National Hourly Employment Program

OF THE OBJECTIVES. The present Decree has as its objective to establish a special emergency program of a temporary nature, in order to promote dignified employment, maintain jobs and prevent the growth of unemployment and underemployment indices in the country, opening work opportunities to the population during the crisis cycle that currently affects the economies of the majority of countries in the world. The special emergency program shall be called the "National Solidarity Plan for Anti-Crisis Employment", which shall be governed within the framework of the Plan of Nation and Country Vision, in harmony with the Constitution of the Republic, Labor Legislation and Social Security and International Agreements subscribed to and ratified with the International Labour Organization, as an immediate and urgent response to address the crisis.

PURPOSE OF THE PROGRAM. The purpose of the Program is:

• 1)

  To promote dignified and decent employment, avoid the increase in unemployment and underemployment indices derived from the crisis in the formal sector of the economy, and simultaneously ensure that these workers enjoy the benefits of social security and occupational health;

• 2)

  To promote education, training and professional development of workers and working women, as a mechanism that facilitates their labor market insertion, to achieve better levels of productivity and competitiveness that result in higher incomes;

• 3)

  To make full use of the installed capacity of productive units, within the framework of economic reactivation programs in both the Private Sector and the Public Sector according to the contents of the Plan of Nation and Country Vision;

• 4)

  To stimulate investment and employment dynamics in both the private and public sectors, especially in branches of economic activities with greater capacity to absorb labor, and 5) To ensure that the economically active population of the country, vulnerable social groups and young people who join the labor force each year, find in the national labor market dignified employment with respect for their labor rights and to achieve that our adolescents and young people develop in an integral manner, reducing the indices of abuse, violence and juvenile delinquency that affects especially the most vulnerable groups and that young people of productive age refrain from abandoning the country putting their lives at risk and the breakdown of their family ties. MODALITIES AND FORMS OF CONTRACTING

DURATION OF THE PROGRAM MODALITIES AND FORMS OF CONTRACTING. The anti-crisis program is classified as a matter of social urgency, with a duration of thirty-six (36) months, from its approval and subject to extension, depending on its results and the conditions of the economy and labor market. MODALITIES AND FORMS OF CONTRACTING 1) During the term of duration of the program the parties may enter into employment contracts by hours or in half ordinary workdays, diurnal, mixed or nocturnal and in complete ordinary workdays, diurnal mixed or nocturnal under the modalities of:

• a)

  For Limited time, or;

• b)

  For determined work or Services. In these cases contracting shall be subject to the regulations of rights and obligations established in the Program. The worker contracted under this modality shall be protected against unjustified dismissal within the term of duration of the employment contract, subject to what is provided in Article 121 of the Labor Code. In the same terms the provisions of reformed Article 120 section g) of the Labor Code shall be applicable, specifically regarding receiving, as stipulated, the benefit for natural death of the worker, provided it occurs within the term of duration of the contract and the requirements set forth in the reform indicated in Decree 150-2008 in effect from the fifth day of November of two thousand eight are met. In any case the minimum workday for which contracting shall occur under this Program shall be two (2) daily hours for rural areas and three (3) daily hours for urban areas. 2) The parties may also exceptionally enter into employment contracts for half workdays or hourly contracts or complete workdays, in which the previous percentage shall not be taken into account in those new industries or economic activities whose nature of business activity is based on hourly employment, part-time or half-time, cases such as new technological activities of communications such as Call Centers or Contact Centers and others that must be classified by the Secretariat of State in the Labor and Social Security Departments. Effective work performed outside the limits of the agreed workday constitutes overtime and must be remunerated as provided in the Labor Code.

