Labor Guide

Labor GuideInvestor Guide

October 2019

Index

Introduction» 1. Labor relations

1.1 Relationship between employees and companies1.2 Business chambers1.3 Trade unions1.4 Council of Wages

» 2. Social protection 2.1 Employment Promotion Act 2.2 Social Security 2.3 General aspects Health Systems

» 3. Employment Contracts 3.1 Recruitment of young people, internships and scholarships 3.2 Recruitment of university professionals 3.3 Outsourced work 3.4 Migrant Labor 3.5 Hiring of foreign labor in Free Trade Zones

» 4. Wages4.1 Methods of payment of salary 4.2 Wage protection 4.3 Wage-setting forms 4.4 National minimum wage 4.5 Complementary Annual Salary 4.6 Vacation wage

» 5. Working day 5.1 Working day 5.2 Overtime5.3 Rest5.4 Night shifts 5.5 Holidays

» 6. Legal Leave 6.1 Holiday leave 6.2 Special time off 6.3 Maternity and Paternity Leave 6.4 Special Adoption Licence and Adoptive legitimisation 6.5 Time off for PAP or Mammography 6.6 Union leave

» 7. Dismissals7.1 Compensation7.2 Special dismissals

DISCLAIMER/WARNING : This guide establishes the legally established parameters. However, given the collective bargaining regime in force in the country, each sector of activity may have, and in most cases has, more favorable conditions than those referred to in this guide.

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INTRODUCTION

The country has a very long history of collective bargaining, the first rules establishing negotiation date back to 1943. More than a decade ago, Uruguay began to develop a new system of labor relations. It has been highlighted and referred to as an example by the International Labor Organization. A broad freedom of association is recognized, enshrined in the Constitution and regulated by law.

With respect to the regulation of the individual labor relationship, it should be noted that in Uruguay the written labor contract is not mandatory, although it is a practice that has spread in recent years there is no rule that establishes it as mandatory. An agreement between the parties is sufficient to initiate an employment relationship. With respect to wages, there are various mechanisms for setting them: individual negotiation with each worker in their work contract, bipartite negotiation with the signing of collective agreements between the company and trade unions, or tripartite negotiation in which the government participates with workers and employers in setting minimum wages by category and half-yearly readjustments through the Wage Councils (tripartite bodies made up of delegates from the State, workers and employers). In all cases, the award established for the category within the corresponding activity group must be complied with.

Workers’ rights include, but are not limited to, limitations on working hours, leave, supplementary wages and severance pay. Workers must also be compulsorily affiliated to the social security and health system, which covers the risks of disability, old age, retirement, sickness, occupational accidents, maternity, unemployment and death.

LABOR RELATIONS

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1.1 Relationship between employees and companies

Labor relations at the individual level are regulated by detailed legislation, which establishes insurmountable and inalienable minimums that guarantee a protective floor. These floors can be improved (and generally are) through collective agreements within the framework of the current collective bargaining system.

1.2 Business Chambers

The business chambers bring together businessmen linked to different economic activities with the aim of defending their interests and needs. There are several chambers, associations and business guilds at sectorial level depending on the activity developed by the company.

Since mid 2016, the Confederation of Business Chambers1 brings together the various existing groups in Uruguay in order to ensure the cross-cutting interests of the organizations that comprise it.

1.3 Trade Unions

Collective relations are regulated within a Labor Relations System, and under the protection of express constitutional provisions. Trade unions have a long history in the country, and have collective bargaining as an established practice. There is only one union organization, the Plenario Intersindical de Trabajadores-Central Nacional de Trabajadores, which brings together all the country’s federations and unions and has consolidated itself as the most representative workers’ organization2.The trade union movement is made up of grassroots organizations and by sector of activity, and the affiliation of employees to the union is voluntary. Within the framework of collective bargaining, wage agreements are made between employers and unions in which not only wages are agreed but also other aspects such as working conditions, additional benefits, etc. The Ministry of Labor and Social Security3 plays an important role as mediator in labor disputes. It should be noted that the above agreements have an effect on all workers, whether or not they are union members.

1.4 Council of Wages4

The Council of Wages is a tripartite integration body (composed of representatives of employers, workers and the State), which establish minimum wages, categories and other benefits through the social dialogue mechanism. They are organized at branch level and their provisions affect all enterprises and workers in that branch. They also function as a body for conciliation and mediation of collective disputes5.

