Defense and guarantee of employees´ individual and collective rights

Boletín laboral de CorralRosales - Foto edificio con cristalera

By  Official Supplement  Gazette No. 252 of February 1, 2023, it was published the Organic Reformatory Law to several Laws for the Defense and Guarantee of the Individual and Collective Rights of Employees  which amends some articles of the Labor Code, in the following terms:

1.    Numeral 25 of Article 42 of the Code was amended as follows:
In the case of replacements, when the replacing employee returns to his job, he shall return with the same remuneration he received and to the same occupation he performed. This return to the initial working conditions, shall not be considered a reduction in remuneration nor a change of occupation without consent.

2.    Article 57 of the Code was amended as follows:
By agreement of the parties the ordinary working day must be split in two parts. The resting time in-between workdays should be of minimum thirty (30) minutes and maximum of two (2) hours.

3.    Article 58 of the Code incorporates the power of the judicial authority to determine the legality of trust functions without the need of a petition by the employee. This implies that in a lawsuit in which the former employee claims the payment of not paid supplementary hours, the judge will have to decide whether or not said employee held trust functions and the corresponding consequences.

Edmundo Ramos

Specialist in Labor Law
Edmundo Ramos, partner at CorralRosales
eramos@corralrosales.com
+593 2 2544144

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NOTE: The above text has been prepared for informational purposes. CorralRosales is not liable for any loss or damage incurred as a result of acting or failing to act on the basis of the information contained in this document. Any additional determined situation requires the specific opinion and concept of the firm in Quito / Guayaquil, Ecuador.

CORRALROSALES

Law to promote the violet economy

Boletín laboral de CorralRosales - Foto edificio con cristalera

Below, a summary of the most important matters regulated in the Law to Promote the Violet Economy enacted by the Official Gazette Supplement 234 dated January 20, 2023.

1.    LABOR Aspects:

–    The working week for women may be freely distributed in 5 days, without exceeding 40 hours a week or more than 10 hours a day.

–    Companies with 25 or more employees must promote plans and working conditions that prevent sexual harassment in the workplace.

–    Companies with 50 or more employees must prepare and implement a plan for equal treatment, equal opportunities, and non-discrimination in the workplace. This equality plan must be registered with the Ministry of Labor. Equality plans must be submitted to the Ministry of Labor after 1 year, i.e., January 20, 2024.

–    The Ministry of Labor will award a badge to the companies that demonstrate:

i.    Balance in all jobs between women and men.
ii.    Adoption of the equality plan.
iii.    Issuance of non-sexist advertising of the company’s products or services.
iv.    Other measures aimed at achieving gender equality.

–    The breastfeeding period was modified and will last 12 months from the delivery date.

–    The working day of the nursing mother will last 6 hours according to the worker’s needs.

–    The 12 weeks paid maternity leave may be used exclusively by the mother, or shared with the father, up to 75% of the period. The modality will be determined by mutual agreement between the father and the mother, must be notified to the employer prior to the beginning of the leave and cannot be modified.

–    The percentage of insertion of interns will include students in dual training. If female individuals are included in this modality, the percentage of inclusion of interns may be increased by an additional 0.5 percentage points.

2.    TAX Aspects:

As a tax benefit, the taxpayers will be able to deduct up to an additional 140% of the remunerations and social benefits paid for the creation of new jobs for female workers, according to their time of permanence:


If the employment relationship is terminated, the benefit may continue to apply if the job vacancy is filled by another female worker under the same salary and contractual conditions.

The benefit may be applied up to 3 fiscal years if the number of new job openings for women exceeds the following percentages:

The benefit may not be accumulated with other additional deductions granted for the increase of employment contemplated in article 10 numeral 9 of the Internal Tax Regime Law.
3.    CORPORATE Aspects:

It is established that all entities subject to the Companies Law must integrate to their boards at least one woman for every three members of such corporate bodies.

Edmundo Ramos

Specialist in Labor Law
Edmundo Ramos, partner at CorralRosales
eramos@corralrosales.com
+593 2 2544144

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NOTE: The above text has been prepared for informational purposes. CorralRosales is not liable for any loss or damage incurred as a result of acting or failing to act on the basis of the information contained in this document. Any additional determined situation requires the specific opinion and concept of the firm in Quito / Guayaquil, Ecuador.

CORRALROSALES

Ecuador: unfair competition will not be tolerated

Recorte del artículo de Francisco Gallegos, de CorralRosales, publicado en International Trademark Association

DETAILS

DATE: 24-02-2023

PROFESSIONALS INVOLVED IN THE ARTICLE:

Francisco Gallegos

It is no secret that, in recent years, trademark infringement in Ecuador has intensified through bad faith trademark applications and registrations filed by third parties and counterfeiters. What is the reason for this increase? Our partner Francisco Gallegos explains in a new article written for the International Trademark Association (INTA) that it may be due to the fact that there is now a greater awareness of well-known trademarks in the market, especially with regard to foreign trademarks.

Francisco Gallegos explains in his article that in Ecuador unfair competition will no longer be tolerated and will be punished. To this end, he analyzes a specific case: on August 3rd of last year, “an appeal (file number OCDI-2019-055-AN), filed by Baldoré Cía. Ltda, the National Service of Intellectual Rights (SENADI), issued a groundbreaking pioneer decision by determining that the trademark DON CASTELÓ SPECIAL and the design granted in favor of Coello & Coello Coelcem Cía. Ltda. were null and void for having been obtained to perpetuate, facilitate, or consolidate an act of unfair competition, taking advantage of the prestige and position achieved by the legitimate owner”. It also adds that there were “reasonable grounds” to establish that this registration contravened the Common Regime on Intellectual Property of the Andean Community (Decision 486), as well as the principles of legal competition and good faith.

