Convergencia Research, Consultoría especializada en Latinoamérica y Caribe
Wednesday, September 09, 2020

Teleworking to have a troubled future

Beyond the fact that the discussion on regulation did nothing more than reissue classic and basic disputes between businessmen and unions, questions are being raised for the IT sector due to the limits on hiring and the lack of tools to stop the flight of talent abroad.  

The wave of questions and resistance to the new telework law augurs a future of conflict, first in its regulation and then in its application. It cannot be said that the business lobby has not had any results in Congress, despite the fact that the ruling party managed to approve without changes the project that it had already negotiated with the opposition in the House. The participation of the Unión Industrial Argentina (UIA) (Argentine Industrial Union), the Cámara Argentina de Comercio (CAC) (Argentine Chamber of Commerce), the Confederación Argentina de la Mediana Empresa (CAME) (Argentine Confederation of Medium Enterprises) and the Asamblea de Pequeños y Medianos Empresarios (APYME) (Assembly of Small and Medium-sized Entrepreneurs) in the last meeting of the Labor and Social Welfare Committee before the project passed to the upper house obtained some advantages: the rule will come into effect only three months after the end of the Aislamiento Social, Preventivo y Obligatorio (ASPO) (Social, Preventive and Obligatory Isolation), so it avoided paying the economic costs of teleworking during the quarantine, where the modality was shot.

For the UIA, teleworking in its affiliates went from 8% to 10% of the total and is expected to reach 30%, in line with the estimates of the Cippec report "Evaluating the opportunities and limits of teleworking in Argentina in times of Covid-19". According to CIPEC, up to 29% of jobs can be done from home, that is, around 3.3 million jobs out of the total 11 million registered by INDEC's Permanent Household Survey.

However, the reality is uneven. According to the Pyme Observatory Foundation, Service companies are in a better situation than the rest of the sectors when it comes to incorporating teleworking and they also show a greater immediate capacity to adopt this system for their personnel; the AMBA and Centro regions (the rest of Buenos Aires, Santa Fe, Córdoba and Entre Ríos) make up the territories best prepared for the implementation of teleworking; and companies with less than 50 employees face serious technological, organizational and economic problems that make it difficult for them to adopt teleworking.

Most of the criticism from the business sector (backed by the opposition bloc Juntos por el Cambio) condensed old claims in a neoliberal key on labor legislation in general about an alleged excessive regulatory burden that would discourage the promotion of teleworking in the country and the creation of new positions. In contrast, union representatives questioned the law for having legislative technique problems, inaccuracies that will generate greater labor flexibility and advances that are in reality conditioned to subsequent collective bargaining.

The counterpoint is interesting, for example, with respect to the interpretations around the article on “reversibility”, that is, the right that people who are working in teleworking mode have to return to fulfill their task in person. For the employer sector, the unilateral decision to revoke teleworking can discourage companies that want to reduce costs by reducing their physical spaces. On the contrary, for unions, as it is a right recognized individually, it is practically impossible to exercise it in practice given the disparity in the power relationship between workers and employers at the individual level.

Deterritorialization. But the limitations of reversibility seem to be a key issue for several ICT areas. The Cámara Argentina de Centros de Contacto (CACC) (Argentine Chamber of Contact Centers) directly demanded that President Alberto Fernández veto the law, arguing that teleworking is already regulated by the Collective Labor Agreement 688/14 in agreement with the unions and with the participation of the Ministry of Labor, Employment and Social Security of the Nation and of the Superintendence of Labor Risks.

For the CAAC, the new law is not only more rigid, but it is also in contradiction with what was agreed between the unions and companies in the sector regarding teleworking and that it reaches 85% of its 50,000 employees in 11 provinces. According to the chamber, the only limitation it finds to expand teleworking is not attributable to the sector but corresponds to the scarce or null connectivity in different parts of the country, something that the CIPPEC report also highlights as a limitation (See box) and the regulations on reversibility would prevent the contracting of resources from other provinces in practice.

The Cámara de la Industria Argentina de Software (CESSI) (Argentine Software Industry Chamber) argues that the law will lose opportunities for inclusion and federal development, in addition to negatively impacting tax collection. According to the chamber, as a consequence of the new law, regulation, at CESSI we believe that there will be a large number of highly qualified professionals who would choose to work for foreign or multinational companies that are not installed in Argentina, discouraging local productive development.

For CESSI, this flight of talent will have a direct impact on public collection, since for every 10,000 programmers who stop working for Argentine companies and do so abroad, the State would lose $12.280 billion in revenues per year. (See Box 2). Sergio Candelo, president of CESSI, estimated that this loss will affect the industry's goals of going from 110,000 jobs in December 2019 to 500,000 in 2030, raising Argentine software exports from the current US$2 billion a year to US$10,000 billion annually in the next ten years.

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