Newsletter: Changes to Argentina Labor Laws
I. New salary agreement for commerce employees
On 13 October, the Argentine Federation of Commerce and Services Employees (FAECyS), the Argentine Chamber of Medium Enterprises (CAME), the Union of Argentine Commercial Entities (UDECA) and the Argentine Chamber of Commerce and Services (CACS) agreed to the terms of the salary agreement which will be valid and remain in full force and effect during period comprised between the months of October 2016 and March 2017.
The agreement, which received formal approval from the Ministry of Labor and Social Security (MTEySS) on October 27, established a 19% increase to be paid on a non-cumulative manner pursuant to the following breakdown:
- 12% non-remunerative increase as from October 2016
- 7% remunerative increase as from January 2017
II. Central Bank Regulations - Employees may be paid in any bank of their choice
The Argentine Central Bank (BCRA) set forth, through Communication "A" 6064, a series of changes aimed at facilitating client migration between financial entities.
Amongst other developments, the regulation provides that salary accounts (Cuentas sueldo) may be opened upon request of the employees. Such authority previously rested solely on the employer. Similarly, those employees who already have a saving accounts in argentine pesos may request its transformation into a salary account.
Additionally, as from November 1st, all financial entities must permit its customers to open and close accounts through the home-banking service. The same shall apply with regard to credit cards.
III. SECLO Resolution- Minimum caps on occupational accidents of professional illnesses agreements
With the stated purpose of avoiding potential challenges to settlement agreements that, in the matter of occupational accidents and professional illnesses, may be entered into in the mandatory settlement instance; the Directorate of the Mandatory Labor Settlement Service (SECLO) circulated the minim caps in force, pursuant to the following breakdown:
- $10,909.45 for each 1% of disability in case of in itinere accidents
- $13,091.34 for accidents in the course of work or professional illnesses, in such cases where the 20% foreseen in article 3 should be added.
IV. Bill Supplementary to the Occupational Risks Regime
On 20 October 2016, upon initiative of the National Executive Power, a bill Supplementary to the Occupational Risks Regime (the Bill) was submitted to the Senate's consideration. Its aim is to reduce the proliferation of individual litigation which has jeopardized the original purpose of the Occupational Risks Law (LRT).
Amongst the most relevant amendments proposed by the Bill are the following:
a) Medical Committees: they shall become the mandatory, prior and exclusive administrative instance to which workers must resort in order to request the provision of the monetary benefits foreseen in the LRT, or the approval of the agreement entered into by and between the parties.
b) Temporary Working Disability (ILT): the ILT term is extended to two years, which, for purposes of its calculation, are computed by adding all the periods during which the employee would have found himself/herself unable to work on account of the same accident or illness.
c) Base Income: for purposes of calculating the Base Income (that which is used to calculate the monetary benefits), the average of the last four monthly, normal and habitual salaries immediately prior to the first incapacitating manifestation ought to be considered. Furthermore, the Base Income shall accrue interests as from the date of the first incapacitating manifestation until approval or determination of the worker's permanent incapacity or his/her death.
d) Termination of Insurance Contract: Failure to pay two monthly fees, whether consecutive or not, or the accumulation of total debt equivalent to two monthly fees, shall entitle the ART to terminate the Workers' Compensation Insurance Contract.
V. End of Year Bonus
On 19 October 2016, the National Government, the General Confederation of Labor (CGT) and business/employers representatives signed the minute entitled "Dialogue for Production and Work". The parties established therein that employers and employees shall initiate a negotiation by business sector for the payment of an extraordinary End of Year Bonus.
The reference sum of the bonus - which will be of a non-remunerative nature - is of AR$ 2,000 per employee.
The terms of the minute reflect the parties' commitment to negotiate the above-mentioned bonus (with the reference sum in mind), rather than an obligation to pay AR$ 2,000 to every employee. As a matter of fact, several chambers of employers have already disclosed that they will be unable to pay such a bonus.