Challenges to mega-decree labor reforms sent to the Supreme Court

The Court will have to decide between upholding a stay petitioned by the CGT and honoring the government’s appeal to strike it down

The labor reforms of President Javier Milei’s mega-decree remain frozen after the National Labor Appeals Court sent a government appeal to the Supreme Court on Thursday. The move postpones the decision on a stay order halting the mega-decree’s sweeping changes to Argentina’s labor laws — a stay which the government is trying to strike down.

In its ruling, the appeals court justified its decision by stating that there were “serious institutional issues at stake” that merited the intervention of the Supreme Court. “The situation affects the Executive Branch’s ability to issue legislative directives, which are effective immediately unless Congress strikes them down,” said the document signed by judges Carlos Pose and Alejandro Sudera.

The legal battle stems from the mega-decree Milei issued on December 20 declaring an economic, financial, fiscal, social, and administrative “emergency” in Argentina. The 88-page executive order contains 366 articles that impact vast sectors of Argentine society, completely deregulating the economy and overturning laws that protect workers, including the right to strike, and limiting benefits like severance pay and maternity leave.

One of the first organizations to file a legal complaint requesting certain aspects of the DNU be halted was the General Confederation of Labor (CGT) targeting the articles dealing with labor rights in early January. 

Among the labor measures, the decree also eliminates penalties for companies that fail to register their employees, distort their date of hire, or misrepresent their salaries. It also abolishes an article of the labor law that requires a company to pay twice as much in compensation if it fires an unregistered employee. 

On January 3, the National Labor Court granted the CGT a stay order, which effectively put the government’s labor reform on hold. 

“Several of the norms that the Executive Branch intends to modify without the intervention of legislators are of a repressive or punitive nature, to the point that they have been included as belonging to the sphere of labor criminal law,” read the 14-page ruling.

This week, Treasury Attorney General Rodolfo Barra filed a motion requesting the stay order be repealed and the labor reforms of the DNU be put in motion. Although the National Labor Appeals Court decided to turn the case over to the Supreme Court, it did rule that the effects of the injunction remain in place, striking down Barra’s request that the reforms become operational. 

This is not the first complaint made against Milei’s decree to make its way to the Supreme Court. Shortly before the end of last year, the Court agreed to review a filing made by La Rioja province. In its presentation, the provincial government asked it declare the “manifest unconstitutionality” of the mega-decree and to issue an injunction to immediately suspend its application.

However, the Court clarified that it would not review the La Rioja case until after its January recess. And although there have been no public statements regarding when it would take on the CGT case, that precedent could indicate that no decisions will be made until at least February. 

On Thursday, the Administrative Ligation Court rejected an injunction against the DNU filed by the Center for Legal and Social Studies (CELS, by its Spanish acronym). Unlike the CGT’s claim, the CELS injunction was aimed against the DNU in its entirety and demanded that be annulled due to being unconstitutional. 

In his ruling, Federal Judge Enrique Lavié Pico rejected CELS’ attempt to constitute a class action, saying that the wide-ranging laws modified by the mega-decree should be processed in different courts according to each matter at hand.


All Right Reserved.  Buenos Aires Herald