The regulation extends social service to the private sector, establishes a guarantee of six salaries for certain job terminations, and expands the powers of the Labor Inspectorate
14ymedio, Havana, September 19, 2026 / The new Labor Code, published this Friday in the Official Gazette and set to take effect next September 25, eliminates the terms “available workers” or “interrupted” – euphemisms used for decades for those who lost their positions as a result of a reorganization – and replaces it with a more technical and longer formula: “termination of the employment relationship for economic, technological, and structural reasons.”
The change does not mean that employment could not previously be lost for these reasons. The former availability regime already provided for the elimination of positions, relocation, and, ultimately, termination of the employment relationship. What is new is the wording, the new financial guarantees, and the obligation of both state and private employers to establish mechanisms to protect the income of those affected.
Law 189/2026 first provides for measures aimed at avoiding termination. If an entity’s difficulties are temporary, new hiring may be restricted, workers may be sent to retraining courses, or a provisional reduction in the workday may be agreed upon. In this last case, the employee is paid only for the time actually worked. The measure must be agreed with the worker and adopted by mutual agreement with the trade union organization.
Except for budget-funded institutions, all employers must protect their workers’ income in the event of work interruptions
When a reorganization permanently affects a position and no other placement can be found, the employment relationship may be terminated. If the worker is also unable to find employment through his or her own means, he or she is entitled to a guarantee equivalent to six basic salaries for the position held. The amount must be paid in a single installment, within 30 days following notification of the employer’s decision.
Protection is drastically reduced if the worker rejects a relocation proposal without justification. In that case, he or she receives only the equivalent of one month’s basic salary.
The new Code regulates the conditions under which an entity may reduce its workforce, but it does not incorporate the right to strike. Although it includes principles related to trade union freedom, workers still lack express recognition of this instrument of collective pressure against employers.
The legislation also introduces an obligation that fully applies to MSMEs (micro, small, and medium-sized enterprises) and other private employers. Except for budget-funded institutions, all employers must protect their workers’ income in the event of work interruptions, terminations for economic reasons, the dissolution of MSMEs or cooperatives, and other situations that halt operations.
The private sector also appears in another of the legislation’s important changes: the social service of recent graduates
To do so, they may take out an insurance policy or use other legally provided mechanisms. The regulation allows up to 90 days from its entry into force to establish that coverage, although workers affected by a termination during that period retain the right to the salary protection provided for under the Code.
The private sector also appears in another of the legislation’s important changes: the social service of recent graduates. When placement in a state entity is not possible, municipal Labor departments may arrange agreements with private companies and other private entities so that young people fulfill this obligation there.
The assigned position must correspond to the training received and to the needs of production or services. If a graduate assigned to the private sector believes the position does not match his or her studies, he or she may file a claim with the courts. Placement, however, is not voluntary. If the graduate fails to report, rejects the assignment, or interrupts the social service without a cause considered justified, he or she may be barred from practicing professionally.
When a young person has been placed in the private sector, his or her employer may file a request for disqualification with the institution that approved that entity as an economic actor. The file then goes to the Ministry of Labor and Social Security, whose Legal Department makes the decision. Administrative appeals, and subsequently judicial recourse, may be filed against that ruling.
An inspector may order the temporary closure of an establishment as a precautionary measure for a period of up to 180 calendar days
The legislative package also strengthens the tools available to the Labor Inspectorate. Decree 179/2026 establishes a new system of violations applicable to employers in any sector and allows for the imposition of fines, the halting of equipment, and the ordering of the total or partial closure of establishments.
Even before the sanctioning procedure concludes, an inspector may order the temporary closure of an establishment as a precautionary measure for a period of up to 180 calendar days, when the conditions provided for by the regulation are met. During that time, all activity is prohibited at the closed premises. The measure may be lifted once the causes and effects of the unsafe conditions that prompted it have been eliminated. If the irregularities persist, the sanction may end in permanent closure.
The new framework also affects MSMEs when they cease to exist. Before dissolving a micro, small, or medium-sized enterprise, the labor and salary treatment provided for these processes must be applied to its workers, so that the disappearance of the business does not automatically eliminate obligations to the workforce.
Law 189 replaces the Labor Code approved in 2013 and was passed by the National Assembly on July 30. Its seventh transitional provision makes the change in language clear: all legal references to “available workers” must now be understood as referring to those who undergo a “termination of the employment relationship for economic, technological, and structural reasons.”
Translated by GH.
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