Jacobo Martínez – Associate
Companies in the region have been faced with one of the harshest crises in the last 100 years. No one, neither government nor private initiative, was prepared for a pandemic. The closings of economic activities have represented a huge challenge for employers, who have had to deal with a drastic decrease in income as well as prohibitions to carry out their operations personally at the workplace.
In Guatemala, there is a paradigm that employees can only perform their functions in the workplace, and therefore, a minimum number of companies promote or allow telework, and an even smaller number have telework policies in place. Employers have been faced with a new reality that has forced them to break common beliefs and practices in work relationships. It sounds harsh to indicate that they have been forced to, but it is reality. Companies that resisted change, or did not initially consider it, have been affected (even more) by their income, with consequences, even fatal, for companies.
Even with the implementation of teleworking policies as well as the use of digital platforms for the continuation of business activities, companies have faced a high reduction in their income, derived from the low circulation of the population as well as uncertainty generated by the pandemic regarding the continuity of economic income in families, this means people are not consuming or buying at the usual levels. From the foregoing comes what could be considered the greatest challenge for employers; the unsustainability of the company’s payroll with lower (or no) income levels. The leaders of the affected companies have had to make drastic decisions regarding their human resources, implementing measures that in other circumstances would be inconceivable.
We have witnessed firsthand the complexity of these decisions, as well as the desire of companies to affect their workers as little as possible, seeking first of all to keep as many jobs as possible.
Fernando Farrar – Associate / Andrea Melara – Paralegal
The public health emergency caused by the COVID-19 pandemic caused the owners of micro, small and medium-sized enterprises to face new challenges to keep their businesses afloat, on the other hand, for many it was impossible, since due to In the delicate state in which the economy of El Salvador was for years, this pandemic became a trigger for the definitive closure of its operations. Other companies, after seeing the various conflicts that existed between the Executive and the Legislative and the legal insecurity that we experienced during the lockdown, was sufficient reason for them to decide to temporarily close their establishments, for many entrepreneurs (if it is not that for all), the fact of complying with the obligation derived from the principle of “labor stability” that was granted during confinement through Legislative Decree 593 was complicated, this decree indicated certain restrictions/requirements for employers, for example, continue Paying wages, this obligation was never established in a certain way, it was always a little in doubt, however, the threat was very present, and employers preferred to pay to their employees at the risk of facing future demands.
Many companies had to reinvent their items to continue operating, for example, companies that were engaged in the wholesale distribution of beauty and personal care products, due to the almost total closure, they had to choose to market products that were authorized by the various regulations that arose in this period, in this case, changed their heading to market hygiene products such as antibacterial gel, masks, etc. to continue generating income and thus be able to fulfill the obligations that they have month by month. In the case of the textile maquila beneficiary of the Free Zones Law, many of them managed before the Ministry of Economy the expansion of their permitted operations, to include the production of masks, among others. Then, request the operation request from the Ministry of Health.
On June 16, 2020, phase 1 described in Executive Decree 31 began, issued and published in the Official Gazette on June 14, 2020. This phase is intended to restart economic and social activities, and its duration will be up to Monday, July 6, 2020.
Faced with the gradual opening, we find two scenarios; we see companies that decided to close because they no longer had the economic capacity to continue operating, and we also see companies that suffered damage to their productive capacity, however, they still have the possibility of rising little by little. For the purposes of this review, we will focus on the latter.
The challenges that are coming for these businessmen are great, and they do not focus only on the harmful confrontations that may exist between the Executive and the Legislative, or the arbitrariness that may arise from them, they are also based on the economic crisis that they will have to face after 3 months of not generating income and how they will control and ensure that their workspaces are suitable to avoid possible contagions and thus continue to operate.
Companies will inevitably have to reinvent themselves. This can be a window to create new sources of income and explore new markets. In addition, they will have to have the safety and hygiene protocols designated for each item and ensure their application strictly and continues.
Another challenge that will be presented will be how they will manage human talent; here, it will be necessary for companies to determine whether telework is really an option for them to continue performing their functions as they usually did.
