TRANSITORY PROVISIONS RENDERED BY THE MINISTRY OF LABOUR, EMPLOYMENT AND SOCIAL SECURITY

Within the framework of the health emergency ordered by the Government due to the risk of expansion of the Coronavirus (COVID-19), the Ministry of Labor, Employment and Social Security (“MLESS”) has rendered some recommendations to employers and adopted exceptional and transitory containment measures, during the duration of the health emergency, which we highlight below:

(I) Granting annual leaves if fewer active personnel is needed.

Annual leaves can be granted without notifying the workers 15 (fifteen) days before the start date, according to MLESS Resolution No. 499/2020 of March 17, 2020.
The MLESS even recommended that unearned annual leaves may be paid in advance for 2020 and 2021.

(II) Advance payment of annual bonus

Another recommendation to employers is to bring forward the payment of the proportional annual bonus for the year 2020.

(III) Suspension of the employment contract

As a last measure, by Resolution No. 500/2020, the MLESS regulated the total or partial suspension of employment contracts established in the Labor Code.

This resolution provides that the suspension of labor contracts shall require prior authorization by the MLESS, and to obtain such authorization, the employer shall comply with certain requirements and submit some documents
If this alternative is chosen, the company must inform the workers or their representatives, in writing and no less than 5 (five) days in advance, the duration of the suspension of the contract.

Within the same term, the employer must communicate to the MLESS the duration and the reasons of the suspension. The following documents must be attached to the note:

(i) Company’s tax identification number,
(ii) Indication of who is the legal representative and document that certifies it,
(iii) Payroll of affected workers with their respective data,
(iv) Notifications sent to affected workers with acknowledgement of receipt,
(v) Payroll of insured persons at the Social Security Institute,

(vi) Agreement with the employees on the suspension of contracts if any; and,
(vii) Certified copy of accounting documents in order to demonstrate the solvency of the company such as (a) the balance sheet for the last 3 years, (b) the VAT statements for the last 12 months, (c) the stock book for the last 12 months and (d) the company’s economic recovery plan.

Administrative procedure without agreement between employer and worker: The MLESS will previously analyze compliance with the formal prerequisites and if no prior agreement is reached between the employer and worker regarding the suspension of the contract, it will give the worker an opportunity to give his opinion about the measures taken by the employer.

Finally, the MLESS will analyze the reasons alleged by the employer and will render a resolution authorizing or denying the suspension of the employment contracts. This resolution can be appealed before the Minister of Labor within a maximum term of three (3) days after the resolution is notified. The duration of this process will hardly be less than 30 days.

Administrative procedures with agreement between employer and worker: An analysis is not required and the MLESS will render a resolution ordering the suspension.

Paid Suspension: In this case, no prior analysis is required and the MLESS will render a resolution ordering the suspension.

(IV) Refinancing of Employers´ Contributions
With the enactment and publication of the Emergency Law dated March 26, 2020, employer contributions may be refinanced without interest for up to 18 (eighteen) months. The Social Security Institute (“SSI”) will regulate this benefit. Workers will maintain their coverage and benefits.

(V) Extension of the Term to submit Payrolls.

By resolution Nº 526/2020 dated March 26th; the MLESS extended the term to submit payrolls until May 31st, 2020.
If you want to know more about the procedures to be carried out at MLESS, as well as the interpretation of the administrative resolutions and the legislation on this matter, please contact us.

At Vouga Abogados we will be constantly monitoring the measures that the Government adopts against the spread of the Coronavirus (COVID – 19), which will be periodically published on our website https://www.vouga.com.py/esp/novedades.php.

If you have any inquiries or do need assistance about this matter please contact with  Perla Alderete (palderete@vouga.com.py), Silvia Benítez (sbenitez@vouga.com.py) Walter D. Vera (wvera@vouga.com.py) y Daniela Leguizamón (dleguizamon@vouga.com.py)