Argentina: Regulations of Argentina’s New Labour Reform

On 26 September 2024, Decree 847/2024 (the “Decree”) was published, regulating certain aspects of the labour reform established by Law 27.742. Specifically, the Decree regulates:

(i) the labour amnesty for private sector employees;

(ii) the probationary period;

(iii) the severance fund; and

(iv) self-employed workers.

 

Labour amnesty

The Decree sets forth that only the labour relationships initiated prior to 8 July 2024 (date of enactment of Law No. 27.742) and that are still in force at the time of filing for the labour amnesty can access this benefit.

The amnesty will apply regarding obligations accrued up to 31 July 2024 and in respect to unregistered employment relationships or poorly registered relationships (defective registration of entry date or salary). Items that were illegally reported before the tax authorities as non-salary benefits cannot be regularized.

The regularization will have the following benefits:

(a) the extinction of the criminal action provided for by Law 27.430, including infringements, fines and sanctions of any nature corresponding to such regularization, to the extent that there is no final judgment; and

(b) the debt forgiveness of certain social security obligations, including the National Social Security System established by Law No. 23.660 and the Occupational Risks System established by Law No. 24.557, in the following percentages:

i. Micro and Small Enterprises and non-profit entities: NINETY PERCENT (90%).

ii. Medium-sized companies, section 1 and section 2: EIGHTY PERCENT (80%).

iii. Other employers: SEVENTY PERCENT (70%).

 

The percentage of debt forgiveness shall be ONE HUNDRED PERCENT (100%) with respect to the National Health Insurance System Regime, provided for in Law No. 23.661 and the Occupational Risks Regime provided for in Law No. 24.557.

The benefits of the amnesty shall be applicable to the extent that the employer pays the debt that has not been waived under any of the following modalities:

(a) Payment in cash, under the conditions established by the FEDERAL ADMINISTRATION OF PUBLIC REVENUE (AFIP), in which case the debt that has not been waived shall be reduced by FIFTY PERCENT (50%), or

(b) Through the Payment Facilities Plan that, for these purposes, the AFIP may establish, establishing the maximum number of instalments, the applicable interest rate and the percentage of the payment to be paid up front.

 

The period included in the regularization shall be considered as time of service and shall be considered for the purposes of crediting:

(a) The minimum number of years required for the attainment of the mandatory pension plan (Universal Basic Benefit);

(b) For access to the Transitional Disability Retirement Benefit or the Death Pension; and

(c) The time of service required to access the unemployment benefits.

 

Probationary period

The increase of the trial period from 3 to 6 months shall be applicable to employment relationships initiated on 9 July 2024, when Law 27.742 entered into force.

 

Alternative Severance Compensation Systems

The Decree regulates the Alternative Severance Compensation Systems (the “Alternative Severance System”) as an alternative regime to be agreed-upon within the framework of the Collective Bargaining Agreements.  The Alternative Severance System substitutes the severance payment for seniority provided for in section 245 of the Employment Contract Law No. 20.744, as well as any other indemnity item whose calculation takes the referred severance payment as a parameter, including, but not limited to, severance compensation for dismissal without cause, for constructive dismissal, for dismissal due to force majeure, for termination due to death of the worker, for retired worker, among others.

The Alternative Severance System to be agreed upon shall determine the causes, facts and/or conditions under which compensation shall be paid to the worker upon termination of the employment relationship.

In turn, it shall define the amount of the payments to be paid to the worker in each case and the modalities of payment.

In all cases, differential treatment shall be established in favour of the worker dismissed without just cause.

Likewise, the Alternative Severance System may contemplate the use of severance funds and/or the use of collective or individual insurance that must comply with the requirements of the Decree.

The Collective Bargaining Agreement shall provide that, at the beginning of a new employment relationship, the employer and the employee shall agree whether to be governed by an Alternative Severance System or by the severance compensation provided for in the Employment Contract Law No. 20.744.

The option agreed between the employer and the worker may only be modified by written agreement of both parties. Collective Bargaining Agreements may establish multiple severance fund systems, complying, in any case, with the requirements of the Decree, being able to agree on Alternative Severance Systems with different conditions, modalities and amounts according to the type and characteristics of the company, activity or subsector, complying at least with the conditions set forth in the Decree.

The payment to the worker of the sums resulting from the Alternative Severance System shall have the full, total and definitive cancellation effect of the indemnities/severance compensation that they replace.

In the case of employment relationships that began prior to the entry into force of the Alternative Severance System agreed in the Collective Bargaining Agreement, the parties may mutually agree to change to the Severance Pay System. The Collective Labour Agreement may determine a special regime for these workers.

The Decree provides the following options for Alternative Severance Systems:

(a) Individual cancellation system

(b) Individual or collective severance fund system

(c) Individual or collective insurance system

The amounts in lieu of severance payments paid to employees under the Alternative Severance Systems shall be treated for Income Tax purposes in the same way as the severance compensation provided by Labour Contract Law.

Regardless of the existence or not of an Alternative Severance System, employers may hire an insurance policy for the purpose of fully or partially insuring the amount of the severance payable for a dismissal under Section 245 of the Employment Contract Law No. 20.744, as well as any other indemnity item whose calculation takes the aforementioned indemnity as a parameter.

 

Self-employed workers

The self-employed worker may have the collaboration of up to THREE (3) self-employed workers collaborating under the regime of Article 97 of Law No. 27.742 that will not be considered under an employment relationship.

All of them must not be registered as employees before the tax authorities and must file a sworn statement to the tax authority (AFIP) that they are under a non-labour relationship.

Self-employed workers may have an accident coverage insurance.

The relationship between the self-employed worker and the collaborating self-employed workers shall have the following characteristics:

(a) The possibility for the collaborating self-employed worker to carry out activities simultaneously may not be limited or restricted. The collaborating self-employed worker shall also be free to enter into contracts of collaboration, employment or provision of services with other contractors at the same time.

(b) Either party may terminate the partnership at any time.

(c) The self-employed worker may not maintain in force simultaneously contracts with more than THREE (3) self-employed workers collaborating under this modality.

It shall not apply when it is presumed that an employment relationship in a relationship of dependence has been replaced by a relationship between the parties with a different legal framework.