SCOPE OF APPLICATION. The Program is of national application, both in urban and rural areas, for all natural or legal persons who are employers, proprietors of productive or service units, as well as for special programs that the public sector develops and that require temporary contracting. Productive or service units that are beginning operations or those already in operation may contract under this Program up to forty percent (40%) of workers and working women, a percentage that shall be calculated on the basis of the total payroll of their permanent personnel. For the purposes of the preceding paragraph, the following shall not be taken into account in determining the percentage: the number of seasonal workers and working women who perform cyclical work, as well as workers or temporary workers already working in productive or service units as of the date of the program's implementation and those who perform work that is not carried out regularly throughout the year. In the case of productive or service units that enter the Program and have from one to fifteen permanent salaried workers or working women, they may contract up to an equal number of workers or working women under this program. In enterprises where a collective agreement is in effect, workers under the modality of this Program shall enjoy the benefits of the collective agreement that may be applicable to them, provided they choose to contribute in accordance with what is provided for in Decree No. 30 which incorporates Article 60-A into the Labor Code in effect. Up to five percent (5%) of the percentage set forth in this article of contracted workers and working women shall correspond to vulnerable social groups, such as: elderly persons, persons with different abilities, young people exposed to migration risks and who have been deported, young people who have completed re-education processes for violating the law, young people rehabilitated from drug and alcohol consumption, young people who have abandoned gangs or criminal organizations, war veterans and retirees who receive pensions below the minimum wage. As for productive or service units that have from one (1) to fifteen (15) workers, the preference in hiring workers belonging to vulnerable sectors shall be up to 10%.

REQUIREMENTS FOR ENTRY INTO THE PROGRAM. Due to the nature of the Program, productive or service units entering it must comply with the following requirements:

• 1)

  Productive or service units may not contract workers and working women under the Program's regulations for work that in accordance with the Labor Code is considered temporary or seasonal.

• 2)

  Productive or service units incorporated within the framework of this Program may not reduce permanent salaried personnel, except for just causes of dismissal, resignation or termination of employment contract by mutual agreement. Vacancies in permanent positions due to justified dismissal, termination of employment contract by mutual agreement, resignation of the permanent worker or creation of new positions, should the employer decide to fill them, may be filled with personnel contracted under this Program, in which case the contracted worker automatically acquires the status of permanent worker, it being understood that a new labor relationship begins, without the trial period taking place in this case; When the permanent position is filled by a worker from the Program, the employer shall retain at their discretion and the right to rehire personnel under the modality, until filling the percentage set forth in Article 4 of the program. The employer who fails to comply with what is stipulated here shall be sanctioned by the Secretariat of State in the Labor and Social Security Departments with a fine equivalent to 25% of the salaries of their permanent payroll.

• 3)

  They must fully comply with the regulations and prohibitions established in international agreements and national legislation on child labor and the worst forms of child labor;

• 4)

  Productive or service units that perform work that, while being inherent to their business line, is not continuous because it depends on production contracts, contracted for determined quantities for delivery on specific dates with occasional clients, so that the delivery or the arrival of the scheduled date puts an end to the contracted work, as well as those tasks that in certain seasons, times or dates of the year intensify and require temporary increase in labor, may enter the Program and contract personnel under the terms thereof; and,

• 5)

  And other requirements set forth in the present Decree and its Regulations.

