The Argentine Congress is poised to commence extraordinary sessions in February, featuring a comprehensive agenda. Among the bills slated for debate are modifications to the Glaciers Law, a reduction in the age of criminal responsibility, and the recently ratified EU-Mercosur agreement. The upcoming sessions will serve as a significant evaluation of the government’s legislative capabilities, with plans to enact all proposed measures within a single month. The most anticipated legislation, however, is President Javier Milei’s ambitious labor reform, which is scheduled for a Senate vote on February 11. The legislation, referred to as the “Labor Modernization Act,” was formulated by Minister of Deregulation and State Transformation, Federico Sturzenegger. At first glance, it appears to be legislation specifically designed for corporations: restrictions on the right to strike, increased flexibility in working hours, more stringent leave requirements, and constraints on union authority, among other provisions. In light of the extensive transformations, labor unions expressed their opposition. The objections raised by the opposing side, however, were less predictable. Although numerous business associations have expressed support for the initiative, several prominent stakeholders have raised objections regarding critical aspects of the legislation.
The objections, which focus on five articles, are grounded in the assertion that rather than addressing current issues, they will generate additional complications. “[These articles] introduce disorder into a system that is presently well-structured. In other words, you bring in a problem where none exists,” stated Juan Pablo Diab. CAME serves as a business federation that represents over 400,000 small and medium-sized enterprises. The parties involved in the protests are actively engaged and not remaining passive. On January 7, CAME, in conjunction with the Argentine Chamber of Commerce and the Argentine Association of Metallurgical Industrialists, dispatched a letter to Vice President Victoria Villarruel and senators across all political factions, urgently advocating for the removal of five articles from the proposed legislation. One of the contentious elements is Article 126, which aims to alter the ultra vires implications of lapsed collective bargaining agreements. Ultra vires is a legal principle that permits a collective agreement to persist beyond its stipulated duration, signifying that it is automatically prolonged until a new agreement is reached through negotiation. In this context, Milei’s proposal aims to retain solely “normative clauses” that pertain to individual employment rights, while discarding “obligational clauses” that define the reciprocal obligations between unions and employers, which do not directly govern the worker-employer relationship.
“The law has not been able to definitively determine which clauses are normative and which are obligational,” Diab stated, noting that this could lead to “chaos” within the system. And how does one resolve chaos? Via judicial dispute. “If the objective is to minimize litigation, what is the rationale behind implementing provisions that may lead to an increase in it?” Critics additionally highlight Articles 130 and 131. In the context of collective bargaining, it is established that wages and benefits negotiated at the company level take precedence over sector-wide agreements. Diab suggests that although these provisions may undermine unions, they have the potential to strengthen company labor councils, which tend to adopt a more confrontational stance. “When the existing order and hierarchy are dismantled, various groups tend to surface, frequently adopting more radical positions,” he explained. Diab noted that company-level bargaining has previously been implemented in Germany, Spain, and Chile, where it did not succeed. He stated that the purpose of the article is to drive wages beneath the current minimum established by collective agreements, which is unconstitutional. Another contentious element is Article 132, which empowers the Labor Secretariat to unilaterally initiate the renegotiation of agreements and even suspend those that have already received approval. The rationale for the action hinges on the assessment that an agreement “generates serious economic distortions that affect the general interest.” Diab argues that the criterion is “far too broad” and may differ significantly between administrations. Finally, CAME, CAC, and Adimra expressed their discontent with Article 128, which stipulates that contributions to business chambers are “strictly” voluntary. Diab contended that the law “clearly breaks the balance of power between the parties” and undermines business representation, given that union dues would remain mandatory. The positions held by these three organizations are not universally accepted within Argentina’s business community.
The Argentine Industrial Union has articulated its support for the reform and has presented a document to the Senate advocating for the bill. In December, the Argentine Business Association welcomed Central Bank President Santiago Bausili, who articulated that the initiative represents “a set of policies aimed at boosting the competitiveness of the economy.” Exequiel Chapur, a supermarket owner from Córdoba and a prominent member of the National Union of Entrepreneurs, SMEs and Producers, stated that a new labor law is essential as the existing legislation “condemns SMEs to operate under rules from 40 or 50 years ago — rules that are impossible to apply in the digital, modern economy of 2026.” As stated on its official website, UNEPP represents “4,000 entrepreneurs, SMEs, and producers.” It is noteworthy that the organization was established in 2023 to bolster Milei’s labor reform initiatives, alongside the “Bases Law,” which received approval in 2024. Chapur unequivocally rejected CAME’s objections to the five articles. “Far from bringing peace, [their position] would ensure the perpetuation of the litigation industry, labor rigidity, and the overwhelming burden of non-wage costs that hinder the hiring of new staff,” he stated. Ending the so-called “litigation industry” is a key demand from various sectors — a pejorative term for lawsuits initiated by employees against firms, which, according to business leaders, inflict financial harm and hinder their ability to hire new staff.
Chapur additionally advocated for supplementary measures absent from the existing legislation: the removal of obligatory notice periods for termination, the imposition of limits on severance payments, and the deregulation of hiring expenses. Luis Campos noted that discussions within the business sector regarding the decentralization of union power are not a recent phenomenon. He pointed out that several of the suggested solutions have been attempted as far back as 1956, yielding varied outcomes. Campos notes that the initial effort to divide the labor movement in Argentina occurred in 1956 under Pedro Eugenio Aramburu during the Revolución Libertadora, which resulted in the ousting of Juan Perón. “The result was an explosion of labor conflict, and the authorities had no one to negotiate with,” he stated. Subsequent efforts – akin to those undertaken in the 70s and 90s — failed to dismantle national union frameworks. However, the present legislation reverts to the approach that proved unsuccessful in the 1950s. Campos suggests that Milei’s proposal enables local unions to embrace more confrontational positions or to be influenced by more aggressive factions within the labor movement. “For companies operating in those areas, this can pose a significant challenge.” Despite their differences, both parties concur on a singular point: there is a prevailing skepticism regarding the bill’s potential to generate employment, contrary to the government’s assertions. “It will not eliminate the litigation industry… certainly not if the articles CAME seeks to remove are indeed taken down,” Chapur stated. Campos, conversely, contended that the fundamental objectives of the reform are to diminish labor expenses and enhance control over unions and workers. “The objective is to strengthen discipline within professional environments. For many sectors, the ability to strike within the legal framework will become extremely difficult,” he stated.