Argentina's Senate Poised to Approve Major Labor Law Overhaul
Argentina's Senate is preparing to approve a significant overhaul of the country's labor laws, aiming to weaken trade unions and reduce labor costs for businesses.
The government of President Javier Milei states that the initiative is intended to help revive formal employment in Argentina. Official figures indicate a loss of 290,600 registered jobs between December 2023 and November 2025. Opponents of the measure, however, argue that it will neither increase employment nor enhance job quality. Currently, informal employment affects over 43% of workers in the country, marking its highest level since 2008.
Key Provisions of the "Labour Modernisation Act"
The proposed "labour modernisation act" includes several major changes:
- Cuts to severance pay.
- Extension of the maximum working day from eight to 12 hours, while maintaining a 48-hour weekly limit with a mandatory 12-hour rest period.
- Enabling companies to negotiate directly with employees, potentially overriding sector-wide collective agreements.
- Reduction of dismissal costs through a state-partially financed severance fund and exclusion of bonuses from compensation calculations.
- Elimination of specialized national labor courts.
- Introduction of an "hour bank" system that limits overtime pay.
Contrasting Views on the Reform
Senator Francisco Paoltroni from President Milei’s ruling party, La Libertad Avanza (LLA), characterized the bill as "pro-business, pro-employment and pro-employee," and "anti-trade union and anti-labour lawyers."
Conversely, labor lawyer Juan Manuel Ottaviano described the bill as "unconstitutional," stating it "imposes severe limitations on individual rights in the workplace and weakens their protection through trade unions."
Legislative Progress and Notable Amendment
The bill has already passed both houses of Congress and now returns to the Senate following an amendment in the lower chamber. This amendment removed an article that would have reduced wages during sick leaves, including for life-threatening conditions, which had faced widespread repudiation.
Economic Context and Public Reaction
The legislative debate coincides with significant challenges in Argentina's manufacturing sector, where factories are operating at 53% of installed capacity amid import liberalization and weak domestic demand. The 86-year-old tyre manufacturer Fate recently announced its closure, highlighting the sector's struggles.
Alejandro Assumma, a worker and union representative, stated that the reform "means more exploitation and fewer rights."
Martín Rappallini, head of the Argentine Industrial Union (UIA), which participated in drafting the bill, acknowledged that it "won't create jobs overnight" but would provide "predictability for labour relations."
Protests and clashes have occurred during the congressional debate, with police using rubber bullets against demonstrators and journalists. Some protesters threw a molotov cocktail. The General Confederation of Labour (CGT), the country's main trade union confederation, called a general strike.