New laws eliminate fines for labour law breaches

At a glance

• On 9 July 2024, Law No. 27.742 'Bases and Points of Departure for the Freedom of Argentines' came into force (Law).
• The Law eliminates the labour fines established in: (i) articles 8 to 17 of Law 24,013; (ii) article 9 of Law 25,013; (iii) article 1 and 2 of Law 25,323; (iv) articles 43 to 48 of Law 25,345; and (v) article 50 of Law 26,844.

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The implementation of the new Law means the elimination of fines due to:

• Lack of, or deficient, registration.
• Lack of, or late delivery of, labour certifications.
• Failure to pay severance payments on time.
• Failure to pay social security contributions withheld from the employee to the Tax Authority.

The Law also makes some general amendments to the individual work regime:

• Employee registration must be simple, immediate, and carried out through electronic means. Companies with 12 or more employees must pay a single amount for all obligations arising from legal labour relations and social security. From this amount, the collecting entity will distribute each component to the corresponding recipients (AFIP or ANSES).
• In the event of a court judgment determining that a labour relationship is classified as a work or service contract, any debt imposed on the employer will deduct the components already paid according to the respective regime (for example, if the individual paid social security obligations through monotributo - a tax category for independent workers - these amounts will be deducted from the social security debt imposed on the employer).
• The single registration system (Law 24,013) is modified. The employee may choose a provider from the national health system and cannot be compelled to use the one imposed by the employer.

The Law also makes amendments to the Labour Contract Law:

• It initially excludes employees of the public administration, domestic workers, agricultural workers, and contracts for work, services, agencies, and those regulated by the Civil and Commercial Code of the Nation.
• It removes the presumption of an employment contract in cases of work or professional service contracts when corresponding receipts or invoices are issued with these forms of contracting.
• Employees will be considered employees of those who register the employment relationship, even if they were hired to provide services to third-party companies. These third parties will be jointly liable for labour and social security obligations regarding the services provided, only for those obligations accrued during the actual provision of services to them.
• The probationary period is extended to six months, which can be extended to eight months by collective bargaining agreement for companies with 6 - 100 employees, and up to one year for companies with up to five employees. During this period, either party may terminate the employment relationship without entitlement to severance pay. Regarding the probationary period, the following should be noted:
• A probationary period cannot be used more than once for the same employee.
• Abusive use of the probationary period to avoid the regularisation of employees may be subject to penalties.
• During the probationary period, both parties have rights and obligations inherent to the employment relationship, including the recognition of the employee's union rights.
• Both parties are obliged to make social security contributions.
• The employee is entitled to benefits for work-related accidents or illnesses.
• The probationary period will be counted as service time.
• The employer must register the employee at the beginning of the relationship and not after the probationary period ends; otherwise, it will be deemed that the probationary period was waived.
• Employees hired by contractors or intermediaries may request that the company for which they provide services withhold amounts owed to them by the contractor or intermediary, such as remuneration, indemnities, or other rights arising from the employment relationship.
• The prohibition of working due to maternity before childbirth must be at least ten days; the remainder of the licence period (80 days) may be accumulated after childbirth.
• Some important issues regarding justifiable dismissal are regulated:
• The judge must assess justifiable cause considering the specific circumstances and modalities of each case.
• Active participation in blockades or seizures of establishments may constitute a serious labour offence and a cause for dismissal.
• Severance payments for dismissals motivated by discriminatory acts are increased. The increased severance payment can amount to up to 100% of the regular severance payment.
• Through a collective bargaining agreement, parties may agree to replace the severance payment with a fund or termination payment system. Employers may also choose to opt for a private system at their own cost to cover severance payments or agreed-upon sums in case of mutual termination.
• It is established that independent contractors may have up to three other independent contractors to carry out their business. This relationship will be based on autonomous relations without creating dependency or an employment relationship between them.