U.S. Concerned About Guatemala’s Labor Law Enforcement


By Roy Maurer October 30, 2013

Guatemalan officials have six months to implement a labor enforcement plan to safeguard workers, but the U.S. is concerned they won’t make the deadline.

In a news release, U.S. Trade Representative Michael Froman said there were “serious concerns” about the enforcement of Guatemala’s laws protecting workers’ rights. While recognizing the important steps Guatemala has taken under the plan, Froman also said the United States expects the nation to make solid progress toward fully implementing the commitments. If Guatemala fails to comply with the plan’s provisions, the U.S. government retains the right to reactivate an arbitration panel established in a 2011 labor-enforcement case brought under the Dominican Republic-Central America-United States Free Trade Agreement.

A First in International Labor Enforcement

The United States and Guatemala signed the 18-point enforcement plan April 26, 2013, in response to the first-ever labor-enforcement case the U.S. has brought to a dispute settlement under a trade agreement. The AFL-CIO and six Guatemalan labor unions brought the case against the government, charging it with failing to effectively enforce its laws on the rights to associate, organize and bargain collectively; failing to enforce laws relating to nonpayment of severance and social security benefits; and failing to enforce laws prohibiting acts of violence against trade unionists, including two instances of murder.

To date, Guatemala has taken the following actions under the plan:

  • Issued a directive to the national police to ensure that police assist labor inspectors in gaining access to worksites.
  • Hired 100 new labor inspectors.
  • Submitted draft legislation to Congress that would give the Labor Ministry the authority to issue fine recommendations and would establish an expedited process for the judiciary to adopt fine recommendations.
  • Required the Labor Ministry to conduct annual inspections of all organizations receiving tax benefits under special provisions of Guatemalan law.
  • Established a public-comment process as part of its benefits-application review and procedures to reject new applications for benefits from companies that have violated labor laws.
  • Set up a streamlined process to revoke tax benefits of existing beneficiaries that violate labor laws.
  • Established standardized procedures and criteria for verifying employer compliance with labor court orders.
  • Issued an accord requiring the Labor Ministry to intervene upon learning of a potential business closure and to take the necessary steps to obtain payment for workers if the enterprise closes, including by petitioning relevant labor courts to embargo or seize assets.
  • Issued an accord to establish a response team that will attempt to prevent the closures of export enterprises that receive tax benefits and to ensure that workers are paid if such a business must close.

Froman noted particular areas that require additional and prompt action by the Guatemalan government:

  • To pass legislation providing for an expedited process to sanction employers that violate labor laws.
  • To implement a contingency mechanism to secure payment for employees of export enterprises that have closed.

“Serious efforts are also needed to ensure that the instruments and procedures issued under the plan are effectively implemented and enforced,” Froman said. “If at any time during the next six months the U.S. government determines that Guatemala is not effectively implementing the enforcement plan, it can request that the [arbitration] panel resume its work.”

Roy Maurer is an online editor/manager for SHRM.

Follow him at @SHRMRoy

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