Legal Update: Companies under the free zone regime – Tripartite Agreement.

Apr 1, 2020 | English Blog

In Nicaragua, Article 100 of the Labor Code, establishes that every employer has the obligation to adopt necessary and adequate preventive measures to effectively protect the life and health of their workers, conditioning the physical facilities and providing the necessary work equipment in order to reduce and eliminate risks in workplaces, without prejudice to the regulations that may be issued by the Labor Ministry. In this regard a Tripartite Commission had met on March 23,2020 and it was composed of representatives of the workers of companies under the free zone tax regime, representatives of the employers of companies under the free zone tax regime, the Labor Ministry and the National Free Zone Commission, the latter representing the State of Nicaragua.

This commission met with the purpose of determining the measures to be followed by the companies under the free zone regime in labor matters, in regard with the COVID-19 pandemic and the following was agreed:

1- Recommend to all companies under the free zone regime the adoption of the necessary and urgent sanitary measures issued by the authorities of the Ministry of Health and those that the companies establish in addition to protect the health of their workers in regard with the COVID- 19  pandemic caused by the coronavirus.

2- In order to avoid the spread of contagions among workers or as a consequence of reductions in production orders by brands or by lack of raw materials, the companies may adopt any of the following measures:

– Grant work permits with percentage wages.

– Grant advance payment of vacation.

– Reduce working hours (reducing the number of days or daily working hours).

– Carry out remote work or teleworking activities through interconnected communication networks.

– Perform temporary suspensions of employment contract under article 38 of the Labor Code.

  1. Use any other good practice that the company deems appropriate, as long as the workers agree, such as; advance of seniority, food packages and others.

3- In regard with the collective and temporary suspension of employment contracts, the parties agree to submit to the provisions of the final part of article 38 of the Labor Code

4- The applications presented by employers invoking a fortuitous event or force majeure and that entail the suspension of work, will be resolved by the Departmental Labor Inspectorates within a period of 48 hours.

5- In the case of workers over 60 years of age, pregnant women and high-risk workers with chronic diseases, any interruption of work will be paid and this agreement also establish which are the chronic diseases considered as high risk.

6- All companies under the free zone regime that adopt the teleworking or remote work may not reduce the working conditions and salary of the workers who provide their services under this modality.

7- The compliance of all these measures will be verified and supervised by the Ministry of Labor and will in force for 30 days from March 24, 2020, extendable if conditions persists.