Buenos Aires Times

economy conflict ahead?

Tensions flare between gov’t, union movement as labour reform nears

As a labour reform package nears a vote in Congress, unions say President Macri's latest decree package could threaten local jobs. Many union bosses remain on alert over a recent crackdown on union corruption.

Friday 19 January, 2018
Teachers unions are warming up for what are expected to be tense collective wage bargaining negotiations with provincial governments.
Teachers unions are warming up for what are expected to be tense collective wage bargaining negotiations with provincial governments. Foto:Telam

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In an off-year in the electoral cycle, the national government led by President Mauricio Macri will seek to pass into law a labour reform package that will reduce workers' benefits and access to legal dispute mechanisms, among other changes. 

For its part, the government hopes the reform will encourage the private sector to create more jobs in the formal economy, in a country where up to 30 percent of workers are paid 'under the table'. (Revelations this week that Labour Minister Jorge Triaca maintained an illegal employment relationship with a former housekeep and assistant have been particularly damaging in this sense).

Tensions are rising between the government and various sectors of Argentina's divided union movement, despite its kingpins having negotiated parts of the reform package. Cabinet Chief Marcos Peña this week said the government remained open to changes to the package and confirmed the bill would reach Congress for a vote during ordinary sessions beginning March.

Unions have taken issue, most recently, with the president's wide-ranging decree package which includes import-friendly measures  that they claim could threaten jobs. Despite citing safety concern, the powerful transport and logistics unions are also surely concerned about reductions to weight restrictions for trucks and the opening up of corridors for road trains, measures which would theoretically improve productivity but reduce employment.

Another decree to have prompted particular outrage is one which strips the powerful CTERA teachers union of four seats at the national wage negotiation table. Governments in Argentina have traditionally faced some of the most severe stand-offs in collective wage bargaining talks with education unions. Smaller teachers unions celebrated the measure but echoed general concerns about the impact of the so-called "megadecree" on workers. 

Overall, unions have rejected the 15-percent wage increase suggested by government officials, who have pointed to inflation estimates at the same rate (private estimates put 2018's predicted annual inflation rate much higher).

UNISON

On Thursday, leaders of some of the most powerful union groups came out swinging against the government at a press conference in Mar del Plata. The event featured historic teamsters boss Hugo Moyano, hospitality union boss Luis Barrionuevo, judicial workers leader Julio Piumato, bank workers’ Norberto Palazzo, and others.

In a press release, they claimed the government has “reduced the purchasing power of salaries and pensions, forgiven the debts of tax evaders, reduced the salaries of pensioners and social programmes, filled Argentine supermarket shelves with foreign products that threaten the local market, indebted the country in a way never before seen, and made the rich richer and the poor poorer”. 

They also called for legal moves against the pension reform bill passed in late December — a turnaround given what many considered union confederations’ weak response to the bill and the violent clashes between police and protesters that accompanied the vote in Congress.

CORRUPTION CRACK-DOWN

Macri's mid-summer move to modernise the state with his megadecreee — which will modify 140 existing pieces of legislation and eliminate 20 laws —  is just one element in the ongoing breakdown of relations between national and provincial authorities and the unions. 

Union bosses are on high alert as authorities crack down on corrupt officials, with recent police raids having further titled public opinion against the movement. Unions claim the crackdown is being used to create a generalised and unfair perception of corruption surrounding union activity.

On Friday, prosecutors in Uruguay confirmed that they found US$ 7.5 million in safety deposit boxes belonging to union boss Marcelo Balcedo. Balcedo and his wife were arrested in their Uruguay mansion in early January. Police found guns, luxury cars and cash. 

Meanwhile, 10 UOCRA construction workers from the Bahía Blanca branch were arrested on January 10 after the head of UOACRA in Bahía Blanca, Humberto Monteros, was found with 5.25 million pesos and US$ 100 thousand in cash. 

LABOUR REFORM

Despite the rest from elections, 2018 is set to be a defining year in Argentina politics. The Macri administration remains cautious about the possibility of unions and opposition parties coming together to stymie its overall reform agenda, particularly its next bet on labour reform.

The government, led in its negotiations with unions by Triaca, hopes the reform package will reduce compensation obligations for businesses as well as implementing changes to registration procedures and policies surrounding days-off. The reform would also allow workers to opt to retire at the age of 70 instead of the current 65.

The opposition in Congress is already in cross-party talks to attempt to undo Macri's megadecree during a special session in February on the grounds it undermines the role of Congress. And the otherwise divided union movement is singing a similar tune.

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