Labor Ministry Targets May 1 Cut of "Visto Bueno" Dismissal Process from 120 Days to 30-45

The Reform

Labor Minister Harold Burbano announced on Teleamazonas (April 20, 2026) a planned compression of the visto bueno procedure — the legal process for employment termination with justified cause, per El Universo (source):

Process Context

The visto bueno is the formal administrative procedure through which either an employer or employee petitions the Labor Ministry to authorize termination of the employment relationship for justified cause. Without a visto bueno, termination defaults to unjustified dismissal, triggering higher indemnification under Código del Trabajo.

Political Track

• December 2025: Proposal co-introduced by Minister Burbano and legislator Manuel Blacio.
• Described as "consensuado entre los sectores" — consensus-built with labor and employer groups.
• May 1, 2026: Target effective date (coincides with International Workers' Day — politically loaded timing).

Stakeholder Impact

• Employers:
  • Faster resolution of pending termination cases
  • Earlier certainty on indemnification exposure
  • Reduced carrying cost of suspended-employee payroll during long procedures
• Workers:
  • Faster knowledge of termination outcomes and amounts owed
  • Shorter window of legal uncertainty
  • Earlier access to separation payments
• HR and employment lawyers:
  • Higher throughput per case
  • Different cash-flow profile on contingency-based representation
  • Possibly reduced average fee per case given shortened engagement

What to Watch

• Final regulation text — the acuerdo ministerial itself, which will define the specific procedural steps being eliminated or compressed.
• Scope clarity — whether the 30-45 day window covers all causales (the legal grounds for termination) or only certain subsets.
• Judicial challenge risk — labor legislation changes in Ecuador have historically faced constitutional-court challenges. Watch for litigation from labor federations that did not endorse the consensus.
• Pass-through to cost of hiring — whether reduced dismissal friction improves net hiring rates in formal sector employment. Ecuador's labor market has historically been constrained by employer dismissal cost calculus.
• Interaction with broader labor reform agenda — the Noboa administration has signaled additional labor flexibility initiatives; visto bueno reform is likely one of several sequential moves.
• May 1 political context — announcing a labor-flexibility reform on May Day itself is a notable political posture.

Source: El Universo