Sources of regulation
The Labour Code in force in Bolivia is the oldest labour
legislation in the region. It was promulgated by a Supreme Decree (SD)
on 24 May 1939 and elevated to the rank of an Act (GLA) on 8 December 1942.
The GLA governs both collective and individual labour relations. However,
various decrees and regulatory standards, including regulations provided
under Act No. 224 of 23 August 1943 (RD), have since introduced amendments
and supplementary provisions, tailoring the standards to take new developments
into account.
The Constitution (latest version: Law No. 1585 of 12 August
1994) establishes and protects inalienable labour rights: the rights to
work, health and assembly, the inviolability of social rights, to make
petitions, individually and collectively, and so on (arts. 5, 6, 7, 8,
156 et seq.). Apart from ensuring the protection of the State for labour
and capital, art. 157 of the Constitution states that “... the law shall
regulate their relationship [labour and capital] by establishing rules
concerning ... compensation for length of service, discharges ... and other
social and protective benefits for workers. It is a function of the State
to create conditions which will guarantee security of employment ... to
all”.
Although there is a right to collective bargaining, only
a few collective agreements are in existence. There is nothing to prevent
the inclusion of clauses and terms on dismissal, but most agreements focus
on remuneration issues.
Scope of legislation
Bolivian labour legislation governs labour relations in
the private domain which take place through a contract of employment in
either oral or written form. It applies to all workers except for permanent
and temporary agricultural workers (who are governed under the law by special
provisions) and public servants (who are governed by Decree Law No. 07375
of 5 November 1965, and are defined by SD No. 08125 of 30 October 1967
as any civil servants remunerated by the National Treasury, regardless
of the institution for which they work). The legislation nevertheless applies
to employees of public undertakings and institutions in which they are
not considered civil servants.
Contracts of employment
There is said to be an employment contract when salaried
employees and blue-collar workers render their services to another person,
the employer, for the carrying out or operation of a task or enterprise,
except – as mentioned – in agricultural work (sec. 1, GLA, and sec.
1, RD).
As in the other countries of the region, a probationary
period is considered an initial stage of the employment contract
which gives the employer the opportunity to assess the aptitude of the
worker, and, in turn, allows the worker to decide whether the conditions
of work are satisfactory. Either of the parties may end the employment
contract at any time without prior notice during this period. The maximum
duration of this period is three months (sec. 1, GLA, and sec.
1, RD). Successive employment contracts concluded for short periods
of a shorter duration than the probationary period acquire the status
of contracts of indeterminate duration from the conclusion of the second
contract, provided that they pertain to the normal work of the undertaking
(Ministerial Decision No. 193/72 of 15 May 1972). For the purpose of
termination of employment, the length of service is calculated from the
date on which services were engaged, including the months considered
as probation (sec. 1 of the Act of 3 Nov. 1944). According to
Supreme Decree No. 17289 of 18 Mar. 1980, applicants with credentials
of their professional qualifications, and those accepted for employment
on the basis of a merit or proficiency examination, persons rehired and
workers employed for a certain time or short term, are exempted from
the probationary period prescribed in sec. 13 of the GLA.
As regards the duration of contracts, the GLA, Ministerial
Decision No. 283/62 of 13 June, Ministerial Decision No. 193/72, and Legislative
Decree No. 16187 of 16 February 1979 establish that contracts are essentially
concluded for an unspecified period (sec. 12, GLA), but may be limited
depending on the nature of the task to be completed or the service to be
rendered, taking into account that contracts of fixed duration are not
permitted for the permanent and normal tasks of the undertaking.
Contracts of specified duration may not exceed one year,
but may be renewed for an additional year, provided that the employer proves
the absolute necessity of such renewal to the administrative authority.
If work continues after the term has expired, the contract will be regarded
as being of indeterminate duration (sec. 21, GLA).
Successive contracts of employment become contracts of
indeterminate duration from the third contract, provided that they do not
involve the normal tasks of the undertaking. This is also the case with
seasonal contracts and contracts for tasks and services for consulting
and construction undertakings which are extended until the completion of
the task or the specified services.
Termination of employment
Bolivian legislation contains provisions on termination
of employment in the event of the death of the worker and tacitly by mutual
consent. The GLA also provides for termination by the worker without just
cause (sec. 12, GLA, and SD No. 6813 of 3 July 1964) by giving notice
at least 30 days in advance (failure to give notice places an obligation
on the worker to pay the employer compensation equivalent to 90 days’ wages).
Termination of the employment contract for just cause is prescribed only
in the case of reduction of wages or salaries, and the worker must receive
compensation corresponding to his or her length of service (sec. 2,
SD of 9 March 1937).
