An appeals court in Argentina has authorized President Javier Milei’s administration to advance with its contentious labor reform, reversing an injunction that had halted it at the behest of the CGT labor federation. The National Labour Appeals Court of Argentina has determined that the reform is constitutional, a finding that faces significant opposition from both trade unions and political adversaries. President Milei expressed approval of the decision. “They cannot halt the impending growth that is approaching this country’s future. VIVA LA LIBERTAD CARAJO…!!!” the leader of La Libertad Avanza expressed on his X social media account.
The recently enacted ‘Labour Modernisation Law’, which received approval in February, implements several significant changes. It reduces severance pay, allows for payments to be made in instalments, extends the working day to 12 hours without overtime compensation, permits payment in kind (in the form of goods or services), and restricts the right to strike, among various other provisions. The government contends that the proposed measures will facilitate job creation and diminish informal employment, which is presently reported to be 43 percent of the workforce, based on official statistics. The CGT has dismissed those assertions, labeling the government’s arguments as “false.” The union stated “It is not by diminishing workers’ rights nor by rolling back the legal framework to times close to slavery that things will improve.”
Since Milei assumed office in December 2023, over 22,000 businesses have closed in Argentina, resulting in the elimination of approximately 300,000 jobs. The downturn has been influenced partially by a decrease in consumer demand due to falling real wages, alongside the economy’s increased exposure to imports. In February, industrial activity experienced a decline of four percent relative to the preceding month, with idle capacity rising to 54.6 percent, as reported by official data. Inflation, which Milei reduced to one-third of the levels observed at the time of his inauguration, has been gradually increasing over the past 11 months. In March, the consumer price index experienced an increase of 3.4 percent, marking the most significant rise observed in a year.
In February, a general strike opposing the reform prompted significant street protests; however, it did not succeed in preventing the law’s approval. The CGT has declared a May Day march on April 30 to articulate its dissent and call for a shift in the government’s economic policy. The courts have not yet delivered a conclusive judgment regarding the constitutionality of the law, which critics argue implements reforms detrimental to workers’ rights. The government has requested that the Supreme Court expedite the case via a “per saltum” procedure in an attempt to resolve the dispute swiftly.