Milei's labour reform bill clears lower house, advances to Senate

Argentina’s ruling coalition secured approval for President Javier Milei's flagship labour reform bill in the Chamber of Deputies on Thursday, despite nationwide demonstrations and a general strike called by the CGT umbrella union grouping.

The bill passed in general terms by 135 votes to 115, with no abstentions. It will now head to the Senate, which must ratify its amended text before it can be signed into law by President Milei.

The ruling La Libertad Avanza party removed the controversial 'Article 44' from the draft, a change that would have severely reduced wages for workers suffering accidents or illnesses unrelated to their jobs, in order to secure passage.

The initiative was backed by La Libertad Avanza and allied caucuses – including Fuerzas del Cambio (made up of the UCR, MID and PRO), Innovación Federal, Producción y Trabajo, Independencia and two single-member blocs.

All Peronist deputies from the opposition Unión por la Patria coalition voted against the reform, backed by the majority of Provincias Unidas lawmakers, four left-wing lawmakers and individual deputies Marcela Pagano, Natalia de la Sota and Jorge Fernández.

The bill now heads to the upper chamber. Hoping to speed through the bill, the ruling coalition has called a joint meeting of the Senate’s Labour Legislation and Budget committees for 10am later today, aiming to issue a formal opinion and get the bill to the floor by February 27.

The debate is set to unfold on the eve of the annual state-of-the-nation speech, at which Argentina’s President Javier Milei will formally open Congress’ ordinary sessions.

The contested reforms pushed by Milei would make it easier to hire and fire workers in a country where job security is already hard to come by. It would also reduce severance pay, limit the right to strike, increase potential working hours and alter holiday provisions.

Union leaders have described the changes as "unconstitutional" and vowed to launch legal action to block them.

Government statement

In a statement, Milei's office welcomed the bill's approval, noting that it was one of the President's "promised structural reforms" and that it would help to "make Argentina great again."

The bill, once it begins law, is "intended to end more than 70 years of backwardness in Argentine labour relations," it said in a statement.

"The approval of this law means the creation of registered jobs, less informality, labour standards adapted to the 21st century, less bureaucracy, greater dynamism in labour relations and, most importantly, the end of the litigation industry in the Argentine Republic," the government said.

In a message on social media, the Office of the President stated that "the new regulations simplify and digitise labour registration processes, modernise licences and procedures, clarify responsibilities and establish clear rules for both workers and employers." 

The government noted that the law "also incorporates specific incentives for the formalisation of employment, mechanisms that reduce legal disputes, and a special focus on small and medium-sized enterprises [PyMES in Argentina, or SMEs], eliminating distortions that impeded their growth, investment, and generation of opportunities." 

"This reform promotes an environment that facilitates hiring, boosts investment and allows registered employment to expand again in all sectors of the economy, generating more and better formal jobs. Argentines have made an enormous effort to achieve macroeconomic, monetary and fiscal stability," said the President's office.

It added: "This labour modernisation is a further step towards consolidating that process, allowing workers and employers to plan for the long term without fear of ongoing conflict, favouring the creation of quality employment in a dynamic framework in line with current challenges." 

– TIMES/NA