Legal Battle Continues Over Reversal of Labor Reform Law in Puerto Rico

One year after Governor Pedro Pierluisi signed into law a measure that expanded and restored rights to private sector employees who were affected by the labor reform, the legal battle continues in the courts to reverse the federal judge’s annulment decision Laura Taylor Swain.

The case is before the US Court of Appeals for the First Circuit in Boston, where an oral hearing was recently held as part of the lawsuit. The House of Representatives maintains that the annulment of Law 41-2022 put private workers in extreme vulnerability.

In an interview with The Spokesman, the president of the Chamber, Rafael “Tatito” Hernández, indicated that this legislative body will go to the end of the judicial process and that it will come to the aid of the federal Supreme Court, if necessary, so that the case where the Board has prevailed is addressed. of Fiscal Control.

“We are going to fight this until the end. No matter what happens in Boston, we’re going to appeal to the US Supreme Court. We are going to fight this law until the end because no one has been able to economically raise (with evidence) the negative effect that this can have,” said Hernández.

Chamber Argues Economic Impact

He added that in the oral hearing held in Boston, the legal representation of the Chamber argued “from the economic point of view” the impact of the measure. He stated that this lawsuit is important because it would lay the foundations for the fiscal impact analysis that must be submitted on the measures.

Precisely, the Legislature is already operating the Budget Office of the Legislative Assembly (OPAL), which has the primary function of certifying the fiscal impact of legislative measures and ensuring that each legislation is adjusted to the economic reality of the government.

“In our projections, (Law 41) would have a positive impact, over $10 million, from the point of view of the effect that this has on workers, with greater economic activity, which is what we are all looking for, which there is a healthy and balanced economy,” he said.

Restored Rights for Private Sector Employees

Law 41 decreased the probationary period and reestablished protections against unfair dismissal. It also increased the accrual of vacation leave and extended said benefit to part-time employees.

Currently, in the House of Representatives, there is a measure filed by the delegation of the Popular Democratic Party (PPD) with the same language that was included in the annulled Law 41. The House Project 1651 has not been attended to pending the judicial process takes place in the federal sphere.

Call for Action

Along these lines, the president of the Chamber’s Labor Affairs Committee, Domingo Torres, indicated that “attend to the project, pass it through the Chamber and the Senate, which would be a type of discharge… and that the governor does not do his part, It would be an exercise in futility, it would be giving the working class half hope.”

Torres opined to The Spokesman that the fiscal board and Swain exceeded their powers because this legislation has nothing to do with public service. “This does not mean that economic development stops, on the contrary, you have private employees with benefits that already existed,” he added.

“Here nothing is being included in that legislation that did not exist. What we were here was returning (the rights) that they had lost with the so-called labor reform that was approved by the PNP (New Progressive Party) Legislature and signed by Ricardo Rosselló at the request of the board,” he added.

Torres stressed that in the historic situation that Puerto Rico is experiencing, where there is a need for employees and it is urgent that the Puerto Ricans who left the Island return, it is necessary that more legislation like this one be approved, which he considers would even help to stop the exodus of professionals.

The Announcement of the Law

On June 20, 2022, the Governor announced through a televised message that he had signed into law House Bill 1244, which amended Law 4-2017 on Labor Transformation and Flexibility, and rejected the board’s proposals that he would have an adverse effect on the economy.

“I announce that I have decided to sign the labor reform bill that increases rest time, fringe benefits, and employment protections for workers in the private sector of Puerto Rico,” Pierluisi said at the time, noting that the law made it safer to enter the workforce.

However, the board went to the federal Court to stop the entry into force of the legislation, an objective that it achieved on March 3, when Swain declared the labor reform null and void, based on the fact that the government did not provide the impact that the Law would have. 41.

“Law 41, and the actions that have been taken to implement it, are null and void ab initio. In addition, the Court prohibits and permanently orders the governor or others who are in concert or active participation with the governor from taking actions to assist private parties to implement or enforce Law 41,” the judge determined.

Yesterday, the press secretary of La Fortaleza, Sheila Angleró, indicated that, after Swain’s decision, the government, through the Financial Advisory Authority and Fiscal Agency (FAAF), also appealed the decision because, as the governor has said, the law would not have an adverse effect on the economy.

“As a matter of fact, the number of people employed continued to increase while Law 41-2022 was in force. However, Governor Pierluisi has taken specific actions such as approving the increase in the minimum wage, which this coming July will rise to $9.50 an hour,” Angleró added.

He also mentioned that the Department of Labor and Human Resources (DTRH) is immersed in offering training and orientation workshops to employees and employers and trying to insert more people into the workforce. He recalled that unemployment is at 6.1%, one of the lowest rates.

“We must remember that unemployment is at 6.1%, one of the lowest rates in history, and labor participation and the total number of people employed are at their highest levels for more than a decade, which is one of the indicators that our economy is growing,” he concluded.

When the law was challenged, on September 1, 2022, the fiscal board indicated that an economic analysis carried out by the entity concluded that Law 41 will have a negative effect on the labor market of Puerto Rico and on its economy in general, which will lead to fewer jobs and more emigration.

“The law would make Puerto Rico less competitive in the US and world markets,” the entity’s statement added.