First of all, we should bear in mind that the National Executive Power (the "Executive") enacted through the Executive Order of Necessity and Urgency no. 1043/18 (the "Order") the payment of a non-remunerative allowance of AR$ 5,000 (Argentine Pesos Five Thousand) for all employees within the private sector (the "Allowance").
Initially, the Allowance applied to every employee within the private sector. However, the Order established that for those cases in which re-adjustments of the original 2018 collective salary negotiations have already been agreed upon (whether by means of the "automatic trigger clause" or because they've been re-negotiated), employers would be able to offset the Allowance with such re-adjustments.
As we anticipated, the unions intended to pay the Allowance instead of offsetting it.
This happened to the commerce and services employees bound by Collective Bargaining Agreement no. 130/75 (the CBA).
Last Tuesday, the Commerce and Services Trade Union (the "Union") agreed on a new salary increase of 20% on top of the current salary scale as from March 2018, to be paid in installments on January, February and March 2019.
Additionally, with an unclear wording, the new agreement entered by the Union established in its 4th article that: "The parties agree that the non-remunerative allowance set forth in article 1 of Order no. 1043/18 shall maintain such nature".
Until execution of such agreement, commerce and services employers were within the scope of employers that could offset the Allowance, under the interpretation that it was unilateral. The Order established that in case of offsetting, the Allowance would acquire remunerative nature.
Bearing in mind the wording of the agreement, we understand that the only possible way to maintain the Allowance as non-remunerative is by not offsetting it. Therefore, we conclude that the most reasonable interpretation is that the collective bargaining agreed not to offset the allowance.
Accordingly, the Allowance of AR$ 5,000 should be paid to all employees under the Commerce and Services CBA within the terms and time frames of the Order.