Chilean labor reform threatens shake-up in copper industry

jueves 18 de febrero de 2016 09:00 GYT

By Gram Slattery

SANTIAGO Feb 18 (Reuters) - Chilean copper miners who have grown reliant on cheap outsourced workers are bringing more of them in-house or bracing for salary hikes ahead of the expected passage of a pro-worker reform bill.

The legislation, on track to be approved in March, is likely to raise labor costs and marks the latest blow to mining companies in the world's No.1 copper exporter already hit by flagging productivity and prices near six-and-a-half-year lows.

The reform is set to boost the bargaining position of unions representing outside contractors, making strikes among outsourced workers more common and difficult to break, analysts and lawyers say.

Labor activists argue the reform is needed to give workers more leverage in a country with loose collective bargaining rules, and they criticize contracting as a tool for companies to undercut bargaining rights and offer substandard pay.

Companies counter that the reform will stunt growth, and say that outsourcing is vital for increasing efficiency and offering the flexibility needed to weather the volatile copper market.

Now, however, those firms are making adjustments: some are bringing contracted workers in-house to better paid positions, so as to avoid potential labor disputes. Others are preparing to pay significantly more for the same outsourced services they have used on the cheap for decades.

"There are a lot of studies being done (by mining companies), looking at how many workers can be brought in, at what mines, in which processes," said Felipe Saez, an advisor to heavy industry group Sofofa, which represents Chilean mining among other sectors.

Outsourcing has increased in Chile over the past two decades. Seventy-four percent of workers at Chile's "large" copper miners, which account for well over 90 percent of output, were contracted out as of 2014, according to government statistics. That compares with 69 percent in 2013, and 66 percent in 2006.   Continuación...