1 For further information visit: https://confederacionuy.com2 For further information visit: www.pitcnt.uy3 For further information visit: www.mtss.gub.uy4 You can find information on existing councils and resolutions adopted at: http://www.mtss.gub.uy/consejos-de-salarios5 Law No. 10.449 of November 12th, 1943

SOCIAL PROTECTION

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2.1 Employment Promotion Law6

Since January 2019, a new stimulus for the generation of employment by the incorporation into the company of workers with no work activity will apply. This incentive is materialized through a subsidy to the worker’s salary.

The subsidies are 25% over the monthly salary for hiring workers between the ages of 15 and 44, and 40% over the monthly salary for hiring workers over the age of 45, who receive a maximum base salary of 2.5 national minimum wage (SMN)7.

The subsidy may not exceed 25% of 1.5 MNCs in any case and shall be granted for 18 months.In order to benefit from this benefit, companies may not be receiving other incentives linked to the generation of employment by the public sector.

The companies that want to be users of this benefit must previously make the management of contracts through the following website: viatrabajo.mtss.gub.uy.

2.2 Social Security

1. Generalities of the Social Security System8

Social security includes cash benefits and services. This set of measures aims to ensure protection against certain risks. The social security system covers the risks and social charges associated with invalidity, old age, retirement, sickness, accidents at work, maternity, unemployment and death. Membership is compulsory, with the exception of foreign workers working in Free Trade Zones. In addition, some foreign workers may opt out of the social security system under international treaties signed by Uruguay.

In Uruguay, Social Security is financed through contributions from workers, employers and the State. The system is currently made up of several bodies: Ministry of Labor and Social Security9, Social Security Bank10 (BPS) and Administrators of Social Security Savings Funds (AFAP). The BPS is in charge of collecting practically all the contributions made by companies and employees and of keeping up to date the labor history record of each affiliate. Specifically, the BPS is an autonomous body whose basic mission is to coordinate state social security services and organize social security.

6 Law 19.6897 Current minimum national wage January 2019 = $U 15.0008 Source BPS, for furthet information visit: link.9 For further information visit: https://www.mtss.gub.uy/10 For further information visit: https://www.bps.gub.uy/

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1.1 Retirement Contributions

» Price limit For the purposes of determining employer and employee pension contributions, there is a contribution limit for dependent and non-dependent workers incorporated into the new pension plan (AFAP).

» Contribution on Benefits of Art. 167 Law Nº 16.713 of 3/9/95The amounts corresponding to food, medical, insurance and transportation expenses are taxed only with employer’s pension contributions, at a rate of 7.5%, under certain conditions established in the regulation.

Personal Contribution(Montepio)

Employer’s contribution (From 1.7.07)

Retirement contribution (Industry and Commerce - BPS) 15% 7,5% (*)

1.2 Contributions to the National Health Fund (FONASA)11

It should be noted that the additional contribution for dependent children varies according to the worker’s remuneration; however, the contribution for the dependent spouse or cohabitant is not conditional on income.

RemunerationUp to 2,5 BPC12 Major 2,5 BPC

Basic Contribution

Additional Contribution TOTAL Basic

ContributionAdditional

Contribution TOTAL

No spouse or cohabitant

No children 3% 0% 3% 3% 1,5% 4,5%

With children 3% 0% 3% 3% 3% 6%

With spouse orcohabitant (*)

Nochildren 3% 2% 3% 3% 3,5% 6,5%

With children 3% 2% 3% 3% 5% 8%

1.3 Mutual Contribution Supplement (Employer’s Contribution)It arises from the difference between the amount of the mutual contributions for the number of beneficiary workers and the basic contribution of all dependent personnel.

CCM = (Nº of beneficiaries x Value of mutual contribution) – (3% basic personal contribution + 5% employer contribution)

1.4 Employer Contribution for Subsidized ServicesEmployers who employ workers in activities that involve health risks and have been classified as bonuses for the purposes of the retirement calculation (in age and services), must pay, if appropriate, a special contribution to their position. The rates to be applied vary between 6.9% and 27.5% depending on the activity and the computation granted, depending on the risk of life for their performance or that affectsthe physical or mental integrity of the member.

11 Source: BPS. For further information visit link.12 Equivalent to USD 295 (1USD = $35,252 – may 2019).

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1.5 Labor Reconversion Fund (FRL)13

Personal Contribution Employer’s contribution

Dependents 0,10% 0,10%

Not Dependent 0,10% ---

It does not apply to civil servants in the civil sector.

