Established in 2011 by Chile, Colombia, Mexico, and Peru, the Pacific Alliance – which collectively has a 225-million-strong population of mostly young workers – was launched to further the growth, development, and competitiveness of its member states, and greater political and economic ties with the Asia-Pacific region.
As the covid-19 pandemic reached Latin America in March 2020, it was announced that the bloc’s member states would exchange information and practices designed to mitigate the impacts of the looming international health crisis head-on. However, in the year since the coronavirus outbreak, what remote working regulations have been put in place by the local governments, how have employers in these nations adapted to the pandemic, and what should multinational companies know about doing business in the region as the virus continues to spread? With the help of Garrigues’ labour and employment team, IEL continues its examination of remote-working policies in Latin America with this latest article on workplace regimes in Chile, Colombia, and Peru.
In Colombia, there are two forms of remote-working arrangements: teleworking, allowing employees to use technology to work away from their employer’s physical offices or worksites permanently; and home working, which only applies for occasional, temporary, and exceptional situations, such as the pandemic. As things stand, workers in Colombia are permitted to continue their employment from home instead of at their usual place of work, until the end of the nation’s State of Health Emergency decreed by President Iván Duque Márquez - currently 31 May 2021.
Following legislation passed in April 2020, Chile likewise has two remote-working regimes: “distance working” and teleworking. Both regimes require a written agreement between employer and employee, which must be registered through the government’s labour board within 15 days of implementation. Either party may withdraw the agreement and return to the workplace on giving at least 30 days’ notice. Employees under either regime are entitled to their right to disconnect and a right for at least 12 uninterrupted hours in any 24-hour period.
Under distance working, employees are subject to working hours and entitled to overtime, but it may be agreed that working hours can be completed at times that best suit the worker’s needs. For teleworking, the worker will also be subject to working hours unless the parties agree to be excluded. In such instances, the teleworker will not be entitled to overtime; however, it will be presumed the employee is on a working day if the employer exercises functional control over the manner and timing in which the work is carried out. In this instance, they will be entitled to overtime.
Meanwhile, Peru’s government approved the use of “remote working” instead of teleworking in response to the covid-19 crisis. This is despite teleworking already being recognised in national law.
Under the teleworking regime, employees are allowed to work anywhere other than their employer’s offices; the employer must bear the cost of the tools and services their workers require, such as computers and internet access; formal consent to amend contractual terms are required; and the employer is entitled to evaluate teleworking to decide if the employee’s physical presence at the office is required.
By contrast, Peru’s remote-working declaration, valid until 31 July 2020, allows an employer to instruct the employee to execute services from home without the need to formalise any agreement or to define terms and conditions. It is important to note that Chilean law does not recognise a unilateral right of the employer to impose a remote-working regime, unlike in Peru where employers may order remote working among all employees to prevent the spread of covid-19.
Taking the various differences into account, what have been the specific practical, legal, business, or compliance challenges for employers during the pandemic? “The most significant challenges have been in controlling working hours, the control of employer information, and complications in suspending and terminating labour contracts,” say Carlos Arturo Silva, senior associate, and Ignacio Londoño, partner, in Garrigues’ Bogota office.
“The Ministry of Labor has indicated that the remote work alternatives must be used to protect the right to work. However, if the employer alleges that this is not possible, then it is up to the labour judge to consider whether there is a scenario of force majeure where the suspension of contracts is viable. This implies the possibility of suspending contracts to manage financial crises of companies is only viable when it is impossible to resort to remote work figures.”
...to date, just over 200,000 people have been vaccinated [in Colombia], it is possible that the state of emergency will continue. This means remote working could continue until the end of October
Bárbara Vera, principal associate, and Tomás Larraín, senior associate, in Garrigues’ Santiago de Chile office say the prevention of occupational accidents and disease outside of the traditional workplace has been a challenge for employers along with slightly more mundane worries. “How employers would provide the necessary tools, equipment, and supplies for rendering services under distance or teleworking was also a challenge, along with an additional allowance for reimbursing the operational and maintenance costs associated with distance working or teleworking, such as the internet, increased utilities costs, lunches, etc.”
Garrigues counsel Franco Muschi and associate María Inés Rossello in the firm’s Lima office cite three burning issues for employers: “First, the execution and review of remote working among all companies – this was a challenging decision as not all employees were familiar with executing activities under remote schemes. Second, the carrying out of a comprehensive review of internal processes and procedures – such as working hours and attendance control – to adapt to a new form of service provision. Finally, employers were obliged to agree to ‘virtual’ dismissals, salary reduction, and temporary employment suspensions under remote circumstances.”
With remote working objectively a success in Peru, Muschi and Rossello expect employees to continue working from home for the rest of 2021. But what of their colleagues in Colombia and Chile; how long do they envisage remote working will continue across the region?
“Taking into consideration that the use of the work-at-home modality is tied to the state of emergency, it can be said that, for now, the mechanism will continue to be implemented until 31 May 2021,” say Silva and Londoño. “However, keeping in mind that the president has extended the declaration several times and that, to date, just over 200,000 people have been vaccinated, it is possible that the state of emergency will continue. This means remote working could continue until the end of October.”
“In our opinion, remote-working regimes will continue to increase year-by-year across Latin American countries,” suggest Vera and Larraín. “Due to covid-19, most of the countries in the region are using remote-work regimes and we expect that they will continue even after the end of this pandemic.”
Now a year into the pandemic, what has Garrigues’ labour team learnt from their clients’ experiences in Colombia, Chile, and Peru, and what advice do they have for multinationals with interests in the region?
“Many Colombian companies have reinvented themselves,” say Silva and Londoño. “The greatest ally for their operation has been the implementation of technological platforms. For example, health insurance companies have implemented online ‘self-diagnostics’ to redirect users to national helplines for covid-19 and health guides with actions to follow. Banking companies have also implemented apps to reduce the use of cash and ATMs.”
Vera and Larraín advise employers to consider the following before offering teleworking or distance work in Chile: “Will the employee be subject to working schedule limits? How will you control working hours? Can the employee be exempt from such limits under either regime? How will you provide adequate information to workers regarding any potential occupational risks to which they might be exposed, along with preventive and safe working practices? What new mechanism could you consider for this purpose? How will you make sure that health and safety requirements will be complied with? Also, consider how will you reimburse operational costs and how will you provide personal protection equipment to teleworkers or distance workers?”
“We would advise employers to review how remote working is being applied and to identify potential contingencies that might affect it during 2021,” suggest Muschi and Rossello. “It is important to carry out a preliminary classification of the positions that may require modification. We believe several claims from employees regarding health and safety in the workplace will arise this year, significantly impacting employers. Adaptation of internal policies and guidelines that regulate the labour relationship must be carried out.”