Argentine court suspends labor reform provided for in Milei39s decree

Argentine court suspends labor reform provided for in Milei's “decree G1

Milei sends a package to Congress in which he decrees a state of emergency until 2025

The Argentine Labor Court decided on Wednesday (3) to suspend part of the “decree” of Javier Milei, the country's current president. The decision applies to measures related to Milei's proposed labor reform (see below).

The changes to the work rules that Milei wants to implement were considered controversial in the country. Among the changes that unions most disliked were the extension of the probationary period to eight months, participation in demonstrations as a legal reason for dismissals and changes in the compensation system for professionals leaving a company.

The labor court's decision is precautionary. There is still a debate about which court is appropriate to hear this matter. The Labor judges said the measure would be stayed until the question of the appropriate forum was resolved.

The lawsuit was filed by an Argentine union with the labor court.

Milei explains that the changes to the work rules he proposes represent a modernization.

The reform will make it easier and cheaper for entrepreneurs to lay off employees. Nowadays, employees cannot be fired for any reason and receive compensation when they leave the company.

As in Brazil, there is a probationary period of three months. If the company decides to dismiss the employee before this trial period, it will not have to pay any compensation. According to Milei's proposal, this time should be extended to eight months.

Another rule that can be changed is a fine that the company must pay if it does not report the employee correctly. Milei wants to put an end to this punishment.

The Decree of Necessity and Urgency (DNU), announced on December 20, aims to reform or repeal more than 350 regulations.

Among other things, the decree deregulates satellite internet service and private medicine, makes the labor market more flexible and repeals a number of national laws. The measures also include the transformation of several stateowned companies into jointstock companies, which will facilitate the privatization process of these institutions.

The measures announced by Milei include:

  • Repeal of the Rent Act.
  • Repeal of the Supply Act.
  • Repeal of the Gondola Law.
  • Repeal of the national procurement law.
  • Revocation of the Price Observatory of the Ministry of Economic Affairs.
  • Repeal of the Industrial Promotion Act.
  • Repeal of the Trade Promotion Act.
  • Repeal regulations that prevent the privatization of public companies.
  • Repeal of the state enterprise regime.
  • Conversion of all stateowned companies into jointstock companies for their subsequent privatization.
  • Modernization of the labor system to facilitate the process of job creation.
  • Reform of the Customs Code to facilitate international trade.
  • Repeal of the land law.
  • Changes to the Fire Fighting Act.
  • Abolition of sugar factories' production obligations.
  • Publication of the legal regime applicable to the wine sector.
  • Abolition of the national mining trading system and the mining information bank.
  • Approval for the transfer of all or part of the share package of Argentine airlines.
  • Implementation of the Open Skies policy.
  • Amending the Civil and Commercial Code to strengthen the principle of freedom of contract between the parties.
  • Amending the Civil and Commercial Code to ensure that contractual obligations in foreign currencies are paid in the agreed currency.
  • Changing the regulatory framework for prepaid medicines and social benefits.
  • Elimination of price restrictions in the prepaid industry.
  • Incorporating prepaid medical companies into the social work system.
  • Introduction of electronic doctor's prescriptions.
  • Changes to regulations for pharmaceutical companies to promote competition and reduce costs.
  • Changes to company law to allow football clubs to become corporations.
  • Deregulation of satellite internet services.
  • Deregulation of the tourism sector.
  • Integration of digital tools for vehicle registration procedures.