Argentina is known for mate, football, and asado, but also for its powerful workers’ movement. The latter has become stronger and larger over the decades, driving significant improvements in labor rights.

Key to the unions’ task is salary negotiations. With yearly inflation running at 289%, regular raises are essential — but it can get technical, fast. So if you’re getting your trigger clauses confused with your advance payments on future increases, read on.

Paritarias

Salaries are only one part of a broader labor conditions negotiation known as reuniones paritarias. “In Argentina, collective negotiations prevail over individual ones, unlike in other countries such as the United States, where this is uncommon,” said Juan Manuel Ottaviano, a labor lawyer at the National University of San Martín and the policy research center Fundar.

But what do collective negotiations entail? In Argentina, most jobs are represented by a union, which is formally recognized by both employers and the state. Unions and employers negotiate salaries and labor conditions, with the state moderating those talks and formalizing the resulting agreement. This is why they are called paritarias: it’s a meeting between pares, equals. The resultant agreements apply to all that sector’s employees, unionized or not. These negotiations can be national or provincial, depending on the sector.

Although there can be more than one union per working sector, only one is formally authorized to participate in collective labor negotiations. That union has the personería gremial within that specific sector because it has the most members, meaning it is the most representative one.

“This is a centralized collective negotiation model,” Ottaviano said. “That negotiation prevails over the Labor Contract Law. Labor conditions — known as convenio colectivo de trabajo — from a certain sector can only improve compared to what the Labor Contract Law states,” he explained. “This gives unions great social power,” he added.

Individual companies can also offer different working conditions, but they have to be better than the ones established during paritarias. 

Argentina’s model, which has been in place since the 1950s, is very similar to the one used in Uruguay, Canada, France, Spain and Scandinavia. In decentralized models — used in the United States, Brazil, or Chile, among others — each company establishes labor conditions, which can be worse than the sector’s established conditions, or unions can make labor agreements that only benefit unionized workers. In the U.S., unlike in Argentina, unions are typically limited to individual companies.

How do labor negotiations work?

How do these centralized labor negotiations happen? When unions and employers wish to discuss labor conditions, the Labor Secretariat (Labor Ministry, until December) calls a meeting. Increases are typically agreed as a series of percentages in specific months. So, if inflation is expected to reach 100% in a given year, a union may negotiate four 25% increases, taking January as a base, in March, July, September, and December.

Although these meetings can address specific labor conditions, updating salaries has become increasingly prevalent in recent years due to sky-rocketing inflation.

Not all paritarias are born equal: some sectors, like the oil industry or truck drivers, may negotiate pay rises that beat inflation if their union leaders are particularly influential, their workers have a strong bargaining position, or pay has fallen behind inflation after the previous negotiations. More often, they do not fully keep pace with inflation.

For instance, the last oil industry paritaria in April determined the workers’ minimum wage is AR$1.2 million a month — they had a 76% salary increase in the first four months of 2024. The current general minimum wage in Argentina is AR$234,315. “This has to do with the real damage those sectors can cause if they take industrial action,” said Mariana Amartino, Secretary General of the Association of Labor Lawyers. “When you cut the food distribution chain, the general public directly feels the effects of those measures and the Labor Secretariat and the industry chambers have more urgency to solve the conflict.”

If the parties can’t reach an agreement, the union may decide to go on strike, or take other industrial action. The Labor Secretariat can require the parties to return to the negotiating table until a solution is reached, in a process known as conciliación obligatoria.

“When a union announces a strike, employers often take reprisals, so when the secretariat decrees obligatory conciliation, they have to return things to how they were before — so firings have to be reversed, and so do direct action measures,” Amartino explained.

Trigger clauses

If the economic circumstances change — if inflation is significantly higher than expected, for example — parties may return to the negotiating table. This is known as “re-opening” labor condition talks (reabrir las paritarias). They often involve negotiating what conditions could lead to fresh pay rises or another round of negotiations. These conditions are known as trigger clauses (cláusulas gatillo).

“If salaries are pulverized in two months, then, well, the situation has changed,” Amartino said.

The parties may agree to bring forward part of a future increase (an adelanto a cuenta de futuros aumentos). So, a worker earning AR$400,000 in January due to a 10% (AR$40,000) increase in March could instead receive AR$420,000 in February and March and AR$440,000 from April onwards. Workers may also be paid a one-off bonus known as a suma no remunerativa.

When unions and employers don’t sit down for negotiations, labor conditions established in previous meetings remain in place, including salaries.

These labor law protections only apply to registered workers. Those with informal or irregular contracts, or no contracts at all, depend on what their employer decides to pay them. 

Some employers make their workers register as self-employed and set themselves up in the tax system known as the monotributo, which covers healthcare and pension funds, despite performing the tasks and duties of a regular employee. This leaves them out of their sector’s formal framework.

Being a registered worker also guarantees that employers pay for healthcare for an employee and their family, pension funds, a thirteenth salary (aguinaldo) and paid vacation, among other basic rights.