REMUNERATION. The remuneration of workers and working women contracted within the scope of this Program shall be composed of two concepts: 1) A base salary, which shall be set per hour and which shall not be less than the minimum wage established by Law for each sector of production and services. Said salary shall be set by dividing the amount thereof by the number of hours that shall make up each maximum ordinary workday per diurnal, mixed and nocturnal work as established by Law; and, 2) A non-habitual compensation. For the remuneration of workers and working women contracted within the scope of this program, the following remuneration modalities shall be taken into account: a) By Hour b) By half Workday; and, c) By piece, task, fixed price, piecework or for a determined time. The calculation of remuneration shall be obtained by dividing the legally established minimum daily wage for each sector by the number of hours set by Law for the ordinary diurnal, mixed or nocturnal workday, the result shall be multiplied by the number of hours worked, and this result shall constitute the daily wage to be paid in each work modality. For greater clarity in calculating the salary to be paid plus the non-habitual compensation, an illustrative calculation table is attached to this Program: Concept / Amount Current minimum wage / 5,886.00 Hours worked per week / 44.00 Weeks per month / 4.29 Hours per month / 188.57 Minimum wage per hour worked / 31.21 Minimum wage/hour worked plus 20% / 37.46 *Example corresponds to payment in accordance with the salary authorized for the category of more than 20 employees. Annual Income Annual minimum wage / 70,632.00 / % Thirteenth month / 5,886.00 / 8.33% Fourteenth month / 5,886.00 / 8.33% 10 days of vacations / 1,962.00 / 2.78% Total / 84,366.00 / 19.44%** **Example calculation of habitual compensation. Urban Zone Hours Worked / Income / Monthly / Annual 3 Hours / 2,648.70 / 31,784.40 4 Hours / 3,531.60 / 42,379.20 5 Hours / 4,414.50 / 52,974.00 6 Hours / 5,297.40 / 63,568.80 7 Hours / 6,180.30 / 74,163.60 8 Hours / 7,063.20 / 84,758.40 Base Salary. It is the remuneration that the employer must pay to the worker or working woman by virtue of the employment contract, which shall be paid in legal tender of the Country. When it comes to unskilled labor, the base salary shall not be less than the minimum wage per hour applicable to each sector of the economy where contracting is executed. The base salary shall be agreed per hour in workdays agreed between the parties, in accordance with the special requirements of the industry or service, not exceeding forty-four (44) hours weekly in the diurnal workday, forty-two (42) hours weekly in the mixed and thirty-six (36) hours weekly in the nocturnal; with minimums of half ordinary workday, diurnal, mixed or nocturnal. When contracting is for skilled labor, the base salary shall be that agreed between the parties, provided that in no case may it be less than the minimum wage corresponding by Law. Skilled labor is understood to be that offered by a person whose technical or professional studies and experience in the subject matter of the contracting guarantee the result of the service provision in terms of productivity and quality. In the remuneration that the employer will pay within this program, minimum wages shall not be less than those set for work of equal value performed in positions where men predominate or where positions are predominantly female. Non-Habitual Compensation Productive or service units that remunerate their workers under the modality of a fixed or ordinary salary within the framework of this Program shall pay them a base salary plus a non-habitual compensation, which shall be equivalent to twenty percent (20%) of the agreed base salary; this non-habitual compensation is equivalent to payment of the thirteenth month, fourteenth month and vacations, rights which temporary workers do not enjoy in accordance with the Labor Code in effect. Workers contracted by unit of work (production, piece, task, fixed price or piecework) shall be remunerated in accordance with the agreed base salary, plus a non-habitual compensation equivalent to twenty percent (20%) of the agreed base salary.- These workers may only enjoy such compensation if they meet the production goal that under equal conditions is met by permanent workers of the same productive or service unit. For work agreed by commission, the worker's income may not be less than the minimum wage payment established by Law for the sector where the worker provides services under this modality. The non-habitual compensation shall be paid on the same date, frequency and modality in which the base salary is paid. For all legal purposes such compensation does not constitute salary and is not applicable to qualified workers contracted under this program, provided that the agreed salary is greater than the legal minimum wage and the sum of the non-habitual compensation; or if the payment of compensated benefits has been agreed. The non-habitual compensation defined herein and granted in this program shall not be applicable in those cases where by legal mandate established in the Labor Code or other Labor, Safety and Social Security Laws the compensated benefits must be paid under this program modality.

WORKERS' RIGHTS. Workers contracted under this Program shall be subject only to what is provided in this program regarding rights, obligations and benefits. Without prejudice to any other benefit that the contracting parties may agree upon or that the employer voluntarily grants, they shall enjoy the preferential right to be contracted as permanent. It is understood that within the program workers contracted under this modality shall enjoy the fundamental rights established in the Labor Code and the eight fundamental agreements subscribed to and ratified by the State of Honduras with the ILO, among which are Convention 87 and 98, which guarantee free unionization and collective bargaining in accordance with what the internal labor law provides.

