Law No. 20,940 That Modernizes Labor Relations

On September 8th, 2016, Law No. 20,940 was published. The law is aimed at the "Modernization of Labor Relations" (hereinafter the "Labor Reform" or the "Law"). The aim of the Labor Reform is to develop labor relations that are more modern, fair and balanced between the parties, and promote dialogue and agreement. In general terms, to meet these objectives the Law increases the bargaining power of unions and introduces important amendments in collective bargaining regulations to improve the employees' position vis a vis the employer.

Among the many amendments introduced by the 90 page Law we would like to highlight the following:

Extension of the right to collective bargaining: The Law gives the following classes of employees the right to bargain collectively, all of which were previously subject to be banned from collective bargaining: Employees subject to employment contracts for a specific piece of work or task. Employees subject to internships or apprenticeship contracts. In this case, Small and Micro Companies may be excused from engaging in collective bargaining with them. The Law now only allows those employees with powers to represent the employer and who are vested with general managing authority to be excluded from collective bargaining.

Inter-company unions as parties in the collective bargaining procedure: The Law allows inter-company unions to bargain collectively in the corresponding company through the collective bargaining procedure (including the right to strike and union privileges) as long as the referred inter-company union has among its members a minimum number of employees working in the relevant company meeting the quorums required to form a company-union within said company. Amendments to the union's right to information: The Law increases the scope of the unions' right to information establishing: Right to periodical information (including financial information). Right to specific information for collective bargaining (information regarding remunerations of the employees affiliated to the union, financial information and information concerning investment policies). Right to information regarding payroll data (including the employees not affiliated with the union but excluding the positions served by less than 5 employees). Information requirements generally distinguish between micro, small, middle and large companies. Amendment of the right to extend the benefits agreed on in a collective contract: Employers will now...