Retrograde Reforms Caused Anomalies that Should Be Corrected

The anachronism of our legal system has been reinforced by regressive bills that make legislation go back to basics, although there have been some partial reforms that were partly done with good intentions.

Published in El Cronista on May 21, 2019
Unfortunately, most partial reforms were inspired by ideological prejudices, and a large number of them were driven by specific and spurious interests or a hidden agenda. The lack of necessary regulation to modernize the law has also caused anomalies.

Together with the 2004 reform, maybe the most complex reform was the application of Act No. 23546 in labor and employment matters, consolidating the centralization of collective bargaining and eliminating the possibility that a low-level union could bargain a collective agreement covering a company, a group of companies or the industrial sector as a whole to supersede the collective agreement entered into by a top-level union. This ruled out the possibility of democratizing the sector.

Act No. 23592 was passed as a result of discriminatory door policies at night clubs, and since its enactment it has been unrestrictedly used by Courts to rule against those who arbitrarily hinder, obstruct, restrict or somehow undermine the full and egalitarian exercise of fundamental constitutional rights and guarantees, ordering them to stop discrimination and pay compensation for the damage and emotional distress caused by their acts, including acts of discrimination on grounds of race, religion, nationality, ideology, political or union opinion, sex, financial health, social position or physical characteristics.

This law was first drafted to combat discriminatory door policies at nightclubs and then based on its comprehensive scope was largely applied to labor law. In re Maximiliano Alvarez et al v CENCOSUD the Supreme Court found that any act of discrimination, such as wrongful termination, based on the union activity conducted by workers turned their employment termination null and void, and reinstatement was ordered. This prevailing rule ended the relative job security under our legal system that had a long tradition dating back almost one hundred years.

The reforms introduced in such principles as jus variandi (Section 66 of the Employment Contract Act), inalienable rights (Section 12 of the Employment Contract Act), in dubio pro operario (Section 9 of the Employment Contract Act), penalties for non-registered employment and wages (Acts No. 24013 and 25323), instead of helping bring social peace and balance between the parties, have promoted and intensified conflict, increased litigation, and above all aroused bitter hostility and abuse in court decisions, amounts awarded and items claimed to raise severance payments excessively through certain arbitrary interpretations and mechanisms against the business sector, condemning SMEs to go out of business or causing totally unjustified big losses to medium-sized and big corporations.

There has been an absurd wave of unfair Court rulings that especially hurt workers –in addition to other unjust acts- driving them to marginalization, indigence, poverty and unemployment, and increasing expenses unreasonably, as a result of which Argentina has the highest and the least competitive labor costs.

The Argentine labor model is retrograde and has become anarchic. With their decisions Labor Courts have become the executioners of many, many companies, without realizing that they also destroy sources of employment.

Under the false pretense of defending workers’ professional interests, deep prejudice has been stirred up, labor law has been petrified, evading the main duty to safeguard and defend legally protected interests under the National Constitution, such as the common welfare and general well-being of all citizens and those who wish to dwell on Argentine soil, where labor in its several forms shall be protected by law.

By Julian A. de Diego
Director of the postgraduate course on Human Resources at the School of Business at UCA.