When it looked like the labor reform deal would be postponed until February or March, Javier Milei ordered labor reform to be accelerated and put on the tableone of the most impactful initiatives of the Libertarian government, has been questioned by the CGT.
On the axes of the “modernization” of the labor market The official interest in setting limits on the so-called “test industry” stands out, This has been a headache for companies for years and many SMEs, which are on the verge of bankruptcy, cannot afford the amounts.
Javier Milei accelerates labor reform: trial industry and cheaper wages
In order to achieve this, legal scholars act in consultation with labor judges, says Casa Rosada, and They promise to nip this “business” in the bud.
With this goal, The project will establish a reduction in the compensation calculation base, by not taking vacation or bonuses into account.
But at the point that promises to spark further controversy with the unions – which have already started protest marches – he will make a proposal the establishment of a labor assistance fund (FAL) to finance redundancies.
This FAL receives the contribution of 3% of companies to the SIPA, as stated in the official initiative defended by the libertarian lawmakers who already have the first minority in the lower house.
It will not be the only coup de grace that will be given to the unions. The project envisages the complete elimination of so-called “ultraactivity”.
This is a key concept that the CGT has defended in the past. This official initiative would end the continuity of collective agreements beyond their expiry.
In addition, the conventional negotiations of the companies are given priority over those of the activity.
The recitals emphasize that this is the aim reduce the labor costs of companies.
And also to make the hiring conditions more flexible – a dirty word in Argentine labor history.
If there is something that Milei has not been able to achieve in these two years of his term, it is the creation of sources of employment. Quite the opposite: there were more than 300,000 layoffs during his term in office.
The government assures that this law will promote employment. When it comes to the unions, he claims the opposite: “Not only will no jobs be created, but the existing ones will become even more precarious.”already affected by the growth of the monotributistas in the workforce,” They point out the CGT.
The project also restricts the right to strike and collect dues from union members.
And to a point claimed by the companies reduces employer contributions.
“This combination will enable rapid job creation in a year that will be much less volatile because there are no elections,” speculates the Labor Department.
“What stands out most about work modernization is: Ultraactivity, priority of agreements and work tax burden. “There are many things, there are problems for the self-employed, platforms, changes in agricultural work and the repeal of outdated regulations such as the telework law, which have not had the desired effect.”said Chief of Staff Manuel Adorni, without providing any specific information about the reform.
From the UIA: It has been proposed that up to 95% of employer contributions be counted as a tax credit and that progress is made on specific reforms such as partial leave, hourly rates and installment payment of work penalties.
For the deregulation minister Federico Rumpfenegger, It is a “very balanced” labor reform so that there is more employment in Argentina, that the costs burdening the employment relationship are reduced so that salaries can increase.
In the CGT they sharply question the project, pointing out that it was drawn up directly by consultants from large companies, such as Julián De Diego, perhaps one of the most prominent advocates for flexibility.
The reform will have several defenders, above all Rumpfenegger himself, who has been trying for some time to put the need for collective agreements by company and region on the agenda.
The challenge will be to end a labor system that has been in force in Argentina for 80 years and that clearly no longer contributes to the creation of work, but rather hinders this possibility, they say, close to Adorni.
With this logic, The project reduces the number of concepts which form the wages in order to be taken into account when calculating the dismissal compensation.
In this logic applies Benefits such as vacation, bonuses, tips or prizes are not considered “non-cash wages”, They are therefore not included in the compensation calculation.
And in the most controversial and at the same time boldest point, the concept of “dynamic content” arises, which enables integration an additional salary based on the employee’s “personal” merits.
This surcharge is also not taken into account in the dismissal compensation.
The FAL, one of the most controversial changes
The project designs a binding system for financing severance payments, called FAL.
It arises from the mandatory contribution of 3% of salary, which serves as the basis for calculating employer contributions to the Argentine integrated pension system.
To ensure the company’s security, this money is deducted from the company contribution to pension insurance.
In this way, it would end up being the state – a low-tax route – that would fund the payment of compensation.
Vacation and time bank
The initiative also provides legal protection for the possibility of agree to divide the vacation into at least 7 days.
And the “hour bank” is created, which would enable companies to compensate employees for “overtime” with “francs”. instead of paying traditional overtime. More cost reduction at the expense of employee income.
In addition, a scheme to encourage the creation of formal employment by reducing employers’ contributions is being considered.
The benefits are valid for one year and provide for an employer contribution rate of 2%; Rate of 3% for PAMI and 3% for the Employment Assistance Fund.
In any case, it applies for the first 4 years after the start of the new employment relationship.
As it turned out, for already registered employment, it provides for a 6% reduction in contributions for the operation of social services by the employer, which would affect the union’s coffers.
With a view to reducing the burden, it also provides for a reduction in employers’ contributions to the social security subsystems, INSSJ, the National Employment Fund, SIPA and the family allowance system.
For the Services and Commerce category it would be between 20.40% and 17.40% as long as sales exceed the limits of a medium-sized company; And from 18% to 15% for other private sector employers.
Less power for unions: regulation of the right to strike and assembly
The project also establishes Providing “essential services or activities of paramount importance” in the event of a strike.
And it restricts the holding of meetings and clarifies that “the employee will not receive any salary during this period.”
It even defines blocking or taking over companies as “serious violations.”
Another blow to the unions, The project makes it easier for company unions to obtain union status, an old demand from the employer sector.
In addition, it reverses the priority of the agreements and determines that an agreement with a smaller scope will sooner or later take precedence over another with a larger scope.
This is one of the points most questioned by the unions who are already preparing protests. Without driving any further, drive The ATE party at the national level is planning marches in front of Congress to reject the labor reform project.
The project, on the other hand, is considering calling and Carrying out employee meetings outside and inside companies.
It takes care of that You need prior approval from the employer about the schedule, duration of the meetings and the place where they will be held.
And those who attend do not receive any salary for the time required by the meeting.
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