Employment 2019 Second Edition

Last Updated August 06, 2019

Bolivia

Law and Practice

Author



CARRASCO FIRMA DE ABOGADOS specialises in labour law and provides support and advice in both administrative and contentious issues. In recent years, the firm has managed to expand its services in order to include corporate, commercial, civil, administrative, IP and litigation law. Personalised advice, as well as the adoption of preventive and timely legal strategies in the event of controversy, has allowed Carrasco to become one of the main law firms for companies and entities in Bolivia. The firm has offices in the cities of La Paz and Santa Cruz.

In Bolivia there are two kinds of workers: salaried employees (white-collar) and manual workers (blue-collar).

Salaried employees (white-collar) provide managerial, administrative or technical tasks in the public or private sector under a verbal or written contract in consideration of a salary.

Blue-collar workers are members of the working class who perform manual labour and are paid hourly and only for the hours worked.

The substantive elements of an employment contract in Bolivia are reliant upon:

•       the relationship of dependence and subordination with respect to the employer; 

•       the provision of work for others and the receipt of remuneration or salary in any of its forms.

Article 46 of the General Labour Law provides that:

•       the effective working day is eight hours per day up to a maximum of 48 hours per week, except for women who may work only 40 hours per week;

•       night work should not exceed seven hours. Work that takes place between 10 p.m. and 6 a.m. is considered to be night work.

The work schedule for management and trust personnel can be extended up to 12 hours per day. This rule is more clearly defined by Article 36 of the Regulatory Decree of the General Labour Law which states: “Managers, directors, administrators, representatives or proxies who work without immediate superior supervision, are included in the exception established in the second paragraph of article 46 of the law.”

Remuneration for Extraordinary and Holiday Hours, Night Work and Sunday Work

The General Labour Law, in its Articles 52 and 53 as well as its regulatory Decree in its article 39 respectively, establish the following:

•       Article 52:  salaries below the minimum wage may not be agreed; this sum is fixed by the Ministry of Labour. The minimum wage salary is proportional to the work done; no differences are to be made for reasons of sex or nationality.

•       Article 53: the time period for the payment of salaries may not exceed 15  days for workers and 30 days for employees and domestic workers. Payments will be verified in legal tender on a working day and at the place of work; it is prohibited to do so in places of recreation, or where the sale of merchandise or sale of alcoholic beverages takes place, except in the case of workers in the establishment which makes the payment.

•       Article 39: remuneration or salary is payment that the employee or worker receives in cash in consideration of his or her work (including  commissions and benefits, when they become permanent).

As stated above, no person may receive a salary lower than the national minimum wage. In addition, the government will increase the salary or wage on International Labour Day, May 1st, every year.

According to Article 48 paragraph IV of the Political Constitution of the State, salaries are guaranteed by the following:

•       wages or salaries accrued, labour rights, social benefits and social security contributions not paid have privilege and preference over any other credit and are unattachable and imprescriptible; since the salary is unattachable and imprescriptible, no deduction can be made from the worker's salary except those permitted by law (discount AFP contribution), even if it is justified, since any deduction must be made subject to a court order.

Where overtime is worked beyond the ordinary working day of eight hours, there is no difficulty in calculating additional wages. However, when the ordinary working day varies according to the production requirements of certain industries at certain times of the year when there is more demand, the ordinary working day may vary accordingly, as does the salary calculation.

The calculation for remuneration for night work, overtime, holidays and Sundays is made according to the points indicated in Article 55 of the General Labour Law, which states that overtime and holidays will be paid with a 100% surcharge, that is at double time, and night work will be paid with a 25% to 50% surcharge, depending on the circumstances. Work done on Sunday with regular assistance during the week is subject to triple time.

Finally, for this point it is worth noting some important considerations:

•       according to Article 50 of the LGT, the correction of work done during the day is not considered overtime;

•       Article 41 requires that a special register approved by the General Labour Inspectorate must be kept to record overtime;

•       Article 1 requires all night work carried out in commercial establishments and offices and, in general, all those tasks that by their nature do not require the physical presence of a worker, such as surveillance work, shall be remunerated with a 25% surcharge;

•       Article 2 requires that night work carried out in industrial and manufacturing establishments shall be remunerated with a surcharge of 30%;

•       Article 3 requires that night work carried out by women over 18 years of age (which is carried out under the conditions established by the Supreme Decree of 22 January 2019), will be paid at a surcharge of 40%; and

•       Article 55 clearly states that work done on Sunday with regular assistance during the week is paid triple.

