Dante Sica on labour reform and wage negotiations

Production and Labour Minister Dante Sica also spoke of wage guidelines for 2019. He said that in a scenario of price stability he would prefer a review clause rather than automatic increases if inflation outstripped wage hikes.

Is there a wage cap [for 2019] of 23 percent?

We do not have inflation targets, basing our discussion of wage guidelines on each sector’s capacity to absorb pay increases. A trade union can always ask for, say, 45 percent but if the sector accepts this and then cannot absorb it into its profits or pricing, there will be an impact on employment.

So no cap?

Before negotiating, any business talks to the consultants or at least that was my previous experience. They look at the market expectations as compiled by the Central Bank (REM) and at the budget and on that basis decide whether to export or attend the domestic market.

Everybody will look at what suits them. And the trade union will also look at the two variables, wage and employment levels. Given price stability, we would prefer a review clause rather than automatic increases if inflation outstrips wage hikes. If you sign in January, you can insert a clause for review after six months.

Do you intend to advance with labour reform?

The labour reform issue is like a huge text without any defined content. As a society and as a government, we have to discuss questions bearing on the future of employment, industrial relations and production.

The forms of production are changing at a rapid pace in today’s world. We also face the short-term challenge of informally employed workers without social coverage.

Talks at sectorial level are a good indicator towards starting to break through the mistrust of those who believe that reforms conspire against acquired rights or those who blame norms against which they feel helpless.

But will a bill be sent to Congress?

I aim to advance with sectorial agreements. But with 30 percent of workers informally employed, I’m obviously going to try and insist on a law to legalise their situation as an issue of social justice. I cannot remain silent.

Does sending trade unionists to jail help you to advance with labour reforms to cut costs?

The key is to clean corruption out of all systems. The more transparent and stable the ground rules are, the more productivity can be improved.

“As a society we have to discuss questions of employment and production.”