dmo@lorentelopez.com
Today, Emergency Decree No. 70/2023 (hereinafter, the “DNU”) was published in the Official Gazette , establishing various economic and social measures, notably those that amend Argentina’s labor regime, which will be summarized in this bulletin.
First and foremost, it is worth noting that the Emergency Decree has taken effect as of 12:00 a.m. today, without prejudice to its subsequent ratification (or non-ratification) by the Chamber of Deputies or the Senate. In exceptional circumstances, the Supreme Court of Justice could invalidate it through a judicial ruling.
Specifically, the most relevant points related to employment are as follows:
1) Fines for unregistered or non-compliant employment are eliminated: This measure aims to reduce the amount of labor claims exponentially and ensuring that the amount of the fine is not left in the hands of the worker. Notwithstanding this, the DNU established that in the event that a final court ruling establishes the existence of unregistered or substandard employment, the tax collection agency will be notified so that it may set a fine with reasonable interest—and possibly a payment plan—and impose it on the employer found liable.
2) Termination by mutual agreement under Article 241 of the Employment Contract Law now confers “unemployment” status for the worker, meaning they may apply for the corresponding benefits and may also submit their case for approval to the competent agency—a situation that was not possible before and left open the possibility of a a claim.
3) The precept that “whoever alleges a fact must prove it” is upheld; therefore, the principle of “indubio pro operario”—which calls for applying the rule and/or interpretation most favorable to the worker, will apply following a thorough investigation and presentation of evidence on the worker’s part.
4) The simplified tax system now plays a prominent and substantive role in terms of its interpretation, since since, following the enactment of the DNU, contracts under this system will no longer be “presumed to be fraudulent,” as professionals, contractors, service providers, and tradespeople will be able to issue the corresponding invoices and receipts for the work performed without this being considered—prima facie—unregistered work.
5) Temporary staffing agencies will be solely responsible for their workers—meaning that direct employer solidarity will virtually cease to exist—unless the company using the temporary staffing services fails to verify that the principal employer is making the required social security contributions. Workers may even request that the agency withhold any contributions that the principal employer has failed to make.
6) The fine established in Article 80 of the Employment Contract Law is waived, provided that provided that they are made available through the digital means to be established, or are posted on the ANSES website.
7) The probationary period is extended from 3 months to 8 months, while the existing duties and obligations remain in effect.
8) Finally, after many requests, the option to issue electronic pay stubs has been established. It remains to be seen whether the term “electronic” actually refers to the possibility that they may not include a digital signature; this will likely be clarified in the future. Remember that there are two types of signatures: electronic and digital (indisputable). We invite you to contact us so we can explain the difference between the two.
9) The pre-delivery leave policy is amended; it may be 10 days, provided that the employee requests it.
10) The workday schedule is modified through a collective bargaining agreement, allowing for workdays that differ from those established and may be set in accordance with the company’s business activities and needs, company, but always respecting the 12-hour rest period. It is also possible to establish a system of hours worked in advance, compensatory time off, etc., so that the workday can be adapted to the employer’s needs.
11) The rules and standard of proof for dismissal for cause are amended (Art. 242 of the Labor Code). In essence, the evidence must be evaluated with greater caution, and the blockade or occupation of a facility that prevents the continuation of work within the company is established as just cause for dismissal. Likewise, dismissal is justified if there is an intent to infringe upon the freedom to work of those who do not wish to participate, if entry or exit is prevented, or if damage to company property is caused, etc.
12) The severance pay provisions of Article 245 of the Labor Code (dismissal without cause) could be replaced by a severance fund or another system if the collective bargaining agreement so provides. For the calculation compensation, the Special Annual Bonus (SAC), bonuses, and/or semi-annual or annual bonuses. An increased compensation amount was also established for dismissals based on discriminatory acts of any kind, ranging from 50 to 100 percent of the amount specified in Article 245 (based on seniority). It is worth noting that individuals and legal entities governed under Law 24,467 (SMEs) may pay a final court judgment in up to 12 installments, plus interest equal to the CPI plus 3% per year.
13) If the employee returns to work, all amounts already paid for any reason will be recognized—and credited—toward future severance pay, adjusted adjustment based on the CPI plus 3% per year.
14) A NEW SYSTEM FOR ADJUSTING AND REVALUING LABOR CLAIMS is established; in other words, it appears that the Emergency Decree (DNU) repeals Resolution 2764—which allowed for annual capitalization of claims from the date of service of the complaint—and replaces it with a system based on the CPI plus 3% per year. The key change is that this rate will also apply to preventive reorganization proceedings and/or bankruptcy cases.
15) Special regime for self-employed workers with up to 5 other self-employed workers. This special regime must be regulated to define the scope of the services or tasks they perform.
16) Significant amendments and provisions have been added to the law on labor unions, as well as provisions regarding telework, domestic work, and agricultural work; therefore, we invite you to contact us for further details.
In light of the numerous reforms set forth in the aforementioned DNU, we invite you to contact our attorneys for more information on this matter.
