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9 junio 2020

The Supreme Court Starts to Limit Workers’ Reinstatement

Emergency Executive Order No. 329/2020 banned employment termination without cause, for economic reasons due to lack of work or reduction in operations or for force majeure. The initial term of 60 days has been extended by Emergency Executive Order No. 487 for a total period of 180 days.

In line with this ban, Labor Courts have ordered workers’ reinstatement in a number of cases through interim relief in the context of amparo actions [amparo: constitutional action alleging the violation of rights committed by the government or by a court of law; in federal rules of procedure, constitutional proceedings with no exact equivalence under U.S. law.]

Article by Julián A. de Diego published in El Cronista on June 9, 2020

The Supreme Court of Justice of Argentina issued a landmark decision establishing a limit to Labor Courts’ unrestrictive will to order workers’ reinstatement as interim relief while the heart of the matter is discussed at trial (See “El despido y la reincorporación en el período de prohibición en el escenario del coronavirus” by Julián A. de Diego)

As a matter of fact, in re “Laurenzo, Juan Manuel v Unión Platense S.R.L. on Amparo” (June 4, 2020), a worker was terminated for fair cause under Section 242 (Employment Contract Act) even though this reason for termination is not included in the ban. Labor Court No. 2 in La Plata granted the interim relief sought and ordered reinstatement while the crux of the matter is studied.

In an incredible number of motions, all of which were rejected, the Company filed an appeal against the Labor Court decision (appeal for reversal) and also lodged an appeal to the Provincial Court of Justice, both of which were rejected. Then the Supreme Court of Justice of the Province of Buenos Aires filed a motion for admission of a denied appeal considering that “the decisions taken in relation to the interim relief are not final under the terms of Section 278 of the Civil and Commercial Code of Procedure”, and further explained that there was no reason to deviate from this standard.

The Company filed an extraordinary appeal against this decision, which was rejected, and gave rise to the motion that is filed with the Supreme Court of Justice of Argentina. It was a true odyssey of rejection and denial that clearly affected the right to due process (Section 18 of the National Constitution) (“Barrera Echavarría, María et al”, Judgments: 340:1136).

The Company states, quite rightly, that the order to reinstate the worker who has been terminated for fair cause is similar to a final ruling because it anticipates the decision on the merits of the case and causes serious economic, social and business damage.

Then it explains that this interim injunction forces the employer to assign a passenger public transportation bus to somebody that he no longer trusts. This interim relief measure distorts the employer’s rights to organize and manage his business, and impose any necessary discipline action that he may deem appropriate.

In addition, it limits the right to hire freely (Section 14 of the National Constitution) because the Court orders the reinstatement of a terminated worker for an indefinite period of time while the crux of the matter is discussed. In this regard, the dissident arguments by Justices Lorenzetti, Highton de Nolasco and Argibay in re “Alvarez, Maximiliano et al v Cencosud” (Judgments: 333:2306) are put forward.

Undoubtedly, the claim made is not the typical subject matter of an extraordinary appeal; however, the Supreme Court finds that it should step in when there is an arbitrary decision, as shown by the facts and procedural measures claimed, to defend the right to due process (Judgments: 311:148; 317:1133; 320:193; 325:3360; 327:2649; 330:3055; 337:1361).

Here the interim relief ordering reinstatement is a crucial element, equivalent to what may be decided in the court ruling, thus anticipating the resolution on the substance of the case.

In fact, the Supreme Court of Justice of Argentina decides on the applicable law that governs the facts in a particular case; however, its rulings have collateral effects; in other words, it gives a clear message to all courts that its decision is based on three indubitable guidelines whereby the law is interpreted following the essential concept of justice: iuris praecepta sunt haec: honeste vivere, alterum non laedere, suum cuique tribuere, which translates into English as follows: «the precepts of law are these: to live honestly, to injure no one, and to give to each his own.

Labor and employment law, which is a branch of law aimed at protecting workers based on the unbalanced relationship between workers and employers, often faces borderline issues. In many cases instead of meting out justice, it tips the balance unlimitedly, especially without objective criteria or based dogmatic opinions that forget the ultimate goal: judges must administer justice and interpret the law reasonably to arbitrate a dispute between parties.

Dogmatic decisions ignore the principle of substance over form, violate the right to due process, and deprive the damaged parties from their fundamental rights in breach of the first 43 articles of the National Constitution, which establish Declarations, Rights and Guarantees together with New Rights and Guarantees, the very essence of our vision of republican democracy and freedom, where each person’s freedom ends where that of others begins.

A fair ruling contributes to social peace and resolves a dispute sustainably. The Supreme Court encourages reflection on how rights are exercised and urges judges to issue rulings within the law, and in particular according to our Magna Carta, protecting individual liberty.

Por Julián A. de Diego
Por Julián A. de Diego

Fundador y Titular del estudio “de Diego & Asociados”. Abogado, Doctor en Ciencias Jurídicas.

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