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19 mayo 2021

New Labor and Employment Law As a Result of Coronavirus. Published in El Cronista

The public health, social, political and economic emergency has rapidly triggered the use of new technologies, which in turn has led to the need to pass new labor and employment legislation to deal with the crisis and encourage the application of Artificial Intelligence. In this scenario, legislation is changing and this change will be especially noticeable when the transition process towards the new normal starts.  

Article by Julián A. de Diego published in El Cronista on May 18, 2021

The public health, social, political and economic emergency has rapidly triggered the use of new technologies, which in turn has led to the need to pass new labor and employment legislation to deal with the crisis and encourage the application of Artificial Intelligence. In this scenario, legislation is changing and this change will be especially noticeable when the transition process towards the new normal starts.  

Today companies need to handle such a complex legal subsystem, which combines labor and employment law, temporary reforms proposed by the Executive before and during the pandemic, restrictions as a result of the public health and economic emergency, and telework and work-from-home rules and regulations that are being gradually enforced.

In this current context, the measures that have given rise to mandatory lockdown (ASPO) and then social distancing (DISPO) are still in place, making a distinction between essential businesses and non-essential businesses, companies undergoing recovery processes, and companies in crisis, some of which are deemed to be in a critical position.

Double severance pay has been in place since mid-December 2019, with a cap of ARS 500,000 effective until the end of 2021, and possibly beyond.

The ban on layoffs still stands in those cases where there is a lack of work or reduction in operations or force majeure events, as provided by the Employment Contract Act (LCT, for its acronym in Spanish), without payment of wages. But companies may suspend workers under Section 223 bis LCT and pay them a non-salary amount agreed individually, with multiple individuals or collectively. The ban on layoffs due to lack of work or reduction in operations outside employers’ control or force majeure events with reduced severance pay (half month’s salary for each year of completed year of service) is still in place because the pandemic is grounds for employment termination. Termination by mutual agreement under Section 241 LCT is accepted, together with termination for fair cause due to workers’ misconduct or breach, incapacity, disability, and retirement.

The National Government is limiting subsidies, such as the Emergency Aid Program (ATP), and now gives out a meager Productive Recovery Program (REPRO II) and more than a third of employers who need help to survive at such a high cost are kept on tenterhooks.   

As to the ways in which this crisis may be approached, there is a protected or high risk group for severe Covid-19, whose work is optional, and a group whose work must be done in person. Those who can work remotely usually work from home. In any case, vaccination and curative medicine is not enough.

The Covid-19 pandemic is a weird event outside employers’ control, which has been unexpected or if expected it could not be avoided, so we are all subject to a global force majeure occurrence that is still in place, with no signs of ending soon.

In this context, the Telework Act (Act No. 27555 and Executive Order No. 27/2021) is being enforced gradually on a case-by-case basis, and will only be fully applicable when the transition to the future new normal begins.

When a return to the workplace is feasible, please bear in mind at least the following steps:

  1. The transition process should have clear rules, especially when the bans and restrictions imposed by the pandemic are gradually lifted to give way to a completely new scenario, quite different from that before March 20, 2020;
  • Suspension due to lack of work, reduction in operations or force majeure will have to be regulated in the new normal;

3.         Layoffs will have to be handled under crisis proceedings for technological reasons, for which the National Employment Act No. 24013 (1991) (Section 23 and 98) has a basic scheme already.

4.         The creation of an unemployment fund, financed with social security resources, will ensure severance payment in case of termination without cause;

5.         The telework system should be revised to include job promotion rules, considering it is the most important source of employment worldwide;

6.         Feasible systems may be enforced within a framework of adequate regulation;

7.         Health care will play a crucial role in the future, and resources should be used efficiently and with the necessary research and production tools for supplying vaccines, medicines and any preventative elements.

8.         Collective bargaining should encourage the use of new technologies, remote work in its different forms, access to robotics for the community of working people, paperless environments, computers and AI that will soon emerge in the real world.

Society has suffered all pandemic evils: a paralyzed economy, restrictions for most activities, delayed vaccination and virtually non-existing curative medicine for now.

As different experts’ groups are discreetly suggesting, it would be really a step forward for survivors to get ready for the transition stage and find a way out to get to the new normal in an optimistic context of development, innovation 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.

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