Informe Nº: 20/07/2017
The growth of litigiousness in the labor risk system is enormous. The phenomenon is related to the lax and concessive criteria applied by courts in four provinces. These provinces generate almost 80% of the country’s total trials. The reform sanctioned by the National Congress, which already has the first adhesion through a Law issued by the Legislature of Cordoba Province, is a new attempt to solve this crucial problem.
The Law on Labor Risks (LRT for its acronym in Spanish) is a social insurance through which employers hire coverage for their workers against the contingency of labor accidents and health related issues. Its most important result is that since its birth in 1996, mortality rate due to occupational hazards fell from 16 to 5 deaths per 100 thousand workers. This reduction in accident rates means that more than 500 deaths per year were prevented. However, the number of court cases showed an exponential growth, to the point that litigation in the labor risks system is one of the main barriers to employment generation.
Even though the LRT is national, the lawsuits are presented and solved in the Provincial Courts. Accordingly, the divergence of litigiousness among provinces is an indicator of the disparity of criteria with which the Courts apply the national norm in each province. Official data provides evidence on this heterogeneity. According to information published by the Superintendency of Labor Risks (SRT for its acronym in Spanish), the number of trials per 1,000 insured workers in 2015 was of:
This data shows that litigiousness is very much concentrated in just four provinces. If they would register the same court cases rate as in the rest of the country, the total number of court cases would drop 50% in total. In other words, if the Court of Santa Fe, the City of Buenos Aires, Mendoza and Cordoba acted like the rest of the country, there would be half the number of court trials than the ones we have now. This means that 1 out of 2 labor risk court cases is spurious.
Given this reality, the National Congress issued a new reform on the LRT. The most important point is that it provides objectives and automatic rules to assess the harm done to the workers’ health and to calculate their compensation. To avoid delays and discretion it is stated that the public body responsible for the application of this rules is the Comisiones Médicas or Medical Comissions. The goal is that most of the cases are solved with an administrative procedure, reserving court intervention only for atypical controversies that deserve a more complex analysis. To highlight this administrative procedure’s legality, the norm foresees that each province must adhere to the law.
The first province to adhere to the law, through its Legislature, is Cordoba. It did so contemplating a series of facts that aim at guaranteeing objectivity, transparency and quality in the functioning of Medical Commissions, including the Province’s involvement in the management of this body.
The distortions in the labor risk system show at to what extent the malfunction of the State is very difficult to eradicate. A minority benefits from a parasitic activity, organizes itself corporately to preserve its privileges by hiding them behind supposed altruistic motivations. In contrast, the common interest appears blurred and has weak defense mechanisms. Thus, irritating injustices are tolerated, like the fact that two identical situations have different treatments according to different provinces’ courts, or that there are strong disincentives to the creation of formal employment due to the high cost of occupational risk insurance and the uncertainty generated by the exacerbation of litigiousness.