LABOR PROTECTION AND SOCIAL SECURITY In all matters related to measures of health, hygiene and occupational safety, professional risks, benefit for natural death and maternity, workers and working women contracted under this program shall be protected by the provisions of the Law of the Honduran Institute of Social Security, the General Regulations for Preventive Measures for Work Accidents Professional Diseases, and what is provided in these matters in the Labor Code, because they must register the workers contracted under the Program in the special monitoring and registration list at the respective nearest IHSS office even if the service is provided by a Company physician or Private Clinic, under supervision and control of the Secretariat of State in the Labor and Social Security Departments. Productive or service units adhered to the program domiciled in areas where IHSS does not have coverage, and have programs or collective insurance policies for accidents, medical services, disability, invalidity, old age and death, or other social security benefits, for their permanent workers, must incorporate into these, workers contracted under this program. Employers who incorporate into the program shall be subject to the contribution established by the Law of the National Institute of Professional Training (INFOP). The percentage contributed to INFOP by the employer entering this Program shall be managed through a trust in the Central Bank of Honduras that shall be administered by a committee composed of One Representative of the Technical Secretariat of Planning and External Cooperation (SEPLAN), One Representative of the Secretariat of State in the Labor and Social Security Departments, One Representative of the Human Resources Development Center of Honduras (CADERH), One Representative of the Foundation for Development and Technology (FUNDETEC); and, One Representative of the Association of Municipalities of Honduras (AMHON); the monitoring commission of the National Congress shall act as an observer member of this committee, with voice but without vote.- The regulation of this Law shall determine the structure of this trust.

Employers incorporated into the program to guarantee social security services for workers contracted under the program shall enter into the respective agreement with the Honduran Institute of Social Security to provide social security services established by law; in the same manner they may contract these services through agreements with private clinics, company physician systems and insurance.

PREFERENTIAL OPTION TO ACQUIRE PERMANENCE The worker or working woman contracted under this modality who trains and/or pursues their primary or secondary education as the case may be, shall have first option to fill a permanent position in the units that make use of this program.

TRAINING COMPONENT. For the purposes of the preceding article and within the framework of the contents of the Plan of Nation and Country Vision, the Secretariat of State in the Labor and Social Security Departments jointly with the Trust Administration Committee and other institutions involved in the matter, shall design an intensive plan of formation and training, which shall be executed in the manner and with the requirements provided in the Program. To fulfill this purpose, the Secretariat of Labor and Social Security shall act as facilitator before the corresponding authorities of the Technical Secretariat of Planning and External Cooperation (SEPLAN). This plan shall begin its execution within a period not exceeding three (3) months after the approval of this Decree, in order to clearly identify the target population and have the necessary financial resources available.

MONITORING AND CONTROL The Secretariat of State in the Labor and Social Security Departments through the General Directorate of Employment shall establish the procedure to monitor this program and the mechanisms for gathering information, monitoring and control thereof, as well as the eligibility criteria for workers to be contracted. It falls to the Secretariat of State in the Labor and Social Security Departments through the General Directorate of Employment and the General Labor Inspection in coordination with the Economic and Social Council (CES), to monitor and control strict compliance with this Program, its Creation Decree and respective Regulations and in particular to prevent it from giving rise to practices of anti-union discrimination. Within the framework of the periodic evaluation of this program the supervision and control authorities shall examine which sectors of the population the program has had greater impact on, and also evaluate its application and whether this has implied or not, a change in existing inequalities of access to employment in communities or sectors historically unprotected; in the same manner the corresponding statistics disaggregated by gender must be prepared. For purposes of the preceding paragraph the Secretariat of State in the Labor and Social Security Departments shall report quarterly to the Economic and Social Council (CES) and the Honduran Council of Country Vision on the results of the Program with a report containing the statistical data and results produced by the Special Regime regulated in this Decree; the Secretariat of State in the Labor and Social Security Departments shall in turn send this report to the National Congress with the respective documentation. The Secretariat of State in the Labor and Social Security Departments jointly with the Economic and Social Council (CES), with the support of the National Congress shall establish the mechanisms for broad dissemination of the program.

MONITORING COMMISSION A Monitoring Commission shall be established, composed of one representative from each of the three (3) Confederations of Workers legally recognized that comprise the Economic and Social Council CES and three (3) representatives appointed by the Honduran Council of Private Enterprise (COHEP), and among these a representative of small and medium business must be incorporated. The Secretary of State in the Labor and Social Security Departments or their representative shall preside over it.

COORDINATION RELATIONSHIPS To guarantee the effective execution of the purpose pursued by the program, as well as the adoption of uniform criteria regarding its application, the Secretariat of State in the Labor and Social Security Departments shall establish coordination mechanisms with other institutions involved in it.

