40 hours per week, Juan would not be able to comply because of his obligations to his family’s business, and María would not be able to work in the mornings, because she is attending university.

If Juan and María were both required to work a set schedule and were paid the same amount regardless of the number of deliveries they made, it would be unfair to María, who can deliver twice as many goods as Juan. This would also decrease productivity, as it would not incentivize workers to be more efficient. Therefore, the flexible labor model, which pays workers based on the number of deliveries they make, is more beneficial for both workers and employers.

It is important to consider the reasons why employees are protesting the labor reform and to acknowledge their right to do so. Any reform that would leave many people without jobs and worsen the country’s economic conditions should not be implemented. The government should not impede economic growth but rather promote economic freedom by providing incentives for workers to be more productive and for entrepreneurs to innovate and satisfy societal needs.

 

Omar Camilo Hernández Mercado is a law student at the Universidad Libre de Colombia, Senior coordinator of Students for Liberty in Colombia, and a seminarist in “The Austrian School of Economics” at the International Bases Foundation.