The Argentine Chamber of Deputies approved in the early hours of this Friday (20) the labor reform project proposed by President Javier Milei, which could re-enter the country into the global market.
The text underwent some modifications and will now return to the Senate for final approval. The Labor Modernization Law was approved in the Chamber by 135 votes in favor, 115 votes against and no abstentions.
The project had already obtained the green light from the Senate on the 11th, where it will return for its definitive sanction after the government agreed to eliminate one of the articles that generated the most controversy among congressmen, which deals with sick leave and defended the reduction of sick workers’ salaries from 100% to 75% or 50%, depending on the case.
The article provided for this reduction in social coverage for workers who suffered health problems as a result of activities outside of work, for example, when playing sports in their free time and ending up in an accident.
Among those who voted against the initiative, Sergio Palazzo, from the Peronist Union for the Fatherland bloc, declared: “They smuggled, behind the words ‘labor modernization’, the most brutal regression of workers’ rights that the Argentine people have ever known.”
Before this Friday’s vote, the congressman declared that the project should be prosecuted as it involves a series of unconstitutional points. “We will see a cascade of unconstitutionality requests in the courts,” he said.
Among the central points of the project is a new calculation basis for dismissal compensation, which, in practice, will mean a reduction in values. It is also proposed to create a bank of overtime, which would be granted as free time, but would not be paid.
The rule also limits the right to strike by increasing the number of activities considered essential, required to operate with at least 50% or 75% of minimum services, as applicable. Furthermore, it classifies as “very serious” infractions the blocking or occupation of establishments and actions that affect the freedom to work of those who do not join a strike.
In a statement, the government described the law as “one of the structural reforms promised by Javier Milei and which aims to put an end to more than 70 years of delay in Argentine labor relations.”
“The approval of the law means the creation of formal jobs, less informality, labor standards adapted to the 21st century, less bureaucracy, greater dynamism in labor relations and, most important of all, the end of the litigation industry in the Argentine Republic”, said the text shared on the Presidency’s profile on the social network X.
Voting day is marked by general strike and street clashes
Before the vote, which began on Thursday, hundreds of demonstrators gathered in front of the Argentine Congress to protest against the recently approved labor reform project, simultaneously with a general strike to repudiate the initiative promoted by Javier Milei’s government.
The country’s largest trade union federation, the General Confederation of Labor (CGT), called a 24-hour strike that affected hundreds of flights and paralyzed buses, taxis and trains, leaving the streets of Buenos Aires practically deserted.
The protests ended in clashes with the police. The incidents began when a group of protesters tried to tear down one of the fences placed around Congress, at a time when the Chamber of Deputies was debating the labor reform project.
Security forces responded with water jets, pepper spray and tear gas. The clashes ended with arrests and injured people.
Understand the main changes proposed by the labor reform
The current labor legislation in Argentina dates back to 1974 and each attempt at reform has met with strong social resistance over the last few decades.
For advocates of the reform, the current legislation is outdated and does not address reality and its changes over the decades, such as the significant advances in computing and other technologies in the job market.
- Reduction of litigation in court
One of the central points of the reform proposed by Milei aims to reduce the number of labor cases that reach the courts. With this, the text argues that agreements made between workers and employers, signed before the judicial system or a labor authority and approved, will have the same value as a final sentence.
The measure would prevent these cases from being reopened in court, which aims to reduce litigation. Limits are also being imposed on attorney and expert fees.
- Expand formalization of work
The project seeks to increase the formality of work in Argentina through the creation of the Labor Formalization Incentive Regime (RIFL), a one-year program. According to the newspaper La Nacion, for each new employee, the employer will pay smaller employer contributions (just 8%, including the 3% allocated to the Compensation Fund).
The proposal also eliminates fines for lack of labor registration, creates mechanisms for regularizing relationships with employees in an unregistered or precarious situation, eliminating fines, debts and criminal charges, and prohibits hiring under the self-employed regime.
In relation to some services, such as app driver, the project defines a new category of work and allows flexible contracts. The initiative establishes that this relationship does not constitute an employment relationship,
but rather an independent service provision contract.
- Flexibility of working hours and limitation of strikes
The reform, which still needs final approval from the Senate, also makes working hours more flexible, opening up the possibility of extending working hours from 8 to up to 12 hours, as long as the minimum rest period of 12 hours between shifts is respected.
The project creates the “hour bank” category, which gives workers the possibility of compensating additional working hours with time off or with a remuneration system, which must be agreed with the employer. The measure also extends the trial period to up to six months, reaching eight or 12 in some cases, with reduced compensation.
The text establishes minimum operating percentages during strikes, depending on the type of activity. Services considered essential must guarantee coverage of 75%.
The proposal also creates the so-called “dynamic salary”, which provides for variable remuneration based on productivity or merit.