Dismissal
Bolivian legislation defines the notice the employer may
give in order to dissolve the employment contract without stating a reason
(secs. 12, 13, and 16, GLA; sec. 9, SD No. 224 of 23 August 1943; sec.
11, LD of 24 May 1937; sec. 1, Act of 23 November 1944; SD No. 6813 of
3 July 1964).
Contracts concluded for an indeterminate period and for
a specified period may both be terminated by the employer without a valid
reason, by giving 90 days’ notice or a compensatory indemnity equivalent
to the wages for the corresponding period.
Such compensation is not due and no notice is required
if the worker, through his or her actions, gives reason for dismissal (see
below). Notice is also not required if legal proceedings to settle collective
disputes are pending.
Notice may only be given in banking institutions for employees
who have worked for less than five years. Employees with more than five
years’ service may be dismissed for serious disciplinary misconduct, proved
before a special court which renders decisions in the first instance.
There is no need for compensation or severance pay when
employment has been terminated for the following reasons (secs. 16 and
17, GLA, sec. 9 of Regulatory Decree No. 224 of 23 Aug. 1943, secs.
3 and 4, Legislative Decree No. 2565 of 6 June 1951):
- deliberate
material harm caused to the instruments of work, machinery, products and
merchandise;
- disclosure
of industrial secrets;
- forgetfulness
and carelessness affecting industrial health and safety;
- total
or partial non-compliance with the employment contract, company by-laws
or agreement;
- breach
of confidence, robbery or larceny by the worker;
- unjustified
absence from work for more than six consecutive days;
- voluntary
resignation of the worker before completing the period of notice;
- acts
of violence, insults and immoral conduct of the worker; or
- collective
abandonment of work, if the workers fail to comply with the order issued
by the competent authority.
Termination is also allowed for reasons related to the
requirements of the undertaking, but no special standards have been formulated
in this regard, except the relocation allowance which took temporary effect
as a transitional measure (until 31 December of 1985, SD No. 21060 of 29
August 1985).
Trade union immunity is treated in the Constitution as
a guarantee to union leaders during the exercise of their mandates, for
which they may not be prosecuted or arrested (art. 159, Constitution).
Similarly, trade union representatives may not be dismissed without prior
judicial process, which also provides an opportunity for the employer to
identify legal justification authorizing dismissal (Legislative Decree
No. 38 of 7 February 1944).
Bolivian legislation also establishes family immunity to
guarantee a woman’s right to retain her job during pregnancy and up to
one year after childbirth (sec. 1, Act No. 975 of 2 May 1988). As
a result, if she is dismissed, she is entitled to the same compensation
prescribed for termination of employment by the employer without valid
reasons (see above).
Notice and prior procedural safeguards
If there are no valid reasons for dismissal, the employer
is required to give notice or pay the worker compensation in lieu of notice
(see above). If dismissal is based on a valid reason, notice is not required,
in which case there are no statutory conditions or formalities serving
as guidelines for the dismissal.
Severance pay
When a worker retires against his or her will, the employer
is obliged to pay compensation corresponding to one month’s wages or salary
for each year of service.
If the period is less than one year, payment is proportional
to the months worked, deducting the first three months considered as a
probationary period, except in the case of contracts of specific duration
from which no time will be deducted. This right covers only workers who
have completed five or more years of continuous service and is forfeited
in the event that the worker has committed any of the following acts:
- deliberate
material harm to the instruments of work;
- disclosure
of industrial secrets;
- forgetfulness
and carelessness affecting industrial safety and health;
- total
or partial non-performance of the agreement; or
- robbery
or larceny.
The loss of the right to compensation is applicable only
to the current five-year period without affecting those rights accumulated
beforehand, which are considered acquired rights. Compensation is paid
taking into account the average wages or salaries for the last three months
prior to dismissal. It is payable within 15 days of termination of the
employment relationship (Sec. 13, GLA; sec. 1, Act of 9 November
1940; secs. 11 and 12, GLD No. 224 of 23 August 1943; secs. 6,
8 and 11, SD No. 1592 of 19 April 1949; secs. 2, 3 and 4, SD
No. 7850 of 1 November 1966; secs. 1 and 3, SD No. 11478 of 16 May
1974; sec. 4, Act No. 16187 of 16 February 1979; SD No. 21437 of
10 November 1986; SD No. 21678 of 18 August 1987; secs. 1 and 2,
SD No. 22081 of 7 December 1988).
Avenues for redress
Bolivian legislation contains no provisions for reinstatement
in the event of unjustified dismissal. It provides only for the payment
of compensation or severance allowance upon the termination of service.
The labour courts are responsible for handling claims in
the area of dismissal, and the process is governed by the 1979 Code on
Labour Procedure.
Further Information
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