Baldoré Cía. Ltda. had not registered its trademark DON CASTELÓ in Ecuador; however, it did provide evidence of marketing authorizations and invoices that demonstrate the availability of DON CASTELÓ products in that market, as well as the sales made, and the market positioning achieved.

“Based on this evidence, SENADI concluded that the disputed registration constituted an act of unfair competition and that the improperly granted registration influenced the market by intentionally confusing the consuming public about the origin of the product, and harmed the true owner of the trademark,” Francisco explains.

It is important to keep in mind that, according to article 259 of Decision 486 of the Common Regime on Intellectual Property of the Andean Community, “any act that could create confusion among consumers in the market would be considered an act of unfair competition”. Therefore, since both parties are in direct competition, it would be a mistake to maintain the registration of the trademark since this would create confusion amongst consumers.

The author of the text concludes with the following perspective: “This decision is groundbreaking, as SENADI rarely deals with unfair competition issues and in limited cases has protected unregistered trademarks, as in this case (Ecuador has a first-filing jurisdiction). As one of the first decisions in Ecuador to address the issue and punish a bad-faith registration, SENADI sets an important precedent for trademark protection”.

If you want to read the full article, click here.

Operation of economic concentration in the pharmaceutical market is denied by the Superintendence for the Control of Market Power – LIR

Recorte de "The Legal Industry Reviews", el artículo escrito por Christian Razza

DETAILS

DATE: 23-02-2023

PROFESSIONALS INVOLVED IN THE ARTICLE:

Christian Razza

On August 9, 2022, the acquisition of Leterago del Ecuador S.A. (hereinafter, Leterago) was denied to Distribuidora Farmacéutica Ecuatoriana DIFARE S.A. (hereinafter, Difare) by the Superintendencia de Control del Poder de Mercado (SCPM). Our associate, Christian Razza, writes about it for The Legal Industry Reviews (LIR).

To understand the current situation, one must also know the context: Difare is an Ecuadorian company dedicated to the distribution and commercialization of pharmaceutical products that manages the Pharmacys pharmacy chains and the Cruz Azul and Comunitarias franchise systems. Leterago, on the other hand, is a national company that primarily markets and distributes all types of pharmaceutical products.

Razza, in order to explain why the operation was denied, states that “the economic concentration operation was denied by the authority when considering that it generates multiple risks for the competitive scheme of the following relevant markets: distribution of pharmaceutical products at national level and commercialization of pharmaceutical products at local level”.

The Superintendence for the Control of Market Power carried out an investigation in which it was determined that there were high levels of concentration resulting from the operation. This produced a joint share of more than 60% within the pharmaceutical distribution market, “due to the fact that the transaction involves the concentration of the two main distributors of pharmaceutical products in Ecuador, eliminating the independence of Difare’s main competitor”, he adds.

After the study, the authority determined that “there are no behavioral or structural measures that would mitigate the reduction of the competition schemes of the defined markets, without sacrificing the current efficiency levels of the sector, as well as the welfare of the clients of the operators involved”. It also adds that “the measures proposed by Difare did not solve the risks identified by the SCPM, since they would not have modified the structure of the market, nor the behavior of the participants to generate or make viable a dynamic competitive environment”.

This operation is not the first to be denied by the SCPM. It is the fourth economic concentration operation denied throughout its history, the three previous ones being: the merger between Holcim Ltd. and Lafarge S.A. (2014), the acquisition of Swissgas del Ecuador S.A. by Indura Ecuador S.A. (2014) and the acquisition of International Laboratories Services Interlab S.A. by Synlab Sociedad Anónima.

Razza, to conclude the article, also focuses on detailing how the first three cases were denied:

“The first case was denied since the merger between Lafarge and Holcim would result in a concentration in the Ecuadorian cement market with more than 95% share by the merged entity, thus there would be a serious risk of anticompetitive practices.

The second case was rejected on the basis of a highly concentrated market and regulators’ concerns about the potential for collusion.

The third case was denied since the parties opted not to proceed with the transaction, for which the withdrawal of the notification was requested, but the SCPM considered that Synlab failed to comply with the condition of subscribing a document of commitments within the 90-day term determined in the resolution of January 7, 2021 and therefore denied the authorization of the economic concentration operation”.

If you want to read the full article, click here.

Suspension of working day on Monday, February 06, 2023

Edificio de cristal con el logo de CorralRosales

On January 27, 2023, by means of Executive Decree No. 655 (hereinafter the “Decree”), the President of the Republic, Guillermo Lasso, accepted the request of the National Electoral Council (CNE) to suspend the working day on Monday, February 6, alluding to the 2023 sectional elections, in the following terms:

•    The President of the Republic, Guillermo Lasso, suspended the regular working day on Monday, February 06, 2023, for the public and private sector. The decision responds to the request sent by the National Electoral Council (CNE).
•    According to the presidential disposition, the suspended working day will be recovered, in the public sector through an additional hour during the following eight working days. While in the private sector, the recovery will be established by mutual agreement between employers and workers.
•    Likewise, for Monday, February 6, the provision of basic public health services, firefighters, airports, air, land, maritime and river terminals, and banking services must be guaranteed. Therefore, the competent authorities must have the minimum personnel available to serve the public.

Edmundo Ramos

Specialist in Labor Law
Edmundo Ramos, partner at CorralRosales
eramos@corralrosales.com
+593 2 2544144

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NOTE: The above text has been prepared for informational purposes. CorralRosales is not liable for any loss or damage incurred as a result of acting or failing to act on the basis of the information contained in this document. Any additional determined situation requires the specific opinion and concept of the firm in Quito / Guayaquil, Ecuador.

CORRALROSALES