Major victory for Milei as labour modernisation bill clears Congress

Argentina's Congress approved President Javier Milei's labour reform package Friday after weeks of sometimes violent protests and fraught negotiations, securing a flagship reform that loosens rules on workers' rights.

Milei's Labour Modernisation Bill allows working days of up to 12 hours, reduces severance pay, limits the right to strike and lowers employer taxes, among other provisions.

The Senate approved the bill by a comfortable majority: 41 votes in favour, 28 against and two abstentions.

It received the greenlight from the lower house one week ago.

Milei hailed the passing of the law, which he says is crucial to his free-market agenda. "HISTORIC. We have labour modernisation," he wrote on X Friday.

Patricia Bullrich, the head of the La Libertad Avanza caucus who played a leading role in the negotiations to reach consensus with dialogue-oriented sectors, was elated when the result came in.

"This reform sends clear signals. Argentina wants to grow again. We have not grown for 15 years, many of which were governed by those on the other side," she said.

"We want workers' rights not to be the property of a caste, of a group. Today, workers want to work with more freedom," she concluded.

As senators voted, protests against the reform continued outside the National Congress building. The law brought thousands of people onto the streets in the past two weeks in protest over what they see as a rollback in workers' rights.

The reforms, described as "regressive and unconstitutional" by Argentina’s leading labour federation, the CGT, would reduce severance pay, extend the working day to a potential 12 hours and limit the right to strike, among other measures.

Milei insists that Argentina's labour laws are outdated, too restrictive and discourage formal hiring. His government says the reform will help reduce informal unemployment and create jobs by reducing the tax burden on employers.

Over 43 percent of workers lack formal employment contracts.

Sergio Emiliozzi, a 60-year-old teacher, said that while the law was being promoted as a job creation tool, "it's quite the opposite – what this allows is for me to be easily fired."

Opposition parties and unions have scorned Milei's claim that the reform will spur a hiring bonanza.

They point to the closure of some 21,000 companies and loss of 300,000 jobs since he took office as proof that his budget-slashing, deregulatory agenda, while praised for driving down inflation, is hurting the economy.

Milei has said the legislation seeks to create “an environment that facilitates hiring, encourages investment and allows formal employment to expand again."

For Matias Cremonte, President of the Latin American Association of Labour Lawyers, the reform is "regressive" and "based on a false premise."

"Studies have shown that in no country in the world has labour legislation been decisive in creating or destroying jobs. That depends on economic policy," he said.

A recent report by the INDEC national statistics bureau on business sentiment showed 80 percent of companies have no hiring plans for the next three months and 15 percent even planning to lay off staff.

Peronist caucus leader José Mayans said during debate the reforms would "severely affect Argentine workers, retirees and pensioners."

The Formosa senator denounced the "express treatment of a law that affects 20 million people" and predicted that "it will lead straight to legal conflict."

"It was born bad and will end badly," he said, adding that "it is a bill that was drafted without consultation, by law firms representing business owners who are against workers' rights."

The president of the UIA (Argentine Industrial Union), Martin Rappallini, welcomed the law's aim to reduce the number of workplace lawsuits but cautioned that unemployment "cannot be solved with a single law."

Argentina’s economy grew 4.4 percent in 2025, driven by sectors such as agriculture and financial intermediation, while manufacturing and commerce – among the biggest job generators – contracted.

Milei has accelerated his reforms since winning key October midterms, backed by US President Donald Trump, who promised to withhold a financial aid package for Argentina's currency unless his candidate won.