2. Pension benefits

2.1 Unemployment benefitUnemployment benefit is paid to workers who have been on a company’s payroll for at least six months in the twelve months preceding the application. The subsidy is served for a maximum of six months (due to dismissal or reduction) and four months (due to suspension), being possible the granting of extensions for reasons founded by the Executive Branch.

2.2 Common sickness benefitWorkers who for medical reasons are unable to work, whether due to illness or an accident at work, may be entitled to sickness benefit. The BPS may grant up to 1 year of coverage for the illness of a worker, with another maximum extension, or 2 years alternated within the last 4 years, for the same ailment.

3. Retirement benefits

Uruguay has a mixed regime, consisting of two contribution tranches that complement each other: the solidarity regime of the BPS with the individual savings administered by an AFAP.

» Common cause – At least 60 years of age and 30 years of work registered in the labor history are required. For women, an additional year of work is computed for each child, with a maximum of 5.

» Causal for advanced age – This causal can be accessed from the age of 65. The number of years of work required varies depending on the age of the person applying for retirement.

Age Years of work

65 2566 2367 2169 1770 15

For all cases, one additional year of work per child will be computed for women, with a maximum of 5.

13 Source BPS. For further information visit link.

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» Partial retirement by saving: It is possible to retire at 65 years of age by the AFAP bracket, and it is not necessary to have a minimum number of years contributed.

» Partial retirement: This type of retirement is compatible with the activity of the same affiliation.

In other words, those workers in Industry and Commerce, Construction, Rural or Domestic Service: who are performing tasks for a single employer and who have configured common retirement cause or due to advanced age, may continue working half of the schedule and retire receiving 50% of the passivity to which they would have been entitled.

Likewise, those retired from Industry and Commerce, Construction, Rural and Domestic Service: who carried out their last dependent activity (employee) for a single employer, have ceased or configured cause within a period of no more than three years at the time of applying for the benefit. In this last hypothesis, the current retirement will be reduced by 50% and may return to the activity as dependent on the same affiliation of its final activity, with a working day that may not exceed 50% of the usual schedule at the time of cessation.

2.3 General aspects Health Systems

The Integrated National Health System gives universal access to health coverage to all residents in the country, and it is composed of a public and a private sector. Public health services are provided by the State Health Services Administration (ASSE). Public services are complemented by Collective Medical Assistance Institutions (IAMC), which are private facilities.

Health insurance There are seven private institutions that offer health insurance, through which they provide comprehensive health care. The offer is varied, ranging from basic medical care to specialists and immediate coordination surgeries. It is regulated by the Ministry of Public Health.

EMPLOYMENT CONTRACTS

3In Uruguay, the written employment contract is not mandatory, although it is a practice that has spread in recent years. The existence of an employment rela-tionship implies a personal benefit, paid economically and that will be under subordination or dependence, available to a third party who orders, supervises and directs the activity, when it meets these characteris-tics will govern labor law.

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There are two types of employment relationship:

a) Of indefinite duration: in the event that the duration is not expressly established.b) Of temporary duration: zafrales tasks, substitutions or specific works can be made with this type of contracts, that must be made in writing and a term will be established in them.

In any of the above formats, workers may be hired on a monthly basis, as day laborers or on a piece-rate basis. When a fixed-term contract expires if you continue to provide services, the relationship could become a permanent one, i.e., an indeterminate contract. The same happens at the expiration of the term of the contract, the relationship continues as if it had been born indeterminate.

There are 3 probationary contracts legislated in Uruguay:

1. One month contract, established in the law of youth employment (Law Nº 19.133).2. Construction contract, sector with special regime3. Domestic service

Generically, the jurisprudence has admitted that dismissal within the first 90 days of work does not generate compensation to the worker subject to a trial period.The condition of employer is not personal, as a consequence of which it can be substituted by another employer without the contract being altered, for example when the company is sold to another employer.

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3.1. Recruitment of young people, internships and scholarships14

1. Recruitment of young people, internships and scholarships There are a number of instruments aimed at promoting the recruitment of young people for their first work experience or for the recruitment of graduates. In this sense, there are incentives for public and private contracting companies through subsidies, free labor intermediation service and advertising (labeling and brand diffusion).

1.1 First Work Experience (PEL)Contracts of First Work Experience may not be less than six months or exceed one year. The beneficiary may be hired under this modality only once. It includes young people between 15 and 24 years old who have not had formal work experience for more than 90 consecutive days.In this case, benefits are established as partial wage subsidies, which may reach 25% of the monthly remuneration of the worker subject to retirement contributions.