FORM OF CONTRACTING Due to the exceptional nature of the Program, employers shall enter into individual employment contracts in accordance with the model contract prepared by the Secretariat of State in the Labor and Social Security Departments, in which must be set forth the rights, obligations and responsibilities of the parties within the framework of this Program; without prejudice to the fact that at least the guarantees and rights granted to non-permanent workers by the Constitution, the Labor Code and other labor or social security laws must be understood as included. Signed contracts must be registered in the Secretariat of State in the Labor and Social Security Departments, in accordance with what is provided in the Regulations. The completion of the work or the date of termination of the contracted service necessarily puts an end to the contracted labor relationship, without any labor responsibility for the parties, and must be communicated in writing with fifteen (15) days' notice prior to the occurrence of the scheduled date or event. Either of the parties may terminate the employment contract before the completion of the work or the date of termination of the service in accordance with what is provided in Article 121 of the Labor Code in effect. In cases of maternity, workplace accidents and professional risks, the provisions of the Law shall apply.

FINANCIAL RESOURCES. The Technical Secretariat for Planning and External Cooperation (SEPLAN) and the Ministry of Finance shall support the Ministry of Labor and Social Security in obtaining financial resources for the training of workers covered under this Program.

UNFORESEEN CASES. This Decree contains a program that by its exceptional nature is a special emergency program classified as a matter of social urgency and determined duration. Any case not provided for in this Decree or its regulations shall be resolved in accordance with the principles of labor law, international labor conventions, and the provisions of the current Labor Code.

OFFICE OF INFORMATION AND COMPLAINTS AGAINST ABUSE IN THE APPLICATION OF THE NATIONAL HOURLY EMPLOYMENT PROGRAM. An Office of Complaints Against Abuse in the application of the National Hourly Employment Program is hereby created, which shall be under the responsibility of a Special Follow-up Commission of the National Congress. In order to provide timely information, guidance, and ensure affected persons a prompt investigation of their complaint or inquiry, the National Telecommunications Commission CONATEL is instructed to enable a three (3) digit short code 267 and *267 at no cost to the user, so that they have access to all fixed and mobile telecommunications operators. These numbers shall be available to the Commission responsible for ensuring compliance with this Law and to the Office of Information and Complaints Against Abuse in the Application of the National Hourly Employment Program. All operators shall install a minimum of one (1) ISDN PRI of thirty (30) channels, or failing that, in IP technology to handle citizen calls. The Office of Information and Complaints shall proceed to transfer the complaint to the Ministry of Labor and Social Security so that, through the General Labor Inspectorate, it may proceed with the investigation thereof and the application of sanctions in cases where appropriate. The Ministry of Labor and Social Security shall submit to the National Congress a report of the results of the investigations and sanctions applied.

REGULATIONS. The Ministry of Labor and Social Security, jointly with one member of the labor sector and one member of the business sector designated by the Economic and Social Council, shall issue regulations for this Decree within a period of thirty (30) days from the date of its publication in the official newspaper La Gaceta. TRANSITIONAL PROVISION

Prior to the drafting of the Regulations established in Article 19 of this Program, and as of its publication in the Official Newspaper La Gaceta, employers and workers who join the same may execute their employment contracts and immediately begin their activities under this modality, adjusting themselves to the norms established in the Program and shall make the necessary adjustments during the term of duration of the contracts in accordance with what is provided in the respective regulation.

EFFECTIVE DATE. This Decree shall become effective as of the date of its publication in the official newspaper La Gaceta. Given in the city of Tegucigalpa, municipality of the Central District, in the Session Hall of the National Congress, on the fourth day of the month of November of two thousand ten. JUAN ORLANDO HERNÁNDEZ ALVARADO PRESIDENT RIGOBERTO CHANG CASTILLO SECRETARY GLADIS AURORA LÓPEZ CALDERÓN SECRETARY To the Executive Branch. Therefore: Execute. Tegucigalpa, M.D.C., November 5, 2010. PORFIRIO LOBO SOSA PRESIDENT OF THE REPUBLIC THE MINISTER OF LABOR AND SOCIAL SECURITY. FELÍCITO ÁVILA ORDÓÑEZ