GUATEMALA Law and Practice Contributed by: Ignacio Andrade Aycinena, Alejandro Solares Solares, Claudia Pontaza Rubio and Lester Meda Ruano, Lex Atlas
Guatemala’s Constitution, which prohibits the existence of monopolies and privileges, and indicates that the government shall protect the market economy and impede associations that tend to limit market liberty or negatively impact consumers. Article 360 of the Commerce Code, Decree 2-70, indicates that all companies are obliged to do business with anyone that requests their prod - ucts or services, complying with the principles of equality in treatment amongst the different consumer categories. Thus, a technical ban on price discrimination activities is deemed to exist. Remedies are unclear but an affected party may sue for damages. Little or no judicial activity to that effect exists. Furthermore, the Criminal Code indicates in Arti - cle 340 that anyone that commits any acts det - rimental to the national economy by taking over the production of one or more industries, or the same commercial or agricultural activity, or who takes advantage of such activities through any privilege or using any other means, will be sanc - tioned with a prison sentence of six months to five years and a fine from GTQ500 to GTQ1,000. Only two cases have been seen regarding com - plaints filed before the authorities over the last ten years, and there are no specific results from the authority’s investigations. 2.5 Labour Law Regulations Three issues stand out regarding labour matters in M&A. • A labour contract or relationship is deemed to exist even if disguised under a professional services relationship or a services agreement. For as long as there is a personal obligation to render services, and some degree of sub - ordination and obedience to the instructions
of the other party, the relationship may be considered as labour. Payments made under such contracts would be deemed to be a sal - ary, and, based on such amounts, other fringe benefits such as severance pay, annual paid vacation, and Christmas and July bonuses do arise and remain contingent. • Issues related to the rights of employees granted under collective bargaining agree - ments, which have not been renewed due to unions that are dormant or have ceased to exist. • Issues related to payments made to employ - ees as “incentive bonuses” , which carry with them matters related to potential social security claims, claims regarding severance pay and other fringe benefits unpaid on these, which, owing to the nature of International Labour Organization (ILO) Agreement 95, are part of the employee’s salary. Labour rights (salary, benefits, bonuses, vaca - tions, unionisation, striking, etc) are considered human rights, and are recognised in the Consti - tution of the Republic of Guatemala. Also, the country is part of the ILO, and has ratified inter - national agreements that protect workers’ rights. Workers’ rights are minimum guarantees; they are enhanced by more favourable benefits and cannot be waived at a later stage. Some of the most important labour laws in Gua - temala are: • the Labour Code, which includes the rights and obligations of employers and workers, as well as processes to resolve disputes in labour matters; • the Organic Law of the Social Security Institute of Guatemala, which establishes the social security regime – Decree 295 (old age,
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