1.2 Graduate Labor Practice (PLE)The recruitment of graduates will apply to young people up to 29 years looking for their first job linked to the degree they possess. So the job should allow them to apply their theoretical knowledge for a period of between six months and a year.In this case, the subsidy will consist of 15% of the monthly payments subject to retirement contributions.For all modalities, those hired may not exceed 20% of the permanent staff in the company. If they are under 18 years of age, special protection is required “against performing any type of work that is dangerous, harmful to their health or physical, spiritual, moral or social development, prohibiting any work that does not allow them to enjoy well-being in the company of their family or those responsible or that hinders their educational training”. They must have a work permit issued by the Instituto del Niño y Adolescente del Uruguay (INAU).Limitation: Companies with fewer than 10 workers may hire a maximum of two people under this regime. This limit may be modified in the case of expanding companies or companies in the process of setting up and new jobs, with the prior authorization of the Ministry of Labor and Social Security.

1.3 Protected Youth Work (TPJ)Aimed at young people between the ages of 15 and 29 who are unemployed at the time of hiring and who are in a situation of socio-economic vulnerability. The subsidy will be up to 80% of the monthly salary if the women hired are women, and up to 60% if the men hired are men. The subsidy will be capped at two national minimum wages.

1.4 Training Practices in CompaniesThis modality is aimed at young people between the ages of 15 and 29 who are studying and who will carry out a formative practice within the framework of the educational proposal they are carrying out. This practice may not exceed 60 hours.The subsidy may be up to 50% of the remuneration, calculated on 75% of the value of the category and activity corresponding to a national minimum wage in relation to the number of hours stipulated.

1.5 Study grants Employers with workers between the ages of fifteen and twenty-nine who are pursuing curricular studies shall be entitled to the subsidy of study leave. This subsidy may be configured for up to eight days of study leave even in cases in which the right referred to in Law No. 18,458 dated January 2, 2009 does not correspond, since they are educational institutions not contemplated

14 Source: https://www.impo.com.uy/empleojuvenil/

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in said law but within the framework of Law No. 19.133.

Additionally, employers who reduce the hours of those workers between fifteen and twenty-nine years of age who are pursuing curricular studies may obtain a subsidy of 80% (eighty percent) of the value of each hour of reduced work, with a maximum of four hours in the working day. The workday resulting from the reduction in working time may not be less than four hours per day.

The subsidies will be effective through credits to cancel current obligations before the Social Security Bank (BPS), and may not exceed 100% of them.

3.2 Recruitment of university professionals

University professionals may be hired under a relationship of dependency by the company or independently, provided that certain conditions are met (Law No. 18.083 and Decree No. 241/007)15.

3.3. Outsourced work16

Law Nº 18.25117 defines three forms of corporate decentralization:

a) Labor supply companies: These companies provide personnel to meet the needs of the companies that demand this service. The law defines them as “the company that provides services consisting of employing workers in order to make them available to a third natural or legal person (user company), who determines their tasks and supervises their execution”.

b) Subcontractors: Subcontracting exists when an employer, by reason of a contractual agreement, is in charge of executing works or services at its own risk and with workers under its dependence, for a third natural or legal person, called employer or main company, when said works or services are integrated in their organization or when they form part of the normal or proper activity of the main or accessory establishment (maintenance, cleaning, security, or vigilance) whether they are carried out inside or outside it.

c) Intermediary: The employer who hires or intervenes in the hiring of workers to provide services to a third party. It does not directly deliver services and works to the public, but to another employer or principal employer.

The law provides that any employer or entrepreneur who uses subcontractors, intermediaries or suppliers of labor has the right to be informed by them about the amount and status of compliance with labor obligations, provisional and corresponding to the protection of the contingency of accidents at work and occupational diseases that correspond to them with respect to their workers.

In the event that the employer or the principal company makes effective the right to be informed, it responds subsidiarily to the obligations referred to in article 1 of Law No. 18.099 of January 21st, 2007, and if it does not do so, it will be jointly and severally liable for compliance with them.

The obligations referred to are: labor obligations, payment of social security contributions, premiums for accidents at work and occupational diseases, sanctions and recoveries owed to the State Insurance Bank.

15 For further information see: Law N° 18.083 and Decree N° 241/00716 For further information see: Law N° 18.09917 For further information see: Law N° 18.251.

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In the case of economic groups, they are considered as a single employer, so that the legal persons that comprise them are jointly and severally liable among them.

