11 noviembre 2020

Labor Challenges Posed by the End of the Covid-19 Lockdown. Nota El Cronista

Versión en español

Argentina has lost 1.5 million job positions and the underground economy accounts for 50%; all records have been beaten: inflation rate, recession (stagflation) and the highest labor costs and payroll taxes on earth.

Article by Julián A. de Diego published in El Cronista on November 10, 2020

In this context where effectiveness is highly needed, management and effectiveness should go hand in hand, but instead we feel shocked that both the ruling party and the opposition find themselves caught up in a debate that is killing our country, which is agonizing in intensive care, desperately needing a change of diagnosis, rehab and a recovery plan but nobody seems to care.

At this point, the narrative is definitely fueled by militant opiniologists in a self-destructive context whereas Argentina needs real-life decisions, facts that can change reality, clear-cut policies with clear-cut rules and an economic plan that may allow those who create wealth to guide their decisions instead of forcing them to do business elsewhere, far from Argentina.

The truth is that there are some ongoing initiatives, such as the benefits under the Emergency Aid Program for Employment and Production, salary subsidies, extended deadlines or debt forgiveness for employers’ social security contributions, low interest rate loans and agreements on paid suspension.

In this scenario, all messages are contradictory.

We have a Remote Work Act that discourages hiring for teleworking when the rest of the world relies on this source of employment that has proven to be very dynamic and with good results during the Pandemic, and in a final effort we want to amend it with a regulation that borders on unconstitutionality.

In addition, a Labor Court got the applicable law confused and ordered full payment (100%) of wages for suspended workers under Section 223 bis (Employment Contract Act) who are paid but do not work, safeguarding a legally protected interest of higher rank such as the effectiveness and continuity of the employment contract.

A lawmaker extended the statute of limitations for labor matters from 2 to 3 years in case of termination, and to 5 years for individual and collective disputes, raising the expectations of those who venture into judicial litigation and the unpredictable costs and promoting the suing culture.

Contrary to its own latest precedents, the Supreme Court has declared the constitutionality of the participation of unions with legal status only in collective bargaining, and invalidated the involvement of a merely registered union in collective bargaining on behalf of a minority group.

The funny thing is that all measures are said to be taken in the name of workers’ rights, but every one of them either hinders or impairs job creation and hurts those who work, increases the cost of future jobs and closes the door to new enterprises.

In my own professional experience every day we strive to offer solutions to the problems that our client companies are undergoing, relying on available resources in a context of sheer uncertainty and total unpredictability. That is why we can’t waste time listening to or discussing issues that are now in the spotlight of public debate, contaminating reality with so many opinions and nuances that it is difficult to know what to watch out for.

What is it that we need TODAY to face this tough reality?

  1. An aid or assistance package to support companies and reactivate their industrial sectors in the new scenarios that are emerging;
  2. A clear-cut currency and exchange rate policy;
  3. A clear-cut straightforward social security and taxation reform to lower payroll taxes and social security contributions, which are the highest in the world as we know it;
  4. Rules to promote labor-intensive activities;
  5. Rules for the knowledge industry to promote the creation of unicorns and unleash the potential of virtual reality and AI;
  6. A return to the culture of work, to meritocracy where those who work better are rewarded and motivated, and where success is celebrated and recognized with the support of the community as a whole;
  7. The three branches of the State should work in full compliance with our Magna Carta, observing and enforcing our legal system at all institutional levels;
  8. Respect for the right to property, the right to engage in any lawful industry, the right to work and the fundamental requirements for people’s dignity, in accordance with our National Constitution.
    We should repudiate contradictions, lies and people’s subordination to ideology, especially when it is used to encroach on fundamental rights, and in particular the full exercise of the right to freedom.

Along this line, a solution to every problem, a diagnosis and treatment to every symptom, the protection of supporting events to every statement, it is no use making speeches to solve the current situation in a context where criminals are not punished, insecurity increases at all levels, and there are attempts to seize the constitutional power with solutions that are typical of tyranny.

If we cannot enter constitutional life in grand style, all the other paths lead to chaos, disorder and the law of the jungle in a society that for the most part wishes to live in peace and prosperity.

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

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