An executive decree issued in early 1994 by President Sixto Duran Ballen eliminated the system of political pricing. That is, at present, practically all goods and services, including many provided by the State itself , for example, fuel prices are set according to market forces, in the free play of supply and demand. All subsidies for industrial and agricultural products and services have been swept away.
The objective of this policy is clear: to stimulate domestic production and develop a more competitive market through free pricing. This mechanism will also be useful for improving systems to redistribute resources, without the previous distortions caused, basically, by the government sector.
Ecuador has a great capacity to supply investors with medium and highly skilled manpower. Hiring of workers is both free and voluntary. The minimum wage in Ecuador is set according to the macroeconomics policy established by the government. At present, it is 37 dollars per week ; however, when all legal benefits are added, it totals an average of 148 dollars per month. There are many companies that pay more than this legal minimum, on the basis of direct negotiations between employers and employees.
Labour contracts generally last at least one year and include a three month trial period.
Contract modes may be:
{1} For an indefinite period
{2} For a defined period [ at least one year ], or
{3} For a 90 day trial period, after which the contract
takes effect, unless:
a) the work is not a normal part of the
company's operations or
b) there is a requirement for special hiring.
In such cases, the investor may enter into contracts for a specific task, for occasional or temporary services, or for group work or teamwork. The workday is eight hours, and 40 hours per week. The law establishes the right for workers to organise and form entities of different types. A minimum of 30 workers is required to create a labour union organisation.
