The plight of Cuban workers: Rights violations
by the Cuban government and
Institute for Cuban & Cuban-American Studies, University of Miami
For the past half century Cuban workers have been subjected to an
oppressive system which violates the most elemental working class
rights. The state controls labor employment and salaries. There is
only one labor union and is controlled by the state. Strikes and
collective bargaining are prohibited.
All major enterprises in Cuba are owned by the government and
the ruling military elite manage over 60% of the country’s key
economic activities, particularly in the tourist and mining
industries. This militarized social and economic environment oversees
Cuba’s “workers’ paradise.”
Major Cuban State Enterprises
GAESA, or Grupo de Administracion Empresarial S.A. (Enterprise Management
Group Inc.), is the major holding company of the Cuban Defense
Ministry’s vast economic interest. GAESA’s Board Chairman is Luis
Alberto Rodriguez Calleja, married to Raul Castro’s oldest daughter
Deborah. The company’s enormous holdings include the tourist group
Gaviota S.A. in charge of operating some of the finest and largest
resorts in Cuba. It has a large employee base of tens of thousands of
laborers and manages over 13,000 hotel rooms throughout the island and
over 150 restaurants. (1)
Grupo CIMEX S.A. is also a major state controlled entity that employs
over thousands in retail businesses such as department stores,
cafeterias, gas stations, auto-part outlets, apartment rentals, and
tourist operations managed by Grupo Internacional Havanatur. CIMEX,
along with Cubanacan and Gaviota, promote joint ventures (empresas
mixtas) with foreign investors doing business in hard currency.
Major Foreign Enterprises in Cuba
There are several international corporations that are financially
associated with Cuban state owned entities. These corporations form
joint ventures usually with more than one Cuban government enterprise.
Following are some of the several international corporations operating
in Cuba: Melia Cuba Hotel International (Spain), Sherritt
International Corporation (Canada), Club Mediterranee S.A. (France),
Elictricite de France (France), Telecom (Italy), Pernod Ricard (France),
Mercedes Benz (Germany), Ibero-Star (Spain), and Viaggi de Venaglio (Italy).
In 1995, the Cuban regime, anxious for hard currency, approved Law 77,
which regulates foreign investment and describes permitted businesses.
Nine years after in 2004, the regime enacted Accord 5290 which
complemented Law 77 by introducing new commercial regulations allowed
in the communist island.
This law defines three permissible business varieties in Cuba. These are
Joint Ventures (empresas mixtas), Contracts of International Economic
Association, and Foreign Capital Companies. Joint ventures are the
most common according to the European Union. (3) Joint ventures are
defined as a business enterprise between one or more “Cuban
government mercantile companies…acting as domestic investors and one
or more foreign investors.” (4)
Additionally, joint ventures can also have offices outside of
Cubans are not permitted to partner with foreign companies.
Only the State is allowed to form joint ventures.
Cubans are only allowed to own very small businesses such as
pizza parlors, barber shops, etc.
No Cuban is permitted to own large businesses or those involved
The Plight of the Workers
Workers in Cuba are at the mercy of the State. The Cuban government
denies workers the right to negotiate with corporations. In the
specific case of joint ventures, the contract arrangement between the
State and the foreign company establishes the pay rate for each
employee. The salary is determined by the average pay rate of similar
positions in the region. Although the foreign investor in the joint
venture agrees to pay salaries in dollars or Euros for the services,
it does not have authority to directly employ or pay the Cuban laborer.
Instead it must sub-contract the service from a state controlled
employment agency. This agency pays the worker in Cuban pesos,
pocketing a major portion of the foreign payments.
Cuban labor laws, as well as Resolution 3 (1996), states that Cuban
employees cannot establish management-labor links for contract
negotiation with joint ventures, or any other business modality that
includes a foreign investor. Instead, joint ventures have to turn to
state owned work agencies to provide them with workers. These labor
agencies are owned and regulated by the state. They choose and assign
workers to the various joint venture companies. They pay workers in
Cuban pesos while receiving payment in Dollars and/or Euros.
Cuban government agencies pay laborers standard salaries in pesos as
determined by the state. Based solely on the exchange rate (1 dollar =
24 pesos), Cuban workers receive only 1/24 of the salary or less paid
by the foreign entity for their services.
In most instances Cuban workers’ payment are further reduced
in the process.
Since his arrival in the United States, Miguel Castillo, Cuba’s former
Vice-Minister of Foreign Commerce, and Jesus Marzo Fernandez, ex
functionary of the Ministry of Economy, have documented the
exploitation of the Cuban laborer by the state.
For example, the monthly salaries paid by the Spanish
enterprise Ibero-Star for the services of a general manager and a
mechanic were US$550 and US$460, respectively. However, the general
manager receives 400 pesos and the mechanic 200 pesos. The Cuban State
employment agency pays them instead the national average salary set by
the Labor Ministry for that specific job and not what the foreign
company paid for their services. (5) Castillo described situations he
witnessed where the joint venture’s contract established the salary
for an auditor at US$1,200. The amount he received, however, was a
mere 600 pesos. Another example provided was that of an electrician at
a hotel facility where the foreign investor was paying the Cuban
employment agency $600 dollars and the electrician only received 400
These are but some instances of the systematic workers’ rights
violations perpetrated by the Cuban regime’s economic apparatus. The
Cuban government is in clear violation of international treaties such
as the United Nations Convention concerning the Protection of Wages
(No. 95), ratified in 1959. (7) Article
6 states that “employers shall be prohibited from limiting in any
manner the freedom of the worker to dispose of his wages.”
Furthermore, Article 9 of this convention prohibits “any deduction
from wages” made by “any intermediary (such as a labor contractor
or recruiter).” (8) Thus the payment mechanism enforced by the
communist regime for Cubans laboring in joint ventures with foreign
investors remains as a severe violation of Workers’ Legal Rights.
The foreign investors are aware of this system. They accept it because it
provides them with a docile workforce at perhaps a lesser cost than in
other countries. In a sense, foreign investors have become accomplices
of the communist regime in the exploitation and violation of workers
and their rights. They
seem, furthermore, unconcerned with future liabilities when there is a
change in Cuba and workers exercise their legitimate demands and sue
foreign corporations for underpayment of wages.
The policies and attitudes of the Cuban government toward workers in
joint ventures, are a reflection of broader abuses being committed in
Cuba. An abusive political system, an arbitrary legal system, a
controlled press, human rights abuses, and a highly centralized
economy are some of the problems Cubans experience in their daily life.
(1) Staff Report, Cuba Transition Project. “The Cuban
Military in the Economy.” Institute for Cuban and Cuban American
Studies. University of Miami. 2003.
(2) “Non-United States Companies and the Republic of
Cuba.” U.S.-Cuba Trade and Economic Council, Inc. 2012.
“Foreign Investment and the European Union in Cuba.” Center for
the Study of the Cuban Economy. University of Havana. 2012.
Law for Foreign Investment. Law 77 (1995). Cuba.
Matias F. Travieso-Diaz and Charles P. Trumbull IV. “Foreign
Investment in Cuba.”
interview with former Cuban Vice-Minister of Foreign Commerce Miguel
Castillo. Miami, September 25, 2012, and with former functionary of
the Minister of Economy Jesus Marzo Fernandez, Miami, October 2, 2012.
Alberto Luzarraga. “La Nulidad de Contratos de Inversión Extranjera
por Causa Ilícita: Defraudar al Trabajador Cubano.”
Convention concerting the Protection of Wages (No.95). Human Rights
Library. University of Minnesota. 2012.
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