Labor aspects of the Emergency Decree [DNU]

1. Repeal of fines for lack of registration or deficient registration and late payment.

One of the most relevant aspects of the Emergency Decree is the repeal of the fines for lack or deficient registration of the labor relationship, provided for in Law 24,013.

Such law provided for penalties that resulted in the duplication and even triplication of compensation payments in cases in which the employer had not registered or had deficiently registered the employment relationship.

This is complemented with the repeal of Law 25,323, which provided for: (i) the doubling of dismissal compensation in case of lack or deficient registration of the employment relationship; and (ii) an increase of 50% of the compensations, when the employee was forced to take action to receive the payment of his severance indemnities.

Finally, the same compensation payment aggravation is eliminated in the case of employees of private homes.

2. Elimination of the presumption of recklessness and malice

The presumption of the existence of malicious and fearful conduct of the employer in case of failure to pay severance indemnities on time and without a justified cause, and the consequent fine, is eliminated.

3. Facilitation in the issuance of labor certificates and elimination of penalties.

The creation of a virtual platform for the issuance of labor certificates is encouraged, and the obligation to deliver such certificates is deemed to be fulfilled with the mere incorporation of such certificates in such platform.

Likewise, the Emergency Decree repeals Sections 43 to 48 of Law 25,345, which provided for penalties for failure to deliver such certificates, and for failure to pay social security contributions withheld from the worker.  

4. Simplification of registration of employees and registrations by third parties.

A new, more agile and expeditious mechanism for the registration of employees will be created.

5. Notification to Argentine Tax Authority [AFIP] of a court decision determining unregistered employment existence.

In the event of a final court decision determining the existence of an unregistered employment relationship, the judicial authority must notify the tax collection agency within 10 business days from the date on which the decision has become final.

From the debt eventually determined by the tax collector, the amounts paid by the individual as self-employed/independent will be deducted.

6. Application of the Labor Contract Law ("LCL") to independent contractors

The Emergency Decree incorporates to Section 2 of the LCL, and therefore excludes from the application of the labor law, the hiring of work, services, agency and all those regulated in the Argentine Civil and Commercial Code.

Likewise, Section 23 of the same law is modified, establishing that the presumption of the existence of an employment relationship in connection with the rendering of services will not apply to contracts for the lease of work or professional services or trades that require the issuance of official receipts or invoices by the provider,

7.         Principle of the most favorable rule

One of the most relevant principles of labor law is the application of the most favorable criteria to the employee, when there are doubts about the application of a law, interpretation of the same, or assessment of the evidence at court

The Emergency Decree incorporates a paragraph to section 9 of the LCL, establishing that the procedural rule by virtue of which the facts must be proven by the person who invokes them must be applied.

8.  Inalienability of rights and homologation of agreements

Another relevant modification to one of the most important institutes of labor law is the possibility that the employer and the employee may agree on modifications to essential conditions of the employment contract and request the approval thereof by the authority.

The possibility of requesting the approval of the agreements for the termination of the labor relationship by mutual agreement is also enabled (art. 241 LCT).

9.         Probationary period

The Emergency Decree extends the trial period to 8 months.

10.       Payment of remunerations: modalities and formalities.

The means of payment of remunerations are extended, authorizing other categories of entities that the authority of application of the payment system considers suitable, safe, reliable, and competitive, eliminating also the requirement of the salary bank account.

The Emergency Decree seems to open the way to payment modalities through, for example, virtual wallets.

Likewise, electronic pay slips are expressly enabled.

11.       Period of maternity leave

The Emergency Decree introduces the notion of "pregnant woman", and although it maintains the 90 days of maternity leave, it allows to opt to work up to 10 days before the birth, against the 30 days originally foreseen, accumulating the remaining period (until reaching the total 90 days), post birth.

12.       Working hours

The agreement by collective bargaining of extensive schemes of overtime, bank of hours, free time, etc., is allowed, provided that the 12 hours daily rest between working days are respected.

13.       Dismissal with just cause

The Emergency Decree incorporates an addition to section 242 of the LCL, expressly establishing certain conducts that are considered serious labor injury, and that consequently enable dismissal with just cause, namely: (i) participation in blockades or seizures of the establishment; and (ii) when during a direct action (strike), (a) the freedom to work of those who do not participate in the measures of force is affected; (b) the entry of persons or things to the establishment is prevented or obstructed; (c) damage is caused to persons or things of the company or third parties.

14.       Dismissal without just cause

The Emergency Decree modifies substantial aspects regarding dismissal without just cause:

a.         Compensation calculation basis:

- The 13^th Salary and concepts of semi-annual or annual payment are expressly excluded from the salary base (in application of the criterion of the recognized "Tulosai" ruling).

- In the case of variable or commission remunerations, an average of the last six months is applied, or of the last year if it is more favorable to the employee.

- It incorporates the criterion of the recognized "Vizzotti" ruling, establishing that the calculation basis may never be less than 67% of the amount corresponding to one month's salary.

b.         Replacement of the indemnity system

- The replacement of the indemnity system by a severance fund whose cost is to be paid by the employer, with a monthly contribution of no more than 8% of the remuneration, is enabled.

- It allows employers to contract a private capitalization system to cover the cost of severance pay and/or the amount agreed between the parties in case of mutual agreement.

15.       Aggravation of compensation for discriminatory dismissal

The DNU incorporates an increase in compensation of between 50% and 100%, to be defined by the labour judge, in cases where the worker proves in court that the dismissal was motivated by reasons of ethnicity, race, nationality, sex, gender identity, sexual orientation, religion, ideology or political or trade union opinion.

16.       Case of reinstatement of the worker

The DNU modifies Art. 255 of the LCT, establishing that, when a worker returns to work for the same employer, the amounts previously paid on the occasion of the termination may be deducted, although, unlike the previous text, these will be updated by the Consumer Price Index (IPC) plus a pure interest rate of 3% per annum.

17.       Updating of labor credits

A criterion of federal application and public order is established with respect to the updating of labor credits. In no case may the discount be higher than that resulting from applying the CPI plus a pure interest rate of 3% per annum.

The purpose of this amendment is to put an end to the impact on labor claims of Act No. 2764 of the National Labor Court of Appeals, which substantially increased the amounts claimed in court.

18.       Ultraactivity of collective bargaining agreements

Once the term of their validity has expired, collective bargaining agreements will only continue to be in force as regards the rules referring to the conditions of the collective bargaining agreement.

19.       Delegates' assemblies and congresses and serious misconduct

The DNU incorporates an article establishing that they shall have the right to call assemblies and congresses, as long as they do not harm the normal activities of the company or affect third parties.

Likewise, it incorporates as prohibited conducts and serious infringements in terms of Law No. 23.551 those that affect the freedom of work of those who do not adhere to measures, cause blockades or takeovers of the establishment and prevent entry or exit to it, or when damage is caused to people or things belonging to the company.

20. Teleworking

The Teleworking Regulation is modified in the following aspects:

a.         Reversibility: the criterion of the law is modified, establishing that reversibility operates by mutual agreement of the parties and as long as there are facilities in the company for this purpose.

b.         Care tasks: the power to coordinate with the employer schedules compatible with such tasks shall not apply when the employer pays compensation for such tasks (e.g. day care centres).

c.         Transnational work: it is established that in these cases the law of the place where the worker carries out the tasks shall apply.

 

21. Regime for travelling salesmen and saleswomen

The regime applicable to travelling salespersons for new hires is repealed.

22. Self-employed worker with collaborators

The DNU incorporates a new category of self-employed workers, establishing that a self-employed worker may work with collaborators.