In what Venezuela’s government described as the “first law in the transition to socialism,” President Hugo Chavez has signed into law new comprehensive labor legislation. Hundreds of thousands of Venezuelans marched through the streets of Caracas on May 1, International Workers’ Day, to commemorate the signing of the historic document.

“The triumph of the people, of the workers, has never come about without a long process of resistance, of struggle, suffering even. This law, which I will have the honor of signing … is the product of a long process of struggle,” said President Chavez.

The legislation reduces the work week to 40 hours and seeks to abolish private sub-contracted labor in the country, which the state views as an exploitative practice and relic of neoliberal policies of the 1990s.

Women’s rights groups hailed the law as a big step forward for gender equity in the workplace by increasing post-natal maternity leave from 12 to 25 weeks and protecting new parents from dismissal for up to two years after the child’s birth.

One of the greatest victories cited by workers’ collectives is the reinstatement of specific workers’ rights dismantled by the Rafael Caldera administration under pressure from the International Monetary Fund and corporate interests in 1997.

Along with the reestablishment of the retirement bonus – a worker’s last monthly wage multiplied by their years of service – the new law requires that employers compensate workers who are unfairly dismissed, by an amount double their retirement bonus.

A government agency will be established to monitor employers’ compliance with the new law, which will be implemented in 12 months. Workers will now have the option of having their retirement processed in a private bank, a public bank, or the new state-owned national retirement fund.

Earlier this year, Chavez announced a 32.5 percent increase in the monthly minimum wage, to be carried out in two phases. The first phase took effect on May 1 with an increase from 1,548 bolivares ($360) to 1,780 bolivares ($413.90). On September, it will increase another 15 percent to 2,047 bolivares ($476).

Foreign Minister Nicolas Maduro called the labor law “an instrument for constructing the highest stage of socialism,” and contrasted it with the anti-worker laws that are being enacted in Spain where a quarter of the labor market is unemployed.

Venezuelan lawmakers began discussing labor reform nearly nine years ago, but it only gained momentum when Chavez promised to address the issue last November after receiving calls from workers’ groups to “revolutionize” current labor laws.

“We are re-affirming our willingness to … move on from capitalist relations of production, which condemn workers to exploitation, to socialist relations of production, which allow us to construct a new order of labor in freedom, solidarity and participation, with absolutely no exploitation,” said Pedro Eusse, general secretary of the Venezuelan Communist Party.

The government used grassroots institutions established by the Chavez administration over the past decade to collect input from a large cross-section of society. During the five-month consultation process with communal councils, trade unions, and political parties, the government received 19,000 proposals, 90 percent of them from workers themselves.
According to International Consulting Services, an international polling agency, over 80 percent of Venezuelans hold a positive view of the law, compared to 13 percent who do not. The new law replaces the original labor law that was enacted in 1936 amid rising tension between workers and foreign companies, an event which sparked the nation’s labor movement.

Some organizations have emphasized that the struggle continues and called on people to remain combative. Questions remain about the role of the informal sector, the strengthening of socialist workers’ councils, and the transfer of decision-making over management and production to workers.