Cronista – In core countries more than half of SMEs will not be able to reopen, and more than 30% of medium-sized and big companies are having serious difficulties to make it through. More than 1.5 million job positions have been definitely lost, and most countries, including Argentina, have focused their efforts on discussing a labor reform during the Pandemic, universal income and financial aid for companies to survive the disaster, and in some cases, actions to protect the sources of employment.
Whereas China is starting to grow again, the US and the European Union report the biggest fall in their GDP ever.
In Argentina, lawmakers have centered on passing laws to mitigate the effects of the lockdown that have paralyzed the economy, and as a result of the Emergency Aid Program for Employment and Production the State has paid a portion of wages and extended deadlines or forgiven social security debts, and granted zero-interest rate loans as well.
The State has decided to pay universal income to the unemployed, and in
general to the most vulnerable social groups. Companies have agreed on paid suspensions under Section 223 bis (Employment Contract Act), in a context where suspension for economic reasons is forbidden under the Employment Contract Act, and employers must pay double severance pay in case of employment termination, in addition to the ban on layoffs due to lack of work or reduction in operations beyond employers’ control, for force majeure and without cause.
It is crucial to start lifting the ban on layoffs in a process of readjustment that will call for information transparence and implementation coherence.
The return to the new normal will be really traumatic and as always, there will be winners and losers.
First off, working modes have been changing, and many experts forecast that remote work will account for at least 40% of the new employment contracts, while 60% of in-person work will be dynamic depending on the circumstances.
In any case, the parties agree on flexible working arrangements based on
That is why employees should have telematic elements (digital + communication tools) to work from any physical location. The most effective tool is a Smartphone or multifunctional cellphone with such features as telephone, text messaging, WhatsApp, social media, Internet access, teleconferencing and videoconferencing.
This process will also change commuting travel habits; public transportation will be reshaped. Companies will transform their facilities with a new office layout; factories will also change their structure (as a result of the introduction of robotics and automation). All non-core services will be decentralized (security, cafeteria, shopping centers, supermarkets, health care centers, fitness centers, supplemental services, among others).
The community as a whole will adapt to these changes as reactivation gets
widespread, knowing full well that it will not reach everyone, and many
companies, activities and services will be left behind and never come back.
This is the case of stores that are waiting for customers to come and buy while e-commerce is replacing all retail stores.
In this context, companies are reformulating the employment contract, in many cases in writing, to include part-time or full-time remote work arrangements into new contractual conditions; implementing staggered paid suspension and rotating shifts to resume activities; revising working hours for in-person or remote work; eliminating time wasted in traffic or rest breaks during working hours; redefining wages to put an emphasis on results instead of available time and connection, and readjusting rest periods (in terms of working hours and compensation).
Considering that the rules for a return to the new normal have not been passed yet, the old labor laws are currently in force, providing enough protection to keep up with the times.
Collective bargaining is also a powerful tool, in particular company-wide
collective bargaining agreements, which in some cases deal with new
technologies, remote work arrangements, automation and robotics, including company reorganization due to the changes that the Covid-19 Pandemic has suddenly brought about.
To some extent, self-employment will grow in those cases where what matters most is the performance of the purpose of the contract, so the parties agree on results and payment is made if the result is successfully achieved, imposing a best-effort obligation.
The absolute power of the State cannot -and won’t be able to- replace the
creation of value in a capitalist model; on the contrary, the State only knows
about public spending and fiscal deficit as the only way to deal with the needs of the population. The states will also get hit by reality when they need to go back to pre-Pandemic standards, and such return seems impossible in the light of events. The rise in poverty will provoke a crisis in all ideological concepts, which have utterly failed so far, in particular the populistic solutions that have had devastating social and economic effects.
This is what the so-called povertism or neo-povertism is causing: merit is no
longer relevant, men and women do not compete or struggle to get better and better because everyone has the right to work, land and housing, and
everything tends to lower the bar, and not to improve results or attain greater productivity or competitiveness.
In a world where rules are changing, those who need to change first are the
participants of the process of change, and this is the case of companies, which in a new context can only survive and start to grow again if they manage to interpret exponential technologies and identify the new forms of services that customers are demanding.