Laura Maldonado – Associate
The COVID- 19 pandemic has posed challenges in the way of working in the world; consequently, employers in Honduras have had to: define jobs that would be managed under the figure of teleworking, since until March 13, 2020, this type of employment was not regulated in the legislation; apply suspensions to employment contracts for positions that cannot be managed via telework; and implement Biosafety Protocols for the reimbursement of activities in each operation.
Much remains to be done, and within the new opportunities, each employer should: promote systems or methods in their work centers that measure the performance of their employees who work via telework; incorporate all the Covid – 19 and telework regulations into its internal regulations; strengthen the Joint Hygiene and Safety Committees and, develop the risk management systems in matters of Occupational Health and Safety that must be updated in accordance with local regulations.
For the most part, these new needs must await changes in local regulations that allow: 1) The evacuation of disciplinary processes by electronic means; 2) Smooth communication of business instructions to employees using various electronic channels; 3) The incorporation of prohibitions and obligations to collaborators regarding compliance with the mitigation measures by Covid – 19; and 4) The due and robust regulation of telework by means of a reform to the Law.
Favio Batres – Senior Associate
1. Companies´ adjustments during the pandemic. The pandemic has marked a turning point in the companies´ structuring and designation of budgets, in the availability of fresh economic resources and in the way of coping with the financial challenges involved in their projects and activities. Many companies have had to manage without budgetary lines now regarded as non-essential, redistributing resources to potentiate those areas allowing the company´s subsistence and operativity against a significant income reduction that not long ago was, to a certain degree, continuous and stable. These changes have led employers to profusely explore the legal surroundings in the country, in the quest for support or platforms upon which feasible legal solutions may be implemented in their companies, adjusting their organizational, productive, labor and financial schemes to the demands in times of pandemic.
2. Alternate method in the work performance during the pandemic. The pandemic has also stimulated the creativity of employers in an attempt of protecting the health of employees as well as to guarantee the production continuity. The work from home method, an unusual work scheme in the country, has been implemented by different employers during the pandemic, gradually at first, and further becoming the most sought and applied alternative for such job positions which characteristics allow employees to work from home. However, this alternative poses some challenges for employers, from issues with equipment, technology, internet access, electricity consumption and others, to the limits or extent of responsibility of employers with respect to employees due to the particularities of this type of work, which altogether have led to the adjustment or development of policies, contractual amendments and investments in the employee´s training.
3. Temporary adjustments or post-pandemic permanent changes? It is an important question. If the changes or measures implemented during the pandemic prove to be sustainable in time, it would be valid to ask whether in a post-pandemic scenario those changes would still be regarded as mere temporary adjustments or as permanent changes. For instance, if the home office alternative turns out to be an efficient method allowing cost-savings in non-essential offices or facilities while maintaining the desired production levels, or if the budgetary redistribution generates measurable positive effects in the company´s performance, or if the health safety measures, such as the social distancing, remains in effect, then today´s adjustments, which basically are aimed at the human health protection, may become our new permanent reality tomorrow, in which employers would reconsider and reframe policies, internal regulations, labor contracts, budgets, human resources and others, in what could be a post-pandemic´s new pattern for doing business.
Nancy Muñoz – Associate
The Covid – 19 pandemic crisis, which currently has reached more than 8,000,000 million people and has resulted in more than 445,000 deaths worldwide, has represented 2.127 people infected in Costa Rica up to June 20th and 12 deaths to date. Nevertheless, from the health and medical point of view the national emergency can be classified as well handled, from the economic point of view is the opposite, given that the employment sector, production lines, consumption and investment are being seriously affected.
This pandemic has forced employers to find solutions to avoid bankruptcy within the legal standards. One of the first challenges was defining the measures to be implemented with their personnel. To then define the personnel to which they would be applying the measures. At the same time, they assumed the challenge of rethinking the work schemes to apply work from home or home office, which implied creating the mechanisms of control and measurement of skills to guarantee that the workers meet the proposed objectives.
The crisis is not over and there is no sign that it will end soon in our country. Hence, the challenge for companies in the future will be to adjust to what many have called “the new normality” and which is precisely the need for adaptation, applying new measures to be able to cope with the activities promoted by the different sectors of the economy, containing as far as possible the spread of the COVID-19 virus.