21 Dic 23 Significant changes in the regulatory framework of labor laws in Argentina

Agustín Cerolini, Matías Ferrari, Natalia Artmann, Valentina Circolone and Roman Katz Catz

Through Decree No. 70/2023, published on December 21, 2023, the National Executive Power (the «PEN») implemented significant changes in the regulations related to the different labor laws.

Below, the most relevant measures:

Law 24,013:

• employee registration is simplified. Previously, the registration was required in the employment Contract Law book (the «LCT»). The registration must be simple, immediate, expeditious, and carried out through electronic means. The concept of social work is eliminated in order to give the worker the possibility to choose the health care system.

Law 20,744:

• It removes from the scope of application contracts for works, services, agency and all those regulated in the Civil and Commercial Code of the Nation (the «CCCN»). It also limits the presumption of the existence of an employment contract when contracting works or professional or trade services and the corresponding receipts or invoices are issued.
• The trial period in contracts of indefinite duration shall be extended from three (3) to eight (8) months and it shall not be compulsory to register the employee until the end of this period. The receipt shall be prepared by the employer and a true copy of the original shall be given to the employee, which may be electronically implemented. The filing and other proofs of payment may be digitalized, with the same validity as in paper format.
• Pre-birth leave may be reduced from 45 days to 10 days at sole the choice of the female staff member or pregnant employee. The balance of the total period of leave shall be cumulated with the period of leave following childbirth
• The following situations are established as justification for dismissal with just cause when: a) The freedom to work of those who do not adhere to the measure of force by acts, intimidation or threats is affected. b) The entry or exit of persons and/or things to the establishment is totally or partially prevented or obstructed. c) Damage is caused to persons or things belonging to the company or to third parties located in the establishment or that they are improperly retained. The employer must first give notice to the employee to cease such behavior.
• As regards severance pay for length of service or dismissal, the amount of one month’s salary shall be paid for each year worked or fraction of more than three months after having completed the probationary period (eight months). The calculation does not take into account the complementary annual salary. In the case of workers paid on commission or with variable remuneration, the average of the last six months or of the last year, if this is more favorable to the employee, will be calculated. However, the DNU takes into account the ruling «Vizzotti», indicating that the basis of calculation may not be less than 67% of a monthly salary.
• The DNU also provides for alternatives to replace severance pay: by collective bargaining agreement, the parties may replace the severance regime with a severance fund or system, which will be governed by a contribution to be paid by the employer that may not exceed eight per cent of the remuneration. Employers may contract a private system in order to cover severance costs.
• In the event that an employee has been reinstated, the amount paid, updated by the IPC (consumers price index) plus an interest rate of 3% per annum, will be deducted on account of the previous termination. Section 276 of the LCT is also modified since the labor credit will be updated to a maximum of the amount resulting from calculating the historical capital updated by the IPC plus 3% annually.
• Section 277 establishes that PYMEs (small and medium-sized enterprises) facing a condemnatory court judgement may opt for full payment in a period of up to twelve consecutive monthly instalments, which will be adjusted according to the regime established in section 276.
• Regarding trade union associations the prohibition to affect the freedom to work, cause blockades, take over establishments or cause damage to people or things belonging to the company or third parties is incorporated

Teleworking:

• Reversibility is provided for, that is to say, the exclusive right of the worker to request the reversibility of teleworking is rendered null and void, establishing that such reversibility may be implemented by common agreement between the parties.
• With regard to transnational benefits, it is stipulated that the teleworking contract shall be governed by the law of the place where the worker performs the tasks

Finally, articles 8 to 17 and 120, paragraph a), of Law 24,013 on «Employment»; article 9 of Law 25,013 on «Labor Reform»; Law 25,323 on «Labor Compensations»; articles 43 to 48 of Law 25,345 on «Tax Evasion»; article 15 of law 26,727 «Agrarian Labor Regime»; and article 50 of law 26,884 «Special Regime of Labor Contract for House Workers» are eliminated.