President Javier Milei signed the controversial and much-commented agreement this Thursday Labor Reform Project The The government sent them to Congress to be discussed in the extraordinary meetings. The initiative, which passed the Senate into Parliament, consists of 79 pages and describes one by one the changes that the ruling party intends to introduce in Law 20,744 on employment contracts, the backbone of Argentina’s labor legislation.
The text represents Milei management’s most ambitious commitment to make hiring and firing conditions more flexible, redefine individual and collective rights and promote a permanent reduction in employer contributions. Specifically, the project proposes a new regulatory framework It directly affects the way work relationships are organized, compensated and terminated.
Among the main points of the reform and in relation to the worker are changes with major social and economic implications: Compensation (sensitive axis and the one that attracts the most public attention); Vacation (with changes that reach all workers; over time (a key chapter in daily work organization); working day (where flexibility instruments are introduced for employers and employees) and Wages (with new rules that reorganize what concepts constitute compensation and how they are paid).
“The proposed labor reform aims to achieve thiso Modernization of the employment system in Argentina “through clear and predictable rules that counteract legalization and allow the development of more agile relationships in line with current production dynamics,” the government announced in a summary sent to the press. It added: “Through various mechanisms, the project aims to reduce labor costs, promote the creation and formalization of jobs, encourage new investments and simplify administrative burdens.”
Below you will find point by point what and how it changes:
The project is being rewritten Article 245 of the Employment Contract Law and redefines the formula for determining the employee’s compensation in the event of dismissal without cause. The general rule of one monthly salary per year of work is maintainedbut it brings with it fundamental changes for himThe best monthly salary is determined mathematically, normal and customary for the past year, with limits based on the applicable agreement.
The compensation is limited to a maximum of three times the average salary of the respective collective agreement. And it can never be less than full salary.
In addition, it allows employers to set up shop Severance Fund to regulate this compensation and reiterates that this compensation is the only possible remedy, excluding parallel civil claims.
Specifies that annual leave must be granted between October 1st and April 30th. However, the parties can agree on dates outside this period. The employer must give notice of the appointment 30 days in advance.
It is possible to agree on a split of the holiday over at least 7 days, a possibility that is used in practice for some activities. In addition, every employee must take vacation in the middle of the summer season at least once every three years.
The procedure is also regulated in the event of interruptions due to illness requires rescheduling of outstanding days.
The formation of the so-called “hour banks” This allows the parties to agree on a compensation arrangement for the “over time” of the employee whenever A minimum rest period of 12 hours is observed legal (between working days and weekly rest). This system would allow time to be compensated within the working day without incurring traditional overtime, for example by agreeing to reduce the workload during times of lower demand or generating compensatory francs.
The reform defines exactly what it takes into account compensation or salary. There is also the possibility that these can be deposited Pesos or foreign currency and part in kind.
On the other hand, it includes the concept of “dynamic salary”, which can be agreed in collective, regional or company agreements and even as a unilateral act by the employer as compensation for the employee’s “personal” merits or productivity. The unions are aware that this mechanism could lead to the violation of the salary floor established in the negotiation of the activity agreement.
The requirements for proof of disability are specified. The requirement is established that medical certificates must contain a specific diagnosis, treatment and number of days of rest. In addition, they are expected to be issued by qualified medical personnel.
The requirement for a medical committee in the event of disagreements between experts is regulated.
The employee’s obligation to maintain employment continues for an employee who suffers a permanent reduction as a result of an accident or illness. However, the salary reduction is made possible so that it corresponds to the new category and working time conditions.
The employer’s requirement Provide advance notice during the probationary period.
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