Argentina's Milei submits labor reform proposal to Congress

President Javier Milei has introduced a new labour reform proposal to Argentina’s Congress, aiming to address what his administration describes as a "rigid structure" that has hindered job creation in the country.

The bill, unveiled on Thursday, is part of Milei’s broader economic reform agenda and seeks to tackle excessive bureaucracy while providing greater flexibility for employers.

The proposed labour reform includes provisions to allow businesses more control over working hours and vacation policies. It also seeks to modify severance pay, aiming to reduce costs for companies. Additionally, the bill introduces financial incentives for employers to hire workers on the books and would allow salaries to be paid in foreign currencies – measures intended to boost formal employment and improve Argentina’s business environment.

However, the proposal has faced strong opposition from unions. The General Confederation of Labour (CGT), Argentina’s largest labour federation, has vehemently condemned the bill, describing it as a threat to workers' rights. One of the most contentious aspects of the reform is a provision requiring unions to seek employer authorisation before holding workplace assemblies. Furthermore, the bill categorises union takeovers or the obstruction of workplace entry as "very grave" infractions.

In response, the CGT has announced plans for a protest march in Buenos Aires next Thursday to rally against the reform. The union argues that the bill undermines labour protections and grants excessive power to employers.

Despite union opposition, the proposal has gained backing from the Argentina Industrial Union, which represents business interests. Martin Rappallini, president of the Argentina Industrial Union, expressed support for the bill, noting that the country’s industrial sector has been struggling with increasing competition from cheaper imports. He stated that the reform could help reverse job losses by creating more formal employment opportunities.

"We hope this will, little by little, start a process to change the dynamic of job losses," Rappallini said.

The bill is part of Milei’s broader reform agenda, which includes measures aimed at boosting the Argentine economy. With his party securing more seats in Congress following the October elections, Milei is pushing for swift action on a series of reforms during the special legislative sessions now underway.

As the debate over the labour reform intensifies, the proposal’s fate remains uncertain. While business leaders have expressed optimism, unions remain steadfast in their opposition, and the reform’s impact on Argentina’s political landscape and labour market will be closely monitored in the coming weeks.

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