Argentina: Amendments to and Extension of REPRO
The National Executive Power (PEN) has decided through the Ministry of Labor and Social Security (MTEySS)'s Resolution Number 1-E/2017 (hereinafter, the Resolution), to extend the term of validity of the Productive Recovery Program (REPRO). Additionally, the Resolution has provided for a series of amendments that tend to relax the requirements to be met by those who intend to enjoy the benefits of REPRO.
The REPRO was created back in 2002, through Resolution Number 481 of the MTEySS and was intended to apply for as long as the National Occupational Emergency lasted.
Aimed exclusively at workers who provide services in declining private sectors and in geographical areas in crisis, the REPRO was intended to provide economic assistance to employers to mitigate the negative effects on the level of employment.
Since the National Occupational Emergency was extended until 31 December 2017, the PEN decided to do the same with the REPRO.
On account of its extension, the REPRO will remain in effect until 31 December 2017.
The REPRO establishes the possibility of granting to the beneficiaries a fixed remunerative monthly sum equal to one and a half times the minimum wage which, to date, stands at ARS 8,060 (approximately, USD 503.75). The benefit may be granted for up to a twelve months term, not withstanding the extensions that beneficiaries may apply for.
Employers who are able to demonstrate reliably that existence of objective reasons that affect them or the region in particular and therefore need help in sustaining and generating jobs are eligible for REPRO.
Aside from demonstrating the existence of objective causes particularly affecting their Company or region, the REPRO beneficiaries must:
- Pay their employees the supplement in money needed to meet the minimum salary established for their category as per the pay scales in the activity's applicable Collective Bargaining Agreement.
- Refrain from dismissing without just cause (article 245 of the Employment Contract Law) or due to force majeure reasons (article 247 of the Employment Contract Law).
- Complete the application forms and file the mandatory documentation required by Annexes I and II of the program.
The Resolution totally replaces Annexes I and II of REPRO. However, the changes introduced there are not significant, at least in importance.
On the contrary, the amendment that the Resolution makes to article 4 of the regulations that created the REPRO is of critical importance. In fact, by virtue of the new wording companies benefiting from REPRO no longer commit to "maintain the total headcount registered at the time of filing the application and/or of its approval" but rather accept, as previously mentioned, to avoid dismissing employees without just cause or due to force majeure reasons.
The joint interpretation of the amendments introduced by the Resolution and REPRO's background allows to infer that the beneficiaries now have the possibility of reducing their headcount through alternative means such as mutual termination agreements or voluntary retirement programs, without that resulting in the loss of the benefit.