- Labor reform: How the dismissal mechanism will be changed in the new labor law project
In the Eve of the start of the legislative debate on labor reformSome points in the official project continue to raise doubts about its real scope. Especially after seeing the final letter of the initiative, which promises a turnaround in labor relations as they are known in Argentina, There remains a lot of uncertainty about who the new rules will apply to. and in particular on one of the core axes of the project: the termination regime and its means.
The main controversy was sparked after the Modernization Minister Federico Falleneggerstated this publicly on Friday The reform applies to all employment contracts, including those that have already come into force. He did this in an interview on Radio Miter when asked by journalist Willy Laborda how the compensation calculation will be applied and whether there will be a distinction between workers hired under the current legislation and those who start an employment relationship under the new regime.
“The law applies to everyone” said the official, emphasizing that with the labor reform “We only clarify questions of employment contract law and the Employment Contract Act applies to everyone“The observation is not insignificant: in labor courts there is no clear doctrine as to which rules should be applied when calculating compensation, whether that which was in force at the beginning of the employment relationship or that which was in force at the time of termination of the employment relationship.
From this definition it follows A second key question: whether or not the new law can have retroactive effects. From a legal perspective, the general principle is that laws do not apply retroactively – with the exception of criminal law when they benefit the convicted person – so labor reform should not change the terms of pre-existing employment relationships. However, in this case, gray areas arise that fuel the debate.
From the CGT, one of its triumvirs, Cristian Jeronimosharply questioned the initiative and accused the government of moving forward with “malicious wording.”. “We had increased it and they said no, it was for the new workers.” explained the co-general secretary of the union about the impact of the reform on current contracts.
The Doubts are reinforced by a formula that is repeated in all articles and this according to labor experts consulted by The Chronicleropens the door for diverse interpretations: the “mutual agreementDuring the radio interview, Stützenegger emphasized that the most sensitive aspects of the regulations – such as holidays, holidays or rearranging the day – could only be changed with the consent of both parties.
However, concerns remain among experts about the possibility of employers unilaterally pushing forward the individual renegotiation of “some working conditions”, even if these are not essential elements of the contract. This is what they point out The repeated appeal to “mutual consent” creates deliberate confusion about the extent of individual availability of rightsin a context of pronounced asymmetry between employer and employee in “agreement” on new conditions.
For example, the minister defended the proposed changes in Vacation regimeThis would allow for fragmentation into periods of at least seven days to provide businesses with greater predictability. He argued that the current system was anachronistic given the demands of younger workers.
In this sense, he supported the implementation of the Hour bank that allows reorganization of the working day without eliminating the concept of overtime. However, although the reorganization of the workload requires the consent of both parties, the official did not specify what protection mechanisms the employee will have in case of possible business pressure to accept this arrangement.
Labor reform: How the dismissal mechanism will be changed in the new labor law project
Another focus is on the dismissal regime. Labor activists remember this Legal opinion is divided between those who believe that the law in force at the time of employment should apply and a majority who believe that the rules in force at the time of termination of the employment relationship apply. If this last criterion is imposed, Once the reform is approved in Congress, layoffs would be governed by the new legislation, also for links that were initiated under the previous regulation.
Fallenegger put these effects into perspective by pointing out that the legal basis for calculating remuneration – one monthly salary per year of service – would not be changed.. However, The project introduces relevant changes in the composition of this calculation by excluding items such as bonus and vacation.. “The problem is not compensation, but updating the justice system,” said the minister, echoing the demands of business.
The government rejects this imposition and assures us that the aim is to expand the parties’ scope for freedom. Amid tensions with the CGT and as the ruling party tries to organize parliamentary support to move forward with the initiative, Rumpfenegger explained that the central aim is to “eliminate legal uncertainty” and “promote industrial relations that are better adapted to the productive realities of each region”.
The economic core of the reform also raises questions. The minister defended the creation of Working Aid Fund (FAL), which is financed with a contribution of 3% of the current workloadS. This percentage will come from funds currently allocated to the ANSES for the payment of pensions, which will entail a reduction in the appropriation in the pension system.
At this point, Labor law representatives warn of a relevant gap which they hope will be clarified in parliamentary debate or in subsequent regulations: the destination of the funds redirected to the FAL in the event of bankruptcy, dissolution or cessation of activity of the employer.
He Article 72 of the project titled “Remnant” states: “at Termination, dissolution, liquidation or bankruptcy of the employer, the individual account is deleted, and The funds must be transferred to an employer’s bank account in the countryunless the bankruptcy judge determines otherwise“The same logic applies if the employer fails to report employees for a period of six consecutive months unless it proves that a legal claim is pending.
Since these are funds originally intended for the ANSES and the State refrains from setting up relief funds in the event of dismissals or incapacity to work, The question that hangs over the previous debate is If these leftovers do not return to their original destination, the pension system takes overinstead of being owned by the employer, without a specific purpose in the project text.
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