An economic group exists when there is a plurality of legal persons with certain characteristics:

a) existence of a certain organization among themb) hierarchy within the group, allowing it to be unifiedc) the presence of a mother society that controls and dominates the movement of the others that become subsidiaries

3.4. Migrant Labor

The migration regime in Uruguay contemplates different modalities to enter the country:

» temporary resident » permanent resident » non-resident

In order to be able to consider hiring a foreigner as part of an employment activity, the temporary or permanent resident status of the person hired must be met. The competent authority for the purpose of granting residence (temporary or permanent), is the National Direction of Migration (the national foreigner of Mercosur (States Parties and Associates) carries out the procedure of residence before the Ministry of Foreign Affairs).

The national legislation provides that foreign workers shall enjoy the same rights and obligations as national workers, with employers being obliged to comply with all labor and social security regulations in force, as if they were national workers.

3.5. Hiring of foreign labor in Free Trade Zones

In general terms, in Uruguay, foreign workers may be employed in all activities carried out in the national territory, with few exceptions in which there are limitations.

The law of free zones18 requires that these enclaves have a minimum of 50% of national labor in the case of companies that perform service activities, and for companies that perform other economic activities this percentage rises to 75%. It is important to mention that the Executive Branch can, and has recently done so, enable “exceptions” to this rule when it is not possible to fill jobs that require specific qualification.

18 Access to the Law: Law N° 15.921 and Decree N° 309/18.

WAGES

4A salary is defined as the remuneration fixed by an em-ployer to a worker by virtue of an employment con-tract, written or verbal, in return for his or her work in an employment relationship.

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4.1 Methods of payment of wages

Payment must be in cash, full payment in kind is prohibited. There are monthly, fortnightly and weekly payment terms. In all activities, companies are obliged to issue a payment receipt and give a copy to the worker.

Two types of remuneration can be distinguished:

a) The basic element: a fixed sum of money.

b) Marginal elements: benefits in kind or in money that are added to the basic element. Benefits in kind are sometimes imposed by law, sometimes prescribed by awards of wage councils or collective agreements or decrees fixing wages, and other times result from the terms of the contract. Example: housing, food, commissions.

On the other hand, there are different formats for setting wages:

Salary by time: the unit can be the hour, the day, the week or the month.

Salary for performance: this is a type of remuneration for work, in which a relationship is sought between the performance that has been achieved and the salary achieved. The formula that most interests private employers to stimulate individual performance according to their interest, which workers have resisted because it leads to excessive efforts and destroys solidarity among workers. This form of wage determination is based on piecework or pay per piece.

4.2 Wage protection

The salary has a special protection, therefore:

1. Payment in kind is only permitted when it is partial, requires prior authorization by law, arbitral award or collective agreement, and must be based on the custom or convenience of the worker.

2. It is obligatory that the payment of remunerations is made through electronic means, by means of accreditation in account in institutions of financial intermediation or in instrument of electronic money19.

3. When the payment is made, the worker must be given the corresponding documentation detailing exactly the items that are paid and the amount of each of them. It is possible to issue electronic receipts, which must have the same content as that issued in physical format.

4. They must be paid:a. monthly worker - within the first 5 working days and never after the first 10 runs of the following month.b. worker who is paid by the fortnight - within 5 working daysc. Weekly wage earner - at the end of the respective week

5. No sum may be deducted from wages that is not authorized by law, which must determine conditions and limits (International Labor Convention No. 95).

19 Workers providing services in rural areas and localities of less than 2,000 inhabitants that do not have cash withdrawal points that enable the withdrawal of funds in account or electronic money instruments are exempted from this obligation. In principle, these workers may continue to be paid in cash until the survey of extraction points provided for in the Act is com-pleted. In exceptional situations, the salary shall be paid at the place of work or at a nearby place, unless otherwise agreed by collective agreement.

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4.3 Forms of wage determination20

The Councils of Wages created by Law 10.449 of 12/11/1943 are bodies of a special nature, designated to understand mainly in the fixing of minimum wages for the different groups of activities. Linked to this task, they are in charge of defining categories and tasks. At the wage-setting stage, substantive conditions and formal requirements can be distinguished.

Minimum wages and special minimum readjustments shall be established for the different activity groups, and within the groups, the minimum wages for each category or job in that sector. However, this does not remove the possibility of negotiating collective wage agreements or individual agreements between the parties, always with the objective of exceeding the indicated minimum wages. It should be noted that what is established by award may never be below the amount established as the National Minimum Wage.

4.4 National Minimum Wage

The setting of the national minimum wage is carried out in accordance with International Labor Convention No. 131 of the I.T.O., decreed by the Executive Branch in consultation with social actors. It is updated periodically. Although it is set, it does not cover almost any activity, since the vast majority of sectors set their minimum wages through collective bargaining.