In Bolivia, the minimum wage is called the 'National Minimum Wage', any increase of which are approved by the Bolivian Ministry of Economy and Public Finance. Bolivia's current minimum wage is BOB2,122 is the fifth highest in South America.

The increase in the national minimum wage is promulgated by the Supreme Decree of the President of Bolivia on Bolivian Labour Day, which is based on the inflation rate of the previous year.

With the implementation of the new currency, called the Boliviano, through Decree Law 901 of 28 November 1986 and that came into force as of 1 January 1987, the minimum salary of a worker in Bolivia evolved over the years and the decades according to the growth of the Bolivian economy.

Article 57 of the LGT mentions that the Christmas bonus or thirteenth salary is annual payment for service greater than three months. The bonus is equal to his or her salary divided by 12 and multiplied by the number of months worked in one year.

As of 2013, the government of Evo Morales Ayma decreed the mandatory payment of a double bonus or a fourteenth salary to all public workers or private companies as long as the Gross Domestic Product (GDP) of the country grows more than 4.5% each year.

In Bolivia, among the social benefits of workers is the long-awaited benefit of vacations, which is a period of rest paid to the employee or worker after they have completed one year of uninterrupted service.

Different allocation of rest days will be made, according to the seniority of the individual concerned.

Article 44, modified by Supreme Decree 3150 of 19 August 1952, states that workers who provide their services for twelve months are entitled to a holiday, in both private companies and in the public sector. The following schedule applies:

  • one to five years' service: 15 days' holiday;
  • five to ten years' service: 20 days' holiday;
  • ten years or more years' service: 30 days' holiday.

If, during the holiday period an employee or worker suffers from any illness, the sickness period is considered to be an interruption of that holiday. Vacations and medical leave are both paid. The days taken for holidays must must equate to regular working days only, not Sundays, holidays or non-working days.

Annual vacations cannot be accumulated for more than two periods, established in Article 33 of the DR of the General Labour Law.

Maternity

According to Article 61 of the General Labour Law, a mother has the right to rest 45 days before and 45 days after delivery. The decree states that once the baby is born,  the child can be taken to the place of work until he or she reaches six months of age.

The Supreme Decree (DS) 0012 of 19 February 2009 states in Article 2 (Labour Asset) that the mother and father, whatever their marital status, will enjoy labour protection from pregnancy until their son or daughter reaches one year of age; they cannot be fired, nor can their salary be changed (lowered).

In addition, there are prenatal and breastfeeding allowances: a prenatal subsidy and breastfeeding subsidy consisting of the delivery to the pregnant mother (insured or beneficiary) and the infant of a monthly allowance in kind equivalent to the national minimum wage. The prenatal allowance begins on the first day of the fifth month of pregnancy and ends on the day of birth of the child. The breastfeeding allowance starts from the first day of birth of the child for the first twelve months of life.       

There is also a birth allowance: is a single payment, equivalent to a national minimum wage, is paid to the insured pregnant mother or beneficiary of the birth of each child for one year from the date of birth.

Sometimes, a company may wish to stop an ex-employee from providing services to others at the end of their employment relationship, so a "non-competition or non-contractual agreement" thereto may be signed.

These covenants involve "limiting" one of the main rights of the person, ie "the right to work", but the law sets out a series of requirements to prevent such agreements from being misused. In the first place, they cannot be agreed for a period exceeding two years. In addition, the company must justify the existence of a commercial or industrial interest; that is, it is prohibited to work concurrently in "competitive" companies.

No information has been provided.

Bolivia does not have yet a general law on the protection of personal data. What it currently has are standards from various sectors that contain references to the processing of personal data.

According to Article 3 of the Ley General de Trabajo (LGT), in no company or establishment may the number of foreign workers exceed 15% of the total; this will include exclusively technicians.

In order to work in Bolivia it is necessary to have a visa, of which there are two types:

A Determined Object Visa

This visa may be requested for business trips or work contracts, voluntary unpaid social service, marriage or for temporary or permanent residence and has a duration of 30 days, extendable twice, up to a maximum of 90 days.

The requirements are:

•       an application Form, which is obtained from the General Directorate of Migration of Bolivia or can be downloaded from its website: http://www.migracion.gob.bo (procedures for foreigners, by nationality);

•       a valid passport with a minimum validity of six months;

•       a photocopy of the passport showing the affiliation page and the last entry stamp in the country;

•       a sworn declaration form before the General Directorate of Migration, and a statement of the object of the activity that will be carried out in the territory of Bolivia; and

•       if the applicant does not have a work dependency, he or she must present a notarised letter certifying the type of activity he or she carries out and a statement of economic solvency.

