Litigation frenzy

the local employment culture can be costly in Latin America. In a region where
up to one in five can be suing their employer, firms must tread carefully,
warns Liz Hall

Latin America, you can ask an interviewee pretty much anything and the law does
not bat an eyelid. But woe betide any employer who dismisses an employee
without cause – the law will come crashing down like the proverbial ton of

recruitment means getting to grips with the countries’ legal and cultural
similarities and differences. Miami-based Dan Ehle, American Express’ vice
president for HR in Latin America and the Caribbean, says, "I would
caution employers to invest heavily in understanding the uniqueness of Latin
American culture, both the obvious and subtle differences. Yet Western
companies often don’t pay enough attention to this, particularly from a
compliance perspective."

years ago an American Express study on employee litigation in Brazil, found
that out of 65 million workers, 13 million were suing their employer or former
employer. "It is normal for employees in Brazil to sue their organisations
as there is no social service infrastructure. If their contract has recently
been terminated or they are unhappy with existing practices, they sue,"
says Ehle.

attempting to circumvent the law in Latin America can easily become unstuck.
S‹o Paolo-based Robert Wong, president for the South American division of
search firm Korn/Ferry International, advises businesses to get a good labour
specialist and go by the book. "Companies turning a blind eye are likely
to end up paying a hefty price," he says.

it right at the hiring stage is particularly important. Apart from facing
financial penalties for making someone redundant without cause, employers are
only allowed an employee trial period of 30 days. "If you want to dismiss
an employee after that, it’s very expensive. That’s why the candidate search
and screening process is so important," says HR consultant Cristina Mejias
of CM Sociologia, based in Buenos Aires.

employers used to doing much of their recruitment over the phone or Internet,
the Latin American emphasis on face-to-face contact requires some adjustment.
"Doing things over the phone is an absolute no-no – you should interact in
person," says Mejias.

unemployment is widespread in Latin America, competition for key staff has
increased. Offering a good benefits package has become a vital recruitment
tool. When BCP Telecommunications – a joint venture between Bell South in
Atlanta and local banking organisation Safra – set up in S‹o Paolo in 1997, it
could take its pick of the best staff. Using local employment agencies, it
recruited around 2,000 sales and call centre staff in eight months. Its 1,000
IT, engineering and admin staff were recruited directly or through search firms
such as Korn/Ferry and Heidric &Struggle. But these days it faces hefty
competition as older industries migrate into telecommunications. "The big
game now is recruiting and retaining. We have to provide a good benefits
package and hiring or retention bonuses for the better jobs," says Phil
Dwyer, executive director of HR for the telecoms company.

benefits tend to be measly in Latin America and the employer is expected to
make up for this. But there are strong cultural differences for the benefits
preferred. "In Mexico, people appreciate the benefit of a driver; in
Brazil, it’s first-class flights; in Chile, a club and private school for the
kids; in Argentina, a luxury car," says Mejias.

recruitment has been slow to kick off, but the age of the Net is dawning. Sites
such as and – a Spanish-owned portal – are coming into
their own. BCP Telecommunications introduced an e-recruitment policy in
February, and American Express plans to extend some of its US e-recruitment
processes to Latin America, with on-line recruitment up and running within the

considering how wide to cast the recruitment net, it is worth remembering the
region’s emphasis on family. "Latin Americans are more rooted and
family-centred than European and North Americans. They need to check with the
mother-in-law and the kids before deciding on a job location," says Wong.
Some employers have anti-nepotism policies, but Mejias says that while in
Bolivia, Paraguay and Ecuador nepotism is still an issue, it is no longer so in
countries such as Argentina, Brazil and Chile.


Comments are closed.