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Viewing cable 06MONTEVIDEO10, URUGUAY PASSES UNION PROTECTION LAW

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Reference ID Created Released Classification Origin
06MONTEVIDEO10 2006-01-05 16:34 2011-04-28 00:00 UNCLASSIFIED//FOR OFFICIAL USE ONLY Embassy Montevideo
VZCZCXYZ0010
RR RUEHWEB

DE RUEHMN #0010 0051634
ZNR UUUUU ZZH
R 051634Z JAN 06
FM AMEMBASSY MONTEVIDEO
TO RUEHC/SECSTATE WASHDC 5189
INFO RUCNMER/MERCOSUR COLLECTIVE
RUCPDOC/DEPT OF COMMERCE WASHINGTON DC
RUEHC/DEPT OF LABOR WASHDC
RR RUEHWEB

DE RUEHMN #0010 0051634
ZNR UUUUU ZZH
R 051634Z JAN 06
FM AMEMBASSY MONTEVIDEO
TO RUEHC/SECSTATE WASHDC 5189
INFO RUCNMER/MERCOSUR COLLECTIVE
RUCPDOC/DEPT OF COMMERCE WASHINGTON DC
RUEHC/DEPT OF LABOR WASHDC
,UNCLAS MONTEVIDEO 000010 
 
SIPDIS 
 
DEPT FOR WHA/BSC AND EB 
 
SENSITIVE 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: ELAB ECON EINV PGOV UY
SUBJECT: URUGUAY PASSES UNION PROTECTION LAW 
 
 
1. (U) Summary.  On December 22, Congress passed a law 
on the ""promotion and protection"" of unions.  The 
heated six-month debate clearly aligned the ruling FA 
coalition with union interests on one side and business 
organizations and the opposition on the other.  The law 
bans discrimination against workers for union activity. 
Business interests reacted strongly against the 
proposal, but the left-leaning administration passed 
the law with little concern for the business 
community's displeasure.  The law pandered to the 
Frente Amplio (FA) ""base"" and could complicate or ease 
government FA orthodox economic policies depending on 
how the unions use their new power.  End summary. 
 
THE LAW 
------- 
2. (U) The law forbids the firing or discrimination in 
hiring of union leaders, representatives, negotiators, 
or workers intending to form a union merely for union 
activity.  The Uruguayan constitution guarantees the 
freedom of unions, and proponents pushed the law as a 
validation of this right.  Under the law, employers 
must prove that the employee was not fired or refused 
employment for union activity.  If the employer cannot 
prove an alternative cause, the employee must be 
returned to work and compensated for lost pay.  Cases 
will be decided in courts supervised by the Ministry of 
Labor. 
 
 
BUSINESS RESPONSE 
----------------- 
3. (SBU) Shortly before passage, twenty business 
organizations created a joint statement voicing their 
strong opposition to the law.  The communique argued 
that the law will affect the viability of firms, over- 
strengthen unions, and hamper job creation.  The 
President of the Chamber of Commerce again articulated 
these concerns to the Charge in December.  The 
Chamber's chief legal counsel argued that the law turns 
entrepreneurs into ""human resource managers of the 
unions.""  He especially criticized the immobility of 
labor and the abandonment of the GOU's traditional 
hands off"" policy of non-interference in collective 
bargaining. 
 
GOU POSITION 
------------ 
4. (U) The GOU argued that the law previously favored 
employers and the new law meets the requirements of 
several international agreements and the Uruguayan 
constitution.  There was little disagreement within the 
Frente Amplio prior to passage, and the government 
proceeded with the law as a fait accompli.  President 
 
Vazquez avoided a meeting with business leaders, and 
the government did not really argue for the law as much 
as it argued against the objections of businessmen.  In 
the end, the government made minor modifications to the 
law, but business leaders seemed far from satisfied. 
 
COMMENT 
------- 
5. (SBU) The PIT-CNT (National Workers Confederation), 
the labor movement's umbrella organization, has long 
been a mainstay of support for the FA in general and 
the President's Socialist Party in particular.  It is 
no surprise that the new government backed pro-union 
legislation.  At first glance the law seeks to protect 
the right to organize, but business leader fears are 
also justified.  The eventual result of this law will 
depend on the degree to which the unions use it to push 
for further gains.  Since the union protection law was 
proposed, PIT-CNT reported their largest membership 
gains in several decades.  If unions begin to use their 
increasing enrollment as a political weapon, they could 
have a large impact on future politics and policy in 
Uruguay.  But if these protections become merely a 
political trade off to insure continued support for 
orthodox macro-economic policies, the bargain could be 
politically profitable for the Frente Amplio.