One-year Temporary Residence Visa

This visa will allow the applicant to stay in Bolivia for one year, during which time the applicant can carry out economic, sports and cultural activities (whether paid or not). It is advisable to apply for this visa if volunteer or social work is contemplated.

The requirements are:

•       a memorial and sworn declaration form, which can be downloaded from the Migration of Bolivia website: http://www.migracion.gob.bo (procedures for foreigners by nationality);

•       a valid passport with a minimum validity of six months;

•       a photocopy of the passport including the specific-object visa, the last entry stamp and the affiliation pages;

•       A work contract endorsed by the Ministry of Labour and photocopy of the NIT (Tax Identification Number) of the legalised company.

•       a criminal record certificate issued by the Special Fight Force against Crime (FELCC), (only for applicants those over 16 years of age);

•       an address registration issued by the FELCC;

•       a criminal record certificate issued by INTERPOL; and

•       a medical certificate issued by the competent authority, proving that the applicant does not suffer from a contagious infectious disease;

Once the above requirements requirements have been met, the following must be provided:

•       a memorial in writing, provided by a lawyer, requesting temporary residence of one year;

•       a red-background photograph (4 cm x 4 cm); and

•       a corresponding sticker.

If the applicant does not have work dependency, he or she must present a notarised letter indicating the type of activity to be carried out and proof of financial solvency.

In the case of companies, they must present a certified photocopy of the incorporation of the company registered with FUNDEMPRESA (http: www.fundempresa.org.bo) and a legalised photocopy of the NIT (Tax Identification Number) by the SIN (National Tax Service).

In the case of minors, the requirements are:

  • an application form that can be downloaded from the Bolivia Migration website: http://www.migracion.gob.bo procedures for foreigners, by nationality;

•       a valid passport with a minimum validity of six months;

•       a photocopy of the residence of the father or mother; and

•       a notarial letter indicating economic solvency.

Immigration Law No 370 of 8 May 2013 establishes that, in Article 48 (Labour Activity of Foreign Migrants):

  • foreign migrants admitted and authorised in the Plurinational State of Bolivia with temporary or permanent residence may carry out any remunerated tasks or activities on their own or in a dependency relationship, and shall enjoy the protection and rights of the laws that govern the labour and social security regime;
  • employers and employees must comply strictly with current labour legislation. The acquired rights and social benefits that correspond to foreign migrants are not to be affected by the work they provide, whatever their immigration status; and
  • companies which provide services in Bolivian territory that have foreign personnel must comply with current Bolivian regulations and the regulations of this law.

According to Article 51 (Prohibition of Work), foreigners who are tourists or visitors in the country may not work or perform remunerated or lucrative tasks unless expressly authorised by the Directorate General of Migration for humanitarian reasons.

Trade unions continue to play an important role for workers in Bolivia. Their main interest is focused on salary increases and employment stability for the workers.

Representative bodies hold meetings with the workers in order to protect their rights and to determine whether or not problems exist. These representatives are elected through a process established by the legal norms that govern trade unionism in Bolivia.

Article 49 of the Political Constitution of the Plurinational State of Bolivia states that “the right to collective bargaining is recognised”.

Issues discussed in collective-bargaining agreements with the unions may include wage and salary increases, reinstatement, paid vacations, calculation of seniority, working day, overtime, Sunday work, Christmas bonuses, vouchers, bonuses and other benefits, severance pay and compensation, maternity licence, vocational training and other social rights.

The ways to terminate a labour relationship include only those established in Article 16 of the General Labour Law and Article 9 of its Regulatory Decree. Also, an employment relationship may be terminated due to force majeure.

Specific legislation in the field of industrial relations prioritises stability for workers and protecting workers from dismissal where there has been no violation of Article 16 of the General Labour Law.

Article 10 of Supreme Decree No 28699 of 1 May 2006 clearly sets out the following:

  • when the employee is dismissed for reasons not contemplated by Article 16 of the General Labour Law, he or she may opt for payment of social benefits or reinstatement;
  • if a worker chooses social benefits, the employer is forced to pay them in addition to other benefits and rights due to him or her, as provided in Article VII of this Act;
  • where the employee opts for reinstatement, the employee will return immediately to the same position he or she occupied at the time of dismissal, and the payment of wages and other social rights will be updated to the date of reinstatement. In the event of a refusal by the employer, the Labour Ministry will impose a fine for violation of social laws and the employee may initiate a lawsuit demanding reincorporation with proof of unfair dismissal issued by the Ministry of Labour.