4.5 Complementary Annual Salary

Since 1960 every employer is obliged to pay a supplementary annual salary (SAC), that is the name given by the legislator to what in Uruguay is known as Aguinaldo, which is the amount equivalent to one twelfth of the total remuneration in money paid by the employer. The amount to be paid monthly is one-twelfth of the total wages and salaries in cash paid by the employer arising from the employment relationship that are of a remunerative nature.The same must be paid once a year, however the Executive Branch can resolve (and usually does) the payment in two stages. The first one within the month of June, for which the payment between December 1 and the previous May 31 is taken into account and the complement before December 20, taking into account the payment between June 1 and the preceding November 30.

They are excluded from the calculation basis:

1. Tips because they are not paid by the employer2. Benefits in kind3. Ratings4. Participations5. The aguinaldo itself

4.6 Vacation Salary

The premium for the best use of vacation leave or salary is regulated by Article 4 of Law 16.101 of 10/11/1989 and Regulatory Decree 615/989. It covers all workers in the private sector, including domestic and rural workers and those of non-state public persons.The minimum amount is equivalent to 100 per cent of the liquid day’s leave, which is obtained by deducting social and fiscal charges from the nominal day’s pay. It must be paid by the employer before the start of the vacation in all cases and in proportion to the duration of the vacation. This benefit is of a salary nature.

20 For more information on wage advice, see the following link

WORKING DAY

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5.1 Working day

The regulation of the duration of the working day in Uruguay is mainly delimited by our Constitution, which recognizes the right to limitation of the working day in article 54 and by Law No. 5,350 of 17/11/1915.

The law establishes a double limit for the working day:

» Weekly limit: effective work will not last more than 48 hours per week in industry or 44 hours per week in commerce. » Daily limit: effective work will not last more than 8 hours of effective work per day.

Special casesThe labor regulations in Uruguay have a general regime for industry and another for commerce, as well as special regimes for other sectors of activity. As a general criterion, workers in the industry (factory personnel), construction and transport have an eight-hour working day and 48 hours a week. In the commercial activity, the weekly work limit is reduced to 44 hours, respecting which the employer can adjust the hours of closing and opening of the establishment.For those activities considered unhealthy, the limit is 6 hours a day. Activities that have repercussions on workers’ health, or involve the use or contact with hazardous materials are considered unhealthy.

Effective workFor the purpose of establishing how to compute these periods of activity, it is important to take into account the concept of effective work that is included in the regulations, which states that effective work is to be understood as “any time that a worker or employee freely ceases to dispose of his or her will and is at the disposal of his or her employer or hierarchical superior”.As for personnel with managerial functions, effective work is computed for the time in which the regular activity is carried out by the personnel under their orders, provided that it is carried out simultaneously.

5.2 Overtime

Overtime is all those that exceed the conventional workday established by law, agreement of the parties, collective agreement, custom, etc. Overtime is regulated in our right in Law 15.99621 of 5/12/1988, regulated by the decree of the Executive Branch 550/989. The extra hour must be remunerated with a surcharge of 100% on the value corresponding to the hour of work carried out in working day or common or workable. If the extra hour is carried out on a non-working day, rest day, etc., the surcharge will be 150% on the value of the working day hour. If the extra time does not exceed 30 minutes, that time will be added, and if it exceeds 30 minutes but does not reach an hour, this time will also be added.

The overtime increases the vacation day and the complementary sums. They must also be taken into account for the calculation of severance pay.

Decree 611/980 establishes a special regime for superior personnel (employees occupying positions superior to that of Chief of Section).

21 For further information see: Law N° 15.996 and Decree N° 550/989.

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5.3 Breaks

The worker has the right to an intermediate rest during the working day and to a weekly rest.

1. Intermediate rest

The intermediate rest is the one that corresponds to enjoy during the working day and its duration can be half an hour or two and a half hours depending on the activity. As a consequence of how it is determined, we are faced with continuous or discontinuous working days.The working day is continuous when the rest is half an hour, and it is considered as worked for the purpose of generating wages. It is a paid rest.

The working day is discontinuous when the rest is 2 hours in industry and 2 hours and 30 in commerce. It can also be 1 hour in the case of both trade and industry, but it must be agreed between workers and the employer. In this case the rest time does not generate salary, it is not paid.

