The Employment Law Review

By Enrique Mariano Stile1

I INTRODUCTION

Labour relationships in Argentina are governed by the Argentine Constitution, international treaties and conventions and, in most cases, by the Labour Contract Law No. 20,744 ('LCL').

The Argentine Constitution contains the overriding principles governing labour relationships. The basic principles in the Argentine Constitution include freedom of employment; the right to work in a dignified and equal manner; to earn appropriate wages that cannot fall below a minimum declared by law; to be entitled to paid breaks and vacations; and equal remuneration for equal work. The LCL is the minimum statutory threshold and governs every aspect of labour relationships, such as remuneration, termination, vacations, timetables, leave of absence, etc.

For litigation, issues related to employment contracts and conflicts are decided by the ordinary justice of each province and of the City of Buenos Aires. In broad terms, there are two main court structures, one involving mainly oral arguments and a second one involving mainly written documents.

The provinces have mainly adopted the oral procedure and the provincial tribunals usually consist of more than one judge (i.e., three members) and of a sole instance or stage. For example, in the Province of Buenos Aires, the tribunals consist of three judges, and any appeals may only be filed before the Supreme Court of Justice of the Province of Buenos Aires.

When the procedure is mainly written, there are two instances or stages, the first before an individual judge and the second before a three-member tribunal. For example, in the City of Buenos Aires, there are 80 first instance Labour courts. Any appeals against the decisions of these Labour courts must be filed before the National Labour Court of Appeals ('NLCA'). The NLCA is divided into 10 chambers, each of which is formed of three judges.

No court has the power to control another, but only to review, in some cases, appealed decisions. In principle, case law does not create binding precedents. The only exception to that principle is a full-bench judgment, in which all the judges of the NLCA participate. These judgments determine legal doctrine and the criterion adopted by the NLCA in that case is mandatory for 10 years for all of its 10 chambers and for all first instance labour courts sitting in the City of Buenos Aires.

Appeals against judgments rendered by the NLCA or by the Superior Courts of each province, may be filed as extraordinary appeals before the Argentine Supreme Court of Justice ('the ASCJ'). The extraordinary appeal before the ASCJ, is an exceptional appeal aimed at preserving the supremacy of the Argentine Constitution and is only applicable in very specific situations.

II YEAR IN REVIEW

Employment law and the power of the unions depend on the political party in office at the time. A pro-union or pro-employee government is different from a market government, because it tends to enact laws granting increased powers to the unions which, in turn, support the governing party, as well as enacting more employee-protective regulations. In recent years, Argentina has had a pro-employee government. However, very recently the Argentine government has discreetly distanced itself from certain very representative unions and union leaders, especially after the governing party won re-election in October 2011.

Judges have increased their tendency to be protective of employees as a consequence of the pro-union politics and legal practice has been affected by claims from managers taking advantage of judges' interpretation of the law, which has dramatically increased the amount of cases for both blue-collar and white-collar employees.

It is noteworthy, however, that, despite the pro-employee bias evidenced by the labour courts and labour legislation, one of the major topics of last year, the bill on profit-sharing for employees, has been publicly postponed by the Executive Branch. This is consistent with the government distancing itself from certain union groups, as mentioned above.

In fact, the bill was introduced by a member of the House of Representatives aligned with the ruling party and widely promoted by the head of the Workers General Confederation ('WGC'), and it consisted of the enactment of a law that would recognise the granting of a percentage of companies' profits to employees. Nonetheless, the Executive Branch, in a political and diplomatic move aimed at delaying the matter for now in order to maintain good relations with businessmen, put off the initiative. Thus, the implementation of this law will not be discussed until at least 2012.

Another bill that was introduced this year is related to the call centre activity. Within the past few years, many companies have established call centre offices in Argentina, mainly dedicated to online services for telecommunication companies' clients. The bill is aimed at reducing the working hours of call centre employees and generally improving the working conditions of the workers, especially regarding daily rest and health and safety conditions. In fact, the bill's sponsors consider that the services rendered by the call centre employees are unhealthy and therefore, due to the fact that they are obliged to answer calls without a rest, they believe that these particular tasks need a special regulation. The bill has not been discussed in the current year's sessions, and it is expected to be discussed next year.

Probably one of the main reasons why these and many other bills has been postponed is related to the fact that presidential elections took place in 2011 and the economical and political agenda is yet to be defined.

In relation to employee's salaries, in 2011 the minimum wage has been modified by the Wage Council, a group that brings together workers and employers in order to review periodically wage costs in relation to the economic situation. In this sense, the monthly salary has been raised from AR$1,840 up to AR$2,300.

On the other hand, the amount of litigation and collective negotiations have continued to increase, indicating that 2012 will surely be a year of conflict in employment law. The amount of collective negotiations in the past year is detailed in the following chart:

III SIGNIFICANT CASES

The issues described above have been analysed by Argentina's administrative and court authorities.

Further, the National Labour Court of Appeals has recently stated2 that an employer should not withhold income tax from the severance paid to an employee. In fact, the case was filed by an employee who was claiming compensation for the amounts deducted by the employer to the severance pay. The plaintiff's argument was that the payment was not periodical or regular and therefore should not be subject to withholdings. The NLCA finally acknowledged that opinion and said that the main issue was whether compensation was subject to withholding due to the periodicity of the payment, and since severance...