In anticipation of that provision, every worker can be deemed to have suffered from an unwarranted separation if he or she does not accept the the decision of the employer. He or she can elect for reincorporation, in which case he or she will receive payment of wages and other social rights that he received as a regular worker from the time of his her unjustified dismissal up to the moment of reemployment.

This right to retain their source of employment has also been consolidated in the new Constitution of the State, enacted by the present government on 7 February 2009, which in Article III-49 indicates that the State shall protect labour stability. Unjustified dismissal and any form of labour harassment is prohibited and the law shall determine appropriate sanctions.

Further, Article 48-IV of the same Constitution of the State states that wages or earned salaries, labour rights, social benefits and social security contributions that were not paid have preference and privilege over all other debts and these are inalienable and imprescriptible.

These protections have risen to the rank of constitutional law while protecting the right to reinstatement of workers who were dismissed without legal cause.

Without prejudice, it should be noted that the final part of the current Constitution Law in its Transitional Provisions does not refer to the status of special legislation governing various matters, including the nature of work not identified. This law expressly states that its approval will operate with an automatic repeal of the limitation expressly to abrogate the previous Constitution, which creates loopholes and susceptibility in the current application of the rules, for as long as the transition period continues, until both fit all national legislation.

Pre-notice of dismissal no longer exists.

Dismissal by justified cause; a contract of employment can be rescinded or extinguished for just reason or cause, including a breach of Article 16 of the General Labour Law and Article 9 of the Decree.

For these cases, Article2-I of Ministerial Resolution No 551/06 dated 6 December 2006 establishes a mandate to contain within the Internal Regulations of Work a committee made up of workers and employers (a 50/50 split) to ensure the impartiality of procedures on lay-offs. In the case of detachment on the above mentioned grounds, the worker will not be able to obtain social benefits except as follows:

  • five years of consolidated work (Quinquenio) for each five years of service, so any outstanding balance of a time period not completed will be lost. This payment represents the recognition of the equivalent of five average salaries that the employee would have received within the last three months of service;
  • leave allowed not taken, provided that the person had completed at least one continuous year of service.
  • a Christmas bonus, provided that the work complies with the requirements legally established  and that the grounds for dismissal are those provided for in Section 16 of the General Labour Law, sections d) and f), ie abandonment of work or retirement, and not in other cases as determined by the DS No 229, 21 December 1944.
  • A bonus for annual returns provided that the cause of separation is one of those provided in the Section 16 d) and f) of the General Labour Law, ie, abandonment of work or retirement, and not in any other cases as determined by the DS No. 229, December 21, 1944 – also taking in consideration the conditions laid down by law in terms of time spent working in the respective fiscal year.

Conclusion of Contract

A fixed-term contract may be subject to a fixed calendar term or the completion of work or services, in which case the employee will not be due compensation at the end of the contract. However, in cases of early termination the following become due:

  • compensation for length of service according to the law, which provides for the payment of an average monthly salary for each year of continuous work or one twelfth of the average wage received in the last three months of service, as applicable;
  • a Christmas bonus, in the proportion equivalent to the months of work in one year or, if necessary, by one twelfth, provided that the worker complies with the legally established requirements;
  • a bonus for annual returns, provided that the external audit report is approved by the fiscal entity in the respective fiscal year,  and that the worker complied with the legally requirements established in the fiscal year in question;
  • vacations not taken, provided that the worker has fulfilled at least one year of continuous service and which could not be accumulated, as determined by Article 33 of Decree of the General Labour Law.

Indirect Dismissal

Aside from the unrelated forms of dismissal described above, there is also "indirect dismissal," which has a broad definition but is actually the adoption by the employer of any conduct or  assignment that creates vested rights for the worker.

In this context, indirect dismissal can be understood as follows:

  • wage reduction;
  • category reduction;
  • the non-payment of salaries for more than two months;
  • mobbing, ie, group bullying, or psychological harassment at work;
  • the adoption of any measure without consultation with the employee that represents a substantial change in his or her employment contract, without his or her consent (eg moving the employee to another region, city or country when the employee was originally hired in a given city that might be considered to be the home of his or her family).

Of all the reasons for dismissal described above, with the exception of wage reduction the others are not explicitly provided for in Bolivian legislation and have been determined pursuant to decisions of the Supreme Court that has been expanding the scope of indirect dismissal.

