SAN JUAN — Last week a federal judge nullified Puerto Rico‘s Labor Reform Law approved only months ago, saying that the governor did not provide evidence that the law would not impact the oversight board’s fiscal plan.
Politicians, mostly from the opposition Popular Democratic Party (PPD), slammed Puerto Rico Gov. Pedro Pierluisi for failing to provide the proper documentation. Members of the same party then resubmitted the labor bill for a vote in the Puerto Rico House of Representations.
Federal Judge Laura Taylor Swain, chief judge of the U.S. District Court for the Southern District of New York, who oversees fiscal cases in Puerto Rico, declared the 2022 Labor Reform Act, also known as Act 41-2022, “null and void ab initio” last week. The new reform had replaced the previous Labor Transformation and Flexibility Act, passed in 2017.
Judge Swain said her decision came after the insular government did not provide impact reports for the 2022 Labor Reform Act, despite requests and orders from the Financial Oversight and Management Board for Puerto Rico (FOMBPR), a federally-appointed and imposed fiscal control board established by the 2016 Puerto Rico Oversight, Management, and Economic Stability Act (PROMESA).
“The practice of promoting laws without keeping in mind or understanding the economic consequences is the root of the fiscal crisis in Puerto Rico,” the FOMBPR said in a statement.
After Gov. Pierluisi signed the law back in June 2022, the FOMBPR —commonly known as “the Junta”— continuously alleged it would negatively impact the economy and reduce government revenues.
“The governor’s argument that the required fiscal impact assessment is impossible and his suggestion the law remain in effect while the Oversight Board and the government adopt a ‘wait-and-see approach’ to assessing its impact are well below the requirements of PROMESA, and they are useless,” wrote Judge Swain.
The Labor Reform Act sought to reinstate labor rights lost by the 2017 labor law, such as the number of work hours needed to accumulate sick and vacation leave, the amount and quantity of requisites for a Christmas bonus, and the elimination of unfair dismissal.
“The Court further permanently prohibits and enjoins the Governor or other persons who are in active concert or participation with the Governor from taking any acts to help private parties implement or enforce Act 41,” Judge Swain wrote.
Gov. Pierluisi has said he’s evaluating the possibility of appealing Judge Swain’s decision but has to wait for his lawyers’ assessment.
On Tuesday the PPD resubmitted the Labor Reform Law as House Bill 1651 (HB1651), even though Rafael “Tatito” Hernández, president of the House and a member of the PPD, said he would appeal the decision in the First Circuit Court of Appeals shortly after Judge Swain’s announcement.
José Luis Dalmau, president of the Senate and president of the PPD, said he would join the attempt put forward by House members to appeal the decision.
“This decision reveals to us what has already become a pattern of the New Progressive Party (PNP) government for years. In this decision, Judge Laura Taylor Swain indicated the Pierluisi government and AAFAF (Puerto Rico Fiscal Agency and Financial Advisory Authority) in particular, made no effort to defend Law 41-2022, and provide studies or evidence that it would not alter the government’s fiscal plan. So, beyond exchanging some communications with the Fiscal Oversight Board, the Pierluisi government and AAFAF showed they had little interest in defending a law in favor of the workers,” PPD Sen. Juan Zaragoza Gómez said in a statement.
“This decision shows that the Board is coming against the entire working class, not only public employees but also in the private sector. Our working class has to learn once and for all that the Junta and the judge are our enemies. If we allow it, they are going to dismantle Puerto Rico,” Bernabe said.
Carlos Edill Berríos Polanco is the Caribbean correspondent for Latino Rebels, based in San Juan, Puerto Rico. Twitter: @Vaquero2XL