The intermediate rest must be enjoyed by the worker not beyond the 5th hour of work in industry and the 4th in commerce.It should be noted that there are special provisions regarding breaks during the development of the activity, taking into account the specificities of the same, for example: call center, refrigerating chambers, transport, among others. These have been established by law or collective agreement.

2. Weekly rest

Weekly rest is compulsory for all workers without exception. The duration of the weekly rest is different according to the type of activity.

Industrial activities have two rest options:

a) Sunday restb) rotary rest: you rest one day after 5 days of work.

For the commercial activities and the administrative personnel of the industry, the rest begins at noon on Saturday. This is without prejudice to the possibility that, in agreement with the workers, Saturday hours may be redistributed into the rest of the work week, provided that the daily working day does not exceed 8 hours of work per day.If the worker works on a day on which he or she is entitled to rest, Law No. 7.318 provides a choice between compensatory rest or compensation, which the worker must consent to. The compensation for working on a day off may not be less than double the salary or daily wage on a common day

5.4 Night shifts22

The law establishes two requirements for the right to compensation for night work to be generated: that the work be carried out between 10 p.m. and 6 a.m., and that it be at least for more than five continuous hours.

This standard sets minimum conditions for night work. In several sectors there are agreements on the conditions and remuneration to be received by workers for hours of night work. In this case, the regulation that is most beneficial for the worker will be applied.

22 For further information see: Law N° 19.313.

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1. Compensation or surcharge for night work

The general regulation for night work sets the “surcharge” for night work at 20% of the normal wage, which is calculated on the basic wage.

2. Hourly reduction

The compensation can be received in cash or its equivalent in hourly reduction, without loss of salary, the option is at the expense of the employer.

3. Pregnant woman or woman who has given birth

For pregnant workers or workers who have given birth, the possibility is established to request a change from night to daytime working hours without loss of compensation (to either of the two forms of compensation, 20% in cash or in hourly reduction). The only requirement is the existence of pregnancy or childbirth, and the will of the worker, so there is no provision for the employer to deny the change.

5.5 Holidays

Paid holidays are expressly determined by law. These are: January 1, May 1, July 18, August 25, and December 25. These days are paid even if you don’t work and if you work in one of them the daily wage is double.

In the case of workable or common holidays, most private activities, with the exception of some service sectors such as banking and education, usually develop their activities normally. If the worker is a day laborer, he or she will be paid the usual day’s wage if he or she works and does not receive a wage for that day if he or she does not do so. In the case of a monthly worker, he receives the common salary (without extras or discounts) whether he works or not during the common holiday.

There are activities that do not stop your work even on paid holidays, such as passenger transport.

LEGAL LEAVE

6

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6.1 Holiday leave

Workers are entitled to paid annual leave. Paid leave is calculated on the basis of continuous working days. The minimum is 20 days of leave after one year of work.

The law also provides for an increase in leave days based on seniority at the rate of 1 day for every 4 years of work, with the particularity that in order to acquire the first one, 5 years of work must have elapsed.

Workers who do not complete the year of work are entitled to leave in proportion to the time worked.

The leave for each expired year must be paid in its entirety within the following year, counted from the expiration of the last work period that generates the right to it.

The 20 days of leave must be enjoyed on a continuous basis, not including for the purpose of determining the period of holidays or Sundays.

By means of collective agreements, an exception to this regime may be agreed upon, the division of the license in two periods that may not be less than 10 days (Law Nº 13.556, article 1).The resignation of the worker to the enjoyment of the annual vacation, or his compensation in money, is null and void.

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6.2 Special time off

Special time off applies to all workers who meet established requirements and is granted in addition to annual paid leave. They cannot be substituted by salary or complementary items, they do not generate right to vacation salary, and it is possible to agree benefits that surpass the minimum established in the law.

Special leave - payment by the employer

Motive Requirements Number of days Accreditation Sanction

Studio

6 months working relationship. Certificate of registration for a course.

Minimums per year

6 days for workers up to 36 hours per week.

9 days for workers from 36 to 48 hours.

12 days for workers with 48 hours.

It is granted fractioned in periods of 3 maximum days per test or examination, including that day.

Certificate of having taken the test.

If you do not present it during one year, you will not be able to apply for the benefit.

Discount of the days as if it were absence without previous notice. In the following years you will have to prove that you have passed the exam or a course.

Paternity, adoption

and adoptive legitimation

Birth of a child, adoption or adoptive legitimation.

3 days. The day of birth plus the following 2.

Within 20 days after the fact.

Discount of the days as if it were absence without previous notice.

Marriage Get married.3 days one of them on the day of the marriage.

Notice 30 days before the marriage and within 30 days thereafter you must credit it.

