With dollar as the legal currency in Ecuador, production has to be more competitive. One of the main points to be analyzed for that goal is labor area. Labor Procedure Code has been liberalized as an effort to increase commerce and competition as well as to encourage external investments.
US. D $ 137.91 represents the minimum salary for a general worker. This amount is nominal higher than similar in Peru or Colombia but under actual terms this amount is not enough for the minimum consume of an Ecuadorian family.
Employer/employee labor relationships are not always good and sometimes a legal procedure is necessary to resolve disputes. Last reforms are focused on an "oral" trial basis which will be on effect since the second half of 2004. Oral procedure is not only the main point but also imposed deadlines for judges and fines for breach of this procedure have to be bolded. If a labor suit is started it will be supposed to have a final decision within a period two or three times shorter than now.
But other labor aspects were not included under that reform: collective contracts, the participation of 15% from the net profits of a company for workers, the minimum legal amount to pay an employee under an hour-contract (US. D $ 0.97) is also jeopardous, among others are usually considered too strong for an employer and a reason to push the costs of general production in Ecuador.
Those reforms should have been analyzed with visa and work permits concessions for foreigners which are the other side of this scenario.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.