The government of Javier Milei has announced the bases of the labor reform which it will try to have adopted in a law at the beginning of 2026. Reducing severance pay and employer contributions, limiting the right to strike and making salary negotiations more flexible are the axes of the project which should be submitted to Congress this week. The details of the reform have not yet been defined by the Ultra government, crossed by internal tensions between the sectors which intend to advance the resources received by the unions and those which prefer to avoid a confrontation to guarantee the approval of the project. Many unions have already expressed their rejection and the most combative organizations have organized the first demonstrations against the initiative.
While Milei went to Norway to participate in the presentation of the Nobel Peace Prize to Venezuelan María Corina Machado, his chief of staff, Manuel Adorni, presented on Tuesday a document including “a coherent set of structural reforms” for the Argentine economy. These are the conclusions drawn up by the May Council, a consultative body which has included, for a year and a half, representatives of the government, the provinces, certain companies and unions.
The council’s final report lists eight general proposals that would be translated into bills. This is what they called each of them: “the inviolability of private property”; “the non-negotiable budget balance”; “reducing public spending”; “useful and modern initial, primary and secondary education”; “a tax reform that reduces the tax burden”; “the commitment of the provinces to advance the exploitation of natural resources”; and “the opening (of Argentina) to international trade”.
The eighth proposal consists of “modern labor reform that promotes formal work.” The first thing that the official document highlights is that it promotes “the renegotiation of collective labor agreements, most of which date from 1975 and are therefore outdated”. The Executive intends to eliminate what is called “ultraactivity of agreements”, that is to say the automatic renewal and without deadline of agreements concluded between unions and professional associations.
Another aspect of employment agreements that we seek to eradicate is the dominance of national agreements over local or company agreements. “The proposal aims to reverse this priority, giving priority to smaller agreements,” says the report, which asserts that “this will allow collective standards to be adapted to local realities.” For unions, this change would imply a weakening and atomization of their negotiating capacity.
The Milei reform also aims to “reduce the tax pressure” on businesses and employers. And it aims to reduce the amount of compensation received by workers in the event of dismissal without cause: for its calculation, it establishes that income that is not verified every month, such as bonuses or vacations, until now included, is no longer included.
“Measures are incorporated aimed at guaranteeing the rights of society against disproportionate industrial action that may affect the general interest,” the proposal states. The objective is to “guarantee that certain services essential to society are not affected by strong-arm measures”. The Milei government had already tried to establish a similar measure by decree in the middle of the year, but the court rejected it, ruling that it violated the right to strike guaranteed by the Constitution.
One of the main promoters of labor reform is the Minister of Deregulation and State Transformation, Federico Sturzenegger. The senior official argues that the government should strengthen the power of unions – a bastion of Peronism – and, to do this, he advocates the elimination of certain contributions from employers and workers to union funds. Other sectors of the Executive believe that direct confrontation with the main trade union organizations must be avoided. When the reform bill reaches Congress, we will know who won the battle.
The main union federation, the CGT, announced that it would meet this Thursday to take a position on labor reform. One of its leaders participated in the May Council, but was absent from the presentation of the final report, a diplomatic way of showing disagreement with the document. Other federations have already put forward their rejection. “The labor reform desired by Milei and a group of colonial-oriented businessmen is a already seen flexibility that has already proven to be a failure. This does not create a single registered job, it only generates more inequalities,” warned Hugo Yasky, leader of the Workers’ CTA and deputy of the Unión por la Patria (Kirchnerism).
Organizations such as the Polo Obrero (PO) and the Union of Popular Economy Workers (UTEP), among others, held protests this Tuesday in different regions of the country. The state employees’ union, ATE, led a 24-hour strike; Union president Rodolfo Aguiar spoke out against “regressive reform” and didn’t just blame Milei: “Governors are necessary participants in the greatest democratic attack on all labor rights. »
The Milei government has included labor reform among the topics that will be debated during the extraordinary legislative sessions that will begin this week. After the official victory in the October elections, and thanks to the transfer of conservative and centrist legislators to the bench of La Libertad Avanza, the far right is confident of obtaining the half-sanction before the end of the year in the Senate and of approving the law, in the Chamber of Deputies, at the beginning of 2026.
About The Author
