Supreme Court Ruling Sets New Limit on Updating of Labor Credits
In the case “Lacuadra, Jonathan D. c/ Directv Argentina SA y otros s/ Despido” of August 13, 2024, the Supreme Court annulled a ruling that, because of the high inflation, had updated a labor credit using the CER mechanism (regulated by the Argentine Central Bank) +6% annual interest, with a compounding of interest at the time of serving the complaint.
In September 2022, the Court of Appeals on Labor Matters in the City of Buenos Aires promoted an update method based on the annual compounding of interest. However, in March 2024, the Supreme Court disqualified it.
In December 2023, the Government decreed a cap to the updated based on the index of evolution of prices +3% interest per year. Yet, in January 2024, the Labor Court of Appeals in the City of Buenos Aires disqualified it.
Starting in March 2024, Court of Appeals on Labor Matters promoted a new update method using the CER mechanism +6% annual interest, compounding interest once at the time of serving the complaint. However, yesterday the Argentine Supreme Court described it as arbitrary, since it found the result to be clearly disproportionate.
Further resolutions and news are expected in the upcoming days.
This insight is a brief comment on legal news in Argentina; it does not purport to be an exhaustive analysis or to provide legal advice.