Argentina: Double compensation and prohibition of dismissals extension regarding dismissal without justified cause
On January 23, 2021, Decree 39/2021 was published, extending until December 31, 2021 the public emergency on occupational matters declared by Decree Nº 34/2019. In this regards, Decree 39/2021 also extends until December 31, 2021 the duplication of severance payment in case of dismissal without justified cause. Duplication involves all the severance compensation items derived from dismissal without cause but is now capped to a maximum amount of $ 500,000 (U$$ 5,300 approx.). Additionally, duplication will be applicable in case of constructive dismissals pursuant to section 246 of Labour Contract Law 20,744.
The Decree also extended the prohibition of dismissals: (i) without justified cause; or (ii) due to lack or reduction of work and force majeure, for a period of 90 days as from its deadline (i.e. the prohibition is now extended until April 29, 2021).
The Decree also extended the prohibition of unilateral furloughs on grounds of force majeure, or lack or reduction of work, also for a period of 90 days as from its deadline (i.e. the prohibition is now extended until April 29, 2021).
Exceptions to this prohibition are the furloughs in the terms of Section 223 bis of the Labour Contract Law, this is, furloughs agreed with each employee or the union, approved by the labour authority, for those employees that shall not perform any tasks, due to lack or reduction of work (not attributable to employer) or force majeure (dully evidenced).
The Decree provides that any dismissals and furloughs in breach of the provisions of this Decree shall have no effect, and the labour relationships and its terms and conditions shall remain in force as before.
Duplication will not be applicable to the personnel hired after December 13, 2019 nor the national public sector.
Prohibition of dismissals is not applicable to employees hired as from December 13, 2019 nor the national public sector.
For more information on these articles or any other issues involving labour and employment matters in Argentina, please contact Nicolás Grandi (Partner) of Allende & Brea at ngrandi@allende.com or visit www.allende.com.
