A court in Argentina has ruled that the labour reform President Javier Milei tried to implement through decree is unconstitutional, the latest blow to his plans to overhaul the nation’s economy.
The ruling by the National Labour Appeals Court, posted on the court’s website on Tuesday, declared every single article in the labour chapter (Título IV of Decreto de Necesidad y Urgencia 70/2023) of the decree to be unconstitutional in response to a presentation by the CGT umbrella union group.
The court had already suspended the labour reform Milei announced on January 3, following an appeal from the powerful labour group. CGT leaders held a nationwide strike against Milei’s reforms on January 24.
The government could have proposed the reform via Congress, as opposed to trying to implement it through an urgent executive decree, the judges wrote in their ruling.
Milei’s only recourse now is to appeal to the Supreme Court or push the reform through Congress. Argentina’s lower house Chamber of Deputies began a marathon session to debate Milei’s so-called omnibus bill Wednesday.
Milei’s labour measures centred around simplifying employers’ severance pay obligations and “trial periods” before a company must hire a worker to a full-time contract, among other reforms.
Argentina has higher labour costs relative to worker productivity.
Collective scope
Helmed by Mario Fera, Manuel Diez Selva and Héctor Guisado, the court specifically ruled that Título IV of the DNU is "contrary to Article 99, clause 3 of the National Constitution," referring to presidential attributes and the impossibility for him “to issue dispositions of a legislative character.”
The judges gave their ruling a collective scope, i.e. as applying to all workers and not just those represented by the CGT.
According to judges, there was “no impediment to the meeting by both houses of Congress,” which the government attempted to argue when it tried to enforce the reforms of the emergency decree, which was published in the Official Gazette on December 21 and “had no effective date,” as ruled by the court.
The court even ruled that on December 26 the government itself called extraordinary sessions and thus “there was no impediment to both Congress houses meeting, and even on December 27, 2023, that is, prior to the effective date of Emergency Decree 70/2023, the legislative body had been convoked, was exercising its functions, and had the powers to examine the content of the reforms proposed in said Emergency Decree.”
“The text of said Emergency Decree itself shows – at least in terms of labour matters – no objective evidence of the ‘need’ to adopt so many measures, and even though it could hypothetically be justified in generic references to ‘a proven fact,’ the legally relevant truth is that the grounds do not appear to amount to an ‘emergency’ to avoid the due intervention by the Legislative Branch in terms of substantive legislation, especially when many of the statutes the Executive Branch intends to amend without intervention by legislators are repressive or penalising, to the extent that they have been included as part of criminal labour law, and classified as ‘anti-evasion laws,’” the magistrates analysed.
“The aforementioned considerations regarding the defective origin of Emergency Decree 70/2023 suffice to ground this ruling and, consequently, render a specific examination of the allegations of the claimant on the alleged invalidity of said decree, given the ‘substantive content’ of its articles, unnecessary,” stressed judges Diez Selva, Guisado and Fera.
Previous rulings
Their ruling comes after another court filed an earlier injunction to stop the reforms. The case is now being studied by the Supreme Court.
Last week a labour court judge declared six articles of the deregulatory mega-decree signed by President Milei to be invalid as affecting the rights of trade unions and workers in her opinion.
The government has the chance to appeal the ruling before the Supreme Court, although the highest court of the land has already intervened in the injunction granted by other labour court judges regarding the labour reforms and the constitutionality “amparo” challenge filed by La Rioja Province against the entirety of the decree.
The Supreme Court has no deadlines to resolve the matter and has only revealed that they assume jurisdiction at least in the La Rioja case, because it is a conflict between a province and the national government, which renders it a matter of original jurisdiction.
– TIMES/NA/BLOOMBERG
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