Opposition in the streets of Argentina to the new labor law
On Thursday, December 18, large demonstrations took place in the main cities of Argentina, with the epicenter in Buenos Aires, against the so-called "Labor Modernization Law" that the neoliberal president Javier Milei sent to Parliament.
Under the slogan "In defense of work and dignity," in a document read in Plaza de Mayo, the convening trade unions denounced that the project is a recipe from the 70s and 90s that already failed in 2001 and that the regulations seek to transform wages into an adjustment variable to maximize corporate profitability.
The text places special emphasis on three technical points that they consider the end of social justice:
The Bank of Hours: It is denounced as the "destruction of the boundary between life and work", by allowing companies to use the worker's time according to peak demand without paying surcharges.
Employment Termination Fund: They describe it as "financing the dismissal by the worker himself", eliminating the deterrent effect of compensation.
Payment in Kind: They warn that the return of non-remunerative concepts (such as the old "food vouchers") defunds the pension system and health (social works).
Furthermore, they denounce a deliberate attempt to dismantle the workers' organization by prioritizing company-level agreements over industry-wide agreements, which fragments bargaining power; limiting assemblies and solidarity contributions, seeking to defund unions; and restricting the right to strike by declaring almost all activities as "essential," which they consider a violation of ILO conventions.
Finally, the General Confederation of Labor (CGT) and the two Workers' Central Unions of Argentina (CTA) declared themselves in a "state of permanent mobilization," warning that if Parliament proceeds with the sanction, the response will be an indefinite National Strike.
Key aspects of the so-called “Labor Reform” promoted by the government of Javier Milei:
1. Flexibility in Entry and Exit
Extension of the probationary period: It is generally extended to 6 months (previously 3). During this time, the employer can terminate the contract without cause and without entitlement to compensation. For SMEs, extensions of up to 8 or 12 months have been discussed, depending on the size of the company.
Severance Fund: Companies are now permitted, through collective bargaining agreements, to replace traditional severance pay with an individual or collective capitalization system (a monthly contribution of 3% of salary). This shifts the cost of dismissal to a pre-existing fund, eliminating the "seniority-based severance pay." Since the government allows employers to deduct this 3% from employer contributions that currently go to the Argentine Integrated Pension System (SIPA), administered by ANSES, the money intended for pensions would be deposited into an account (trust or investment fund) earmarked for paying future severance packages, further defunding public pension funds.
2. Changes to Working Hours and Rest Periods
Time Bank: This allows for the compensation of hours between shifts. Companies can require extended shifts during peak demand and compensate them with time off or reduced hours afterward, avoiding traditional overtime pay as long as the 12-hour rest period between shifts is respected.
Splitting Vacations: Annual leave may be divided into segments (minimum of 7 days). The employer must guarantee summer vacation at least once every three years.
3. Dismantling of Wage Protection
Dynamic Remuneration Components: A category of "productivity bonuses" is created that can be unilaterally eliminated without being considered "acquired rights" by custom.
Payment in Kind: The limit for paying part of the salary in goods, services or foreign currency is made more flexible.
4. Limitation of Union Action
Restriction on the Right to Strike: The list of "essential" and "critical" services (health, education, transport, logistics, digital commerce) is expanded. These sectors must guarantee between 50% and 75% of effective service provision during strikes.
Penalty for Blockades: Blockades or takeovers of establishments are classified as "serious workplace injury", being an objective cause for dismissal without compensation.
