Floribusiness Blogs ‘Deluxe’ Working Conditions in Ecuador

‘Deluxe’ Working Conditions in Ecuador

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The other day, I came across an article about the best countries in the world to be young, to be a woman, to be retired, etc. Our Andean country didn’t score very well, as expected. But if the question had concerned the best place in the world to be an employee, we might have been top of the list!

You wouldn’t immediately expect it from a less developed country like Ecuador, but the working conditions here are something else! Socialist parties throughout the world probably envy us. Let’s go through a few key figures: the working week consists of 40 hours in Ecuador. An employee is entitled to 15 consecutive holidays each year. Maternity leave is three months. And the minimum wage is currently set at USD 375 gross per month.

Nothing too unusual so far. But, let me go on. After a trial period of 90 days, an employee is entitled to a permanent contract by law. In addition, each employee is entitled to a 13th and a 14th month of pay and from the second year of the employment contract, even a 15th month of pay. Tax free!

And there’s more: 15% percent of the company’s profits has to be split among the employees before tax payments. And finally, when the contract is terminated, the employee can always count on a generous severance pay. Even if the employee resigned voluntarily. Isn’t that a bit odd?

The really smart people go about it differently, though. Because the best thing to do is keep your job with the same employer for as long as possible. From the sixth year of the contract, you’re gaining an extra day off per year, reaching a maximum of 15 extra holidays after the 20th year. If you stay on for 25 years, you’re entitled to early retirement. So, if you started working at age 20, you could be done when you’re 45. Now that’s something you won’t even get in Greece!

But if you lose your job here, you’re in real trouble. Because in that case, you’re no longer accruing a state pension, you’re no longer covered for health insurance and there isn’t such a thing as unemployment benefits. Even the funds accrued under an employer’s pension plan will be voided. The contrast between these two extremes is simply outrageous. But it will probably take many years before these issues are addressed.

Victor van Dijk,

Area manager South America, FleuraMetz