Cutting severance pay could lead to upheaval, Dominican unions warn

Santo Domingo.- Eliminating the severance pay in any reform of the Labor Code could unleash a social upheaval on rebuke by workers, Rafael (Pepe) Abreu, president of the labor unions grouped in the (CNUS) warned Thursday.

"Basically what they (employers) want is to deprive the employee of the right to accumulate seniority on merit, they want a person to spend 20 years in a company and when they leave, tell them: there’s the door for you to leave and a supposed pension they’ll receive," Abreu said.

He said an employer’s right to fire a worker without cause is the reason behind the penalty of being forced to pay the severance.

However, the president of the Employers Association (Copardom), Jaime Gonzalez, notes that the idea isnot to eliminate the workers’ advances earned, but instead to put a cap on the severance.

Time

Gonzalez said the Labor Code provides that from 1 to 5 years on the job, a worker’s severance pay is 21 days, and from 5 onwards, is 23. "We initially propose a cap on the severance, but not its elimination."

He said the reform is necessary because in his view, will help increase formal jobs.

Workload

Although Gonzalez says the country’s labor cost is around 65%, Abreu estimates that it’s not more than 16%.