Agricultural Labor Regime

On December 28, 2011, the Official Gazette published Law No. 26,727 which was enacted on December 21, 2011, and which established the new Agricultural Labor Regime (“ALR”). This law has replaced Law No 22,248, its modifications and the procedural decree, and introduced significant news on this subject.

This regulation eliminated the former registry locally known as “RENATRE” and replaced it with the National Registry of Agricultural Workers & Employers (hereinafter “RENATEA”), a self-governed entity under the scope of jurisdiction of the Ministry of Labor, Employment and Social Security.

Furthermore, the new law has determined that Labor Contract Law No. 20,744 (LCL) shall be supplementarily applied in any compatible aspect, which may not be contrary to the ALR’s nature and specific features.

One of the most important aspects that we should mention is the regulation of the contractual methods of agricultural work, which provides i) an evergreen contract with continued performance; ii) temporary contract (these two cases are similar to the ones established by the previous law) and adds a new type of contract: iii) an evergreen contract with an intermittent performance (which is similar to the seasonal contract provided by the LCL). The latter contract shall be applicable whenever a temporary worker is hired by the same employer more than once, and for consecutive periods, for the performance of seasonal or cyclical duties.

The law forbids the execution of probationary contracts, and refers to the LCL for the termination of the employment contract, with the exception of certain specific aspects such as: i) the introduction of a minimum severance for seniority for evergreen workers which –generally- equals to two (2) monthly salaries, by considering the best monthly, regular and normal salary accrued during the previous year (or within the time of services, if less than one year) as a calculation basis; and ii) the compensation for dismissal without cause that is awarded to evergreen workers with intermittent performance and which adds a severance for damages (with grounds in common law) to the statutory severance for seniority set by the LCL, for the sole interruption of the contract before its expected expiration date.

The new rule intends to promote the employment of temporary workers by granting, for example, a 50% reduction over the employer’s contribution for a period of 24 months. However, the law forbids hiring these workers throughout third parties, including Temporary Services Agencies duly authorized by the labor authority.

Remunerations will be set by the National Commission of Agricultural Work and shall not be lower than the minimum wage currently in force. Evergreen workers will receive a bonus for seniority which could be up to 1.5% over the base remuneration of their category. Furthermore, the law forbids paying the remunerations with any currency other than local, as well as performing deductions from wages to cover the provision of goods for the personnel.

The workday of the personnel that falls within the scope of the ALR shall not exceed from 8 daily hours and 44 weekly hours -9 daily hours on a day-shift in case of uneven weekly distribution- starting on Mondays until Saturdays at 1 PM. Work performed from Saturdays at 1 PM till Sundays at 12 PM is forbidden, unless there is an exception, upon which, a day off shall be granted within the next 7 following days.

Furthermore, the law provides a maximum of 30 overtime hours per month and of 200 per year.

As regards leave of absence, the law provides the application of the license regime set forth in the LCL, in addition to the licenses set by the ALR, among which, we should expressly mention the parental license for childbirth, which entitles the male worker to collect his salary for 30 calendar days, and can be taken within 45 days before the birth and 12 months after.

The law also covers aspects related to minors, by prohibiting the occupation of minors under 16 years of age and protecting teenage work –between 16 and 18 years of age- creating, for example, a part time workday.

As regards the social security regime, agricultural workers shall be entitled to retire with 57 years of age and after rendering services for 25 years (with applicable withholdings), regardless of their gender.

As to the employer’s contributions, the ones provided by the ordinary regime –locally known as SIPA- shall be applicable, and will be increased by 2%.

The Executive shall issue the procedural regulation of the new regime within a term of 60 days to be counted as from the law’s enactment.