Argentina: The End of the Double Severance Compensation
Author: Nicolás Grandi
On 30 June 2022, the last phase of the gradual reduction of the double severance compensation for dismissal without cause will come to an end.
Executive Order No. 886/2021, published in the Official Gazette on 24 December 2021, which provided for the extension of the public emergency in occupational matters until 30 June 2022, also established the reduction of the double severance compensation, while always respecting the cap of AR$ 500,000, in three stages:
- From 1 January 2022 to 28 February 2022: an extra 75% severance compensation should be paid.
- From 1 March 2022 to 30 April 2022: an extra 50% severance compensation should be paid.
- From 1 May 2022 to 30 June 2022: an extra 25% severance compensation should be paid.
Therefore, the 31st of December 2021 was the last day of both the prohibition of dismissals without just cause –established by Executive Order No. 423/2021– and the double severance compensation – pursuant to Executive Order No. 34/2019 – leading to a transitional period.
Key Action Points for Human Resources and In-house Counsel
Thus, as this period is about to expire as of 30 June 2022, not only will it be possible to terminate employment relationships without cause, but it will also be possible to terminate such employment without having to pay the increased severance payment.