Discount of the days as if it were non-attendance without prior notice.

Duel

Father, mother, adoptive parents, child, adoptive children, spouse, cohabitants and siblings.

3 working days.Within 30 days of the event you must prove it.

Discount of the days as if it were absences without previous notice.

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Allowance for inactivity of the worker due to absence - payable by the BPS

Motive Requirement Days

Paternity Birth of a child, adoption or adoptive legitimation.

10 days (in addition to the three days of employer charges)

Maternity Birth of a child.

6 weeks before the presumed date of delivery and up to 8 weeks after delivery BPS may authorize variation in the periods never less than a total period of 14 weeks.

Care leave Birth of a child.

Half working hours for the father or mother up to 6 months of the child, counted from the end of maternity leave.This benefit may be used interchangeably and alternately by the father and mother.

Adoption and adoptive legitimation

Either parent as of the child’s integration into the family, while the other will have ten working days of leave.

Leave of 6 continuous weeks and a reduction of the working day (up to half) for 6 months.

6.3 Maternal and paternal leave

During the period in which the worker is on pre- and post-natal leave, this financial allowance is paid, which covers 6 weeks before the presumed date of birth (42 days of pre-natal) up to 8 weeks after the birth (56 days postpartum).

Period of protection

» Start: 6 weeks before the expected date of delivery (42 days of prepartum). » Up to: 8 weeks after childbirth (56 days postpartum). » Premature Birth: Postpartum leave is extended to 14 weeks. » Postpartum Delay: The duration of postpartum leave will NOT be reduced. » Parental Allowance: For newborn care.

Parental Allowance for Newborn Care

Both THE FATHER and THE MOTHER may benefit from this subsidy, with the possibility of alternating its use. During the period of reduction of working hours, 50% of the subsidy to which he was entitled is paid, the payment is made month by month.This option starts from the day after the end of the Maternity Benefit and up to 6 months of age of the child.

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6.4 Special Adoption Leave and Adoptive legitimisation

Any worker dependent on the private activity who receives one or more minors will be entitled to a special leave of 6 continuous weeks (42 days). Likewise, they may enjoy the reduction of half of their working hours for a period of 6 months (Law Nº 17.292).

6.5 License by PAP or Mammography

Working women have the right to one day a year of special leave with pay in order to facilitate their attendance for Pap smears and/or mammary radiography, the performance of the examination must be accredited in a reliable manner.

6.6 Union leave

It will be subject to what is agreed in the collective bargaining of the sector.

DISMISSALS

7The employer has the right to dismiss its workers and is obliged to pay compensation. Dismissals may be di-rect, when the employer expressly or tacitly manifests its will to terminate the employment relationship, or in-direct, when the employer breaches the employment contract in such a way that the worker is considered dismissed and stops working.

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In the dismissal system this unilateral act of the employer is charged, generating the obligation to indemnify the worker according to the length of time the labor relationship has lasted23.

Those workers who have committed notorious misconduct are excluded from the right to compensation for dismissal, understanding as such the behavior of the worker, which due to the seriousness of the same makes it impossible to maintain the employment contract.

Also excluded are some forms of contracts with a term, non-permanent, transitory, etc., whose regulation is part of a whole category of atypical contracts that exceeds the possibilities of this manual.

7.1 Compensation

The rules governing the determination of the amount of severance pay (IPD) differ according to whether the workers are monthly wage earners or day laborers (Act No. 10,489 of 6/6/1944, No. 10,542 of 20/10/44 and No. 10,570 of 15/12/44).

The basis of calculation will depend on the form of hiring; the daily wage or the monthly payment. This base will be increased by all the incidences (salary benefits) that this worker has.

Determined the amount of the unit to the worker with monthly remuneration will correspond to one unit for each year or fraction of activity with a limit of 6 monthly payments.

In the case of a day laborer, the seniority for the purpose of determining the number of days that correspond to him as compensation is calculated taking into account the day of dismissal backwards, year by year, the number of days made in each of the years during the entire period in which he has worked. The maximum possible compensation in all cases is 150 days.

7.2 Special dismissals

Our legislation includes special schemes that take into account the special circumstances of workers (sickness, accidents at work and occupational disease, maternity, etc.), the amounts of which are greater than those laid down in the general scheme and are provided for in special laws to deal with such situations.

23 In the event that the dismissal is due to the worker’s union activity, pursuant to Law No. 17,940 the worker may be reinstated in the organization of the company provided that the Judicial Branch so determines in a summary proceeding.

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