Fake embargoes on the rise

[NewsWhore]

Latest reports in Hoy newspaper suggest that fraudulent labor cases brought to court by lawyers who convince workers that they have a case against their companies are on the rise. COPARDOM, the Dominican Republic Management Confederation, is complaining about the decline of the conciliation process in the settlement of disputes between management and labor. During 2011 there was an increase in embargoes on bank accounts and assets by lawyers who make a living by "hunting" cases in which they can sue companies. In an interview with Hoy newspaper, COPARDOM president Jaime Gonzalez said that while they do not have precise statistics on how many fraudulent cases have been filed by lawyers, they do have anecdotal evidence that an average of three cases of embargoes a week are being filed in the tourism, farming and construction sectors. These cases are also leading to growing levels of informality in business, since many entrepreneurs, fearing this sort of reckless legal action, prefer to set up businesses that do not legally exist. According to Jaime Gonzalez, this comes about because the Labor Code does not allow for direct conversations between management and labor when there is a dispute. The law requires a lawyer and a labor tribunal to be involved in the case, and this leads to these abuses, when the companies are surprised by the judicial notifications. Gonzalez called for a revision of the Labor Code, which would have a positive impact on investments in the country. He noted that the last revision of the code was made nearly 20 years ago, in 1992.

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