Argentina: Temporary Prohibition of Dismissals due to COVID-19 Emergency Applies to Employees in Trial Periods
The Labour Court of Argentina rules that employees under trial period are also included in the temporary prohibition of dismissals due to COVID-19 emergency
On 28 April 2020, in re: “YORI, Melisa c/ ADECCO ARGENTINA S.A. s/ Medidas Cautelares y preparatorias”, the Labour Court of Argentina nullified the dismissal of an employee who was dismissed during the trial period, and ordered both the reinstatement of the employee to her job and payment of pending wages since the dismissal took place. The Court ruled that said dismissal violated Decree 329/2020 (enacted during the COVID-19 emergency) that temporarily prohibits dismissal without good cause.
Argentine labour law provides a 3-month trial period in respect to those employees who are hired under an indefinite term contract. During the trial period, the employer can dismiss employees without paying severance compensation (except for a 15 day prior notice of dismissal).
On the other hand, Decree 329/2020 temporarily prohibits dismissals: (i) without good cause; or (ii) due to lack or reduction of work and force majeure, for a period of 60 days (e.g. until 31 May 2020). The Decree provides that any dismissals in violation of those provisions shall have no effect, and the labour relationships, and their terms and conditions, shall remain in force as before.
In this particular case, the Argentine Labour Court ruled that the dismissal was null, because it took place during the period of prohibition on dismissals, provided by Decree 329/2020. The Court determined that Decree 329/2020 is a special legal provision that was enacted for the COVID-19 emergency period therefore, such provision must prevail over the general labour provisions regarding trial periods, applicable in normal times.
The Argentine Labour Court also ruled that even though the Decree temporarily prohibits dismissals without good cause and does not expressly prohibit terminations during trial periods, Section 9 of the Employment Contract Law 20,744, provides that in case of doubt as to whether a legal provision should, or should not, be applied to a particular case, the courts must rule in favor of the employee.
These circumstances led the Argentine Labour Court to conclude that, although there is a principle of freedom of contract, with the consequent right to terminate employment without cause and without paying compensation during the trial period, in the extraordinary context of the COVID-19 emergency, the protection of employees must prevail.
The Argentine Labour Court ordered the reinstatement of the employee to her job for the next 60 days or until the prohibition on dismissals period lapses.
Therefore, even though the Decree does not expressly prohibit termination of employees during trial periods, there is a risk that employees may claim reinstatement, in case they have been dismissed during the temporary prohibition on dismissals in place until 31 May 2020, due to the COVID-19 emergency situation.
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