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Itaú Comment On Newest Labour Reform

COLOMBIA
  • Following the labour reform failing to reach the required quorum during the first semester of the year, Colombia’s government has now submitted a renewed proposal.
  • Itaú have noted the new bill retains the core policy of reducing weekly work hours and increasing Sunday overtime pay. Moreover, the reform maintains the timing of when night-shifts begin (changing from 9pm to 7pm) and the compensation for dismissals without just cause. The central bank estimated that the rejected labour reform proposal would increase recruitment costs between 3.2%-10.7%.
  • Looking ahead, the new reform will begin its discussion in the Lower House. Itaú believe a weakened government coalition and low political capital will likely lead to a watering down of the planned structural reforms during congressional discussions.

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