As stated above, the only measure that is duly legislated is that of wage reduction, which is governed by Article 2 of the of  Decree of 9 March 1937, which states that, in the event of salary reduction, employees have the option of remaining in office or being removed from it and receiving compensation for his or her years of service. The employer must give three months' notice of the reduction in salary.

This form of labour break can occur as follows:

  • indirect dismissal does not require any notice. The affected employee can accept the breach of the employment relationship and is eligible for severance pay;
  • indirect untimely dismissal, which operates as a measure of wage reduction, category, etc. In this situation, the affected employee shall be entitled to receive severance payments by accepting the breach of the employment relationship.

Voluntary Dismissal

A worker has the right under the General Labour Law to resign his or her position and shall be entitled to higher or lower benefits before or after completion of five years of continuous service.

If the resignation of the worker occurred within five years of continuous service, there is no obligation to pay compensation over and above the following collateral rights, such as:

  • a Christmas bonus, equivalent to the months of work in one year, provided that the work complies with the requirements legally established as the minimum work in the respective fiscal year;
  • a bonus for annual returns, provided that the external audit report is approved by the fiscal entity in the respective fiscal year in question, attesting to the existence of actual earnings in compliance with the Law of 11 June 1947 and that the worker complied with the legally requirements (established as for the minimum time of work within the fiscal year in question);
  • vacations not taken, provided that the worker has fulfilled at least one year of continuous service and which could not be accumulated, as determined in Article 33 of Decree of the General Labour Law.

If the resignation occurred upon the completion of five years' continuous service, the worker will have the right to receive an indemnification in recognition of services that represents the payment of an average salary for every continuous year of work and additional month pro rata, if applicable.

See 6.2 Notice Periods/Severance.

See 6.2 Notice Periods/Severance.

There is specific legislation which prioritises stability for workers while avoiding, as far as possible, termination where no just cause for dismissal exists, ie, when there has been no violation of Article 16 of the General Labour Law.

See 6.2 Notice Periods/Severance.

The Political Constitution of the State, Article 49 paragraph III provides that the State shall protect labour stability. Unjustified dismissal and all forms of workplace harassment are prohibited. The law will determine the corresponding sanctions, denoting that its purpose is also to protect labour rights and guarantee job stability. However, the Comprehensive Law to Guarantee Women a Life Free of Violence No 348 defines, in its Article 7, that "labour violence" is any violent action that occurs in any field of work by any person of superior, equal or inferior hierarchy that discriminates, humiliates, threatens or intimidates women, that hinders or subordinates access to employment, permanence or promotion, and which violates the exercise of a woman's rights.

Further, regarding sexual harassment, Law No 348, called “Comprehensive Law to Guarantee Women a Life Free of Violence”, penalises persons in breach of the law, stated in Article 84, which defines such breaches as follows:

“The person who, using a hierarchical position or power of any kind, harasses, persecutes, demands, urges, threatens to cause any harm or damage, determines the obtaining of a benefit or obliges by any means to another person to maintain a relationship or performing acts or having behaviours of sexual content that otherwise would not be consented, for your benefit or from a third person, will be sanctioned with deprivation of liberty from four (4) to eight (8) years ”.

Workplace bullying must always be verifiable. Although the propagators of such behaviour use subtle tactics and are clandestine, they do not leave external traces nor do they have witnesses willing to reveal what they have witnessed. Nevertheless, the evaluation of harassment at work must be primarily objective, not merely subjective.

The first instance for labour claims is the Ministry of Labour, which is a conciliation centre and an institution of the Bolivian State that issues instructions to the employer to resolve the claim.

If the issue is not resolved by the Ministry of Labour, a judicial body shall be constituted to resolve the dispute.

Representations before the court must be made by an attorney who is experienced in labour law.

Arbitration is possible and pre-dispute arbitration agreements are enforceable.

Attorney's fees may be awarded by the judge.

CARRASCO FIRMA DE ABOGADOS

Calle 15 Nº 8054 de Calacoto
Edif. Plaza 15, Piso 6, Cf. A.
La Paz – Bolivia

+591 (2) 2795644 – 2774806

+591 2 240 9474

pacarrasco@carrasco abogados.com www.carrascoabogados.com
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Law and Practice

Author



CARRASCO FIRMA DE ABOGADOS specialises in labour law and provides support and advice in both administrative and contentious issues. In recent years, the firm has managed to expand its services in order to include corporate, commercial, civil, administrative, IP and litigation law. Personalised advice, as well as the adoption of preventive and timely legal strategies in the event of controversy, has allowed Carrasco to become one of the main law firms for companies and entities in Bolivia. The firm has offices in the cities of La Paz and Santa Cruz.

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