Milei looks to reform severance pay, fines for hiring workers informally

The incoming labor team has informally discussed the proposals with labor leaders

One of the premises of the labor team preparing to take office with Javier Milei is not to irritate the trade union leadership, which libertarians believe will be key to regulating conflict during the new administration. There is early talk of a modest labor reform, limited to two aspects that future officials say has been discussed without great resistance in informal conversations with the leaders of Argentina’s General Confederation of Labor trade union federation (CGT, by its Spanish initials). 

These are voluntarily extending the kind of severance pay used in the construction sector to other areas and a reformulation of the fines Argentine labor law establishes for employers who do not comply with regulations.

That’s the mandate the president-elect conveyed to Omar Yasín and Horacio Pitrau, two lawyers nominated as the next secretary and undersecretary of labor respectively. They will serve under the new Human Capital ministry, which will be led by Sandra Pettovello. And that’s the impression they hope to give with their first formal communications with the leaders of the labor union central, which will not happen before Milei takes office.

​​This “light” reform is a synthesis that includes initiatives from ideologues of Milei’s La Libertad Avanza, such as Miguel Ponte, a Human Resources expert who provided services for the Argentine multinational Techint for 44 years and later worked in Mauricio Macri’s first Secretariat of Employment, mentored by Jorge Triaca. Ponte was not present last week at the meeting between current Minister of Labor, Raquel “Kelly” Olmos, and the officials who will replace her. He is not expected to hold any public position, other than as labor advisor.

Someone who did participate in the talks along with Yasín and Pitrau is Adrián Cordero, also a lawyer and brother of a senior legal officer at Techint, Julio Cordero. Weeks ago, both Yasín and Julio Cordero opposed the bill to reduce working hours during the congressional debate.

The team has its own reform agenda, which takes on some of Juntos por el Cambio’s proposals. Core policies include the potential extension of the so-called “Austrian backpack” that rules the severance mechanism of the Construction Workers’ Union (UOCRA, by its Spanish initials), and which Gerardo Martínez himself described to Milei during the campaign. It enables the creation of a fund composed of contributions from companies (an estimated 12% of the total payroll) to cover severance payments and put an end to labor litigation. According to future officials, it would be promoted individually on a sector-by-sector basis, and also through their wage negotiations.

The other pillar of the reform, modeled on Horacio Rodríguez Larreta’s electoral campaign, involves minimizing the fines employers face for the irregular or informal contracting of workers. These fines currently double the amount a worker gets. In private, libertarian officials claim this latest initiative has been well received in conversations with union leaders. Many leaders employ workers at the union-led health insurance funds known as obras sociales. Here, they themselves can face labor lawsuits.

Originally published in / Translated by Agustín Mango


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