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back to index backLATINtalk December,  2016

Amendments to Argentine Employment Contract Law

Argentina's National Congress approved a series of amendments to its Employment Contract Law (ECL). Said amendments have yet to be enacted and published in the Official Gazette and, as such, for the time being are devoid of any legal effect. Their enactment and publishing, however, is expected to take place in the upcoming days.

Additionally, the National Senate approved a bill that seeks to modify article 67 of the ECL. In general terms, the approved amendments seem to extend the right of workers. Each of these is detailed below.

I. Article 54 ECL

As of its entry into force, this new article of the ECL will be worded as follows: "Applying registries, spreadsheets or other elements of control. Identical validity requirements must be met by the registries, records, spreadsheets or other elements of control demanded by the laws and their regulations, professional statutes or collective bargaining agreements, which shall be judicially judged pursuant to the provisions of the previous article."

In its previous wording, this article established that the validity of registries, spreadsheets and other elements of control was subject to judicial evaluation. Within its amendments, the new article 54 of the ECL includes "the laws and their regulations" amongst the normative sources that can provide for registries, spreadsheets or elements of control, and, as such, appears to be of a more rigorous nature than the previous version.

II. Artículo 71 LCT

Article 71 of the ECL shall read: "Knowledge. The controls referred to in the previous article, as well as those related to the employees activity must be known by him/her".

Article 70 of the ECL to which this provision refers, sets the standards for the exercise of personal controls on the employee. The new wording of article 71 of the ECL implies a shift in focus given that it is now the employee who must be made aware of the personal controls to be applied, whereas before such awareness was due to be raised upon the enforcement authorities.

Likewise, this amendment seems to indicate that the controls that the employer is entitled to conduct as a result of article 70 of the ECL are not only limited to those personal controls on the employee , but also to the latter's activity. This reveals that the new norm acknowledges the existence of more sophisticated controls, for instance the monitoring of the computers used by employees.

No indication is made as to what type of knowledge must the employee have of the controls being implemented by the employer. Therefore a list of the requirements to be met for the purpose of making employees aware of the measures of control in place is missing. In this regard, it is yet to be seen whether general communications to all staff can be considered sufficient.

III. Article 75 LCT

In its new wording, article 75 of the ECL establishes that: "Duty of Safety. The employer must ensure that the guidelines on and limitations to the duration of work established in the law and related regulations are observed, and adopt the measures that according to the type of work, the experience and the technique are necessary to protect the psychophysical integrity and the dignity of the employees, needing to avoid the harmful effects of the risky tasks or such tasks causing old age or premature exhaustion, as well as those derived from unhealthy or noisy environments.

The employer is obliged to observe the relevant legal and regulatory provisions on health and safety at the workplace. The worker may refuse to provide services, without that causing the loss or reduction of his/her remuneration, in the event that these were required in violation of such conditions, provided there is an imminent danger of damage or that the obligation has been breached, and that the employer has fallen in arrears, or if having the competent body declared that the place is unhealthy, the employer does not perform the work or does not provide elements that the competent authority had established (emphasis added)."

Although in a different word-order to the one currently in force, the new provision maintains the employer's obligation to both, observe the legal and related regulations on health and safety at the workplace, and make others observe the limitations to working hours.

New provisions are those that we have underlined. By virtue of the first paragraph, the employer is required to adopt all necessary measures to preserve the physical integrity and dignity of its employees, limiting the potentially harmful effects of his/her work.

As a result of the second paragraph the employee is entitled to refuse to provide services whenever these are demanded in breach of the health and safety at the workplace regulations. Such decision does not negatively affect their remuneration. Aside from the cases in which there is an evident breach to the regulations on health and safety at the workplace, in such cases where the breach is not as evident, the provision appears to grant the employee the possibility of deciding on sensitive issues such as the cessation of operations whenever to his/her best understanding the applicable employer obligations on this matter are not met. Said analysis should actually be reserved to the enforcement authority, given that it has the technical knowledge required to determine the real breach of the employer's duties in this regard.

Additionally, the new article eliminates the provision that stated that the reparation of damages that the employees might suffer as a result of the employer's failure to comply with the regulations on health and safety at the workplace should be pursued under the Workers Compensation Law regime. It appears that the new article is also entitling employees to pursue such reparations through a civil suit.

IV. Article 147 ECL

The new article 147 of the ECL sets fort that: " In order to make the provisions contained in this article operative, the impediment of any preventive or executive garnishment that affects the salary of the workers must be implemented before the employer so that he makes the required withholdings. Now garnishments or seizure of any kind on the employees' salary accounts is allowed. The employer must, within 48 hours counted as from the date on which the garnishment has been made effective, make the employee aware of the measure by handing over a copy of the judicial resolution ordering such measure."

The new additions to article 147 seek to provide further protection to the employee, not only by establishing that no garnishments or seizure may be made effective on the employee's salary account, but also by mandating that the employer must make him/her aware of the measure. In practice, many employees learn that they are suffering a garnishment over their salaries at the time of receiving their monthly paychecks.

V. Article 255 ECL

The new wording of article 255 of the ECL is as follows: "Worker's re-hire. Deduction of compensation received. The employee's seniority shall be established pursuant to the provisions of articles 18 and 19 of this law, but if there was a re-hire with the same employer, nominal sums paid on account of the same cause of termination as that of the previous termination shall be deducted from the severance set forth in articles 245, 247, 250, 251, 253 and 254.

Under no circumstances may the resulting severance be lower than that which would have been payable to the worker if his period of services had been only the last one without computing the pre-reentry period (emphasis added).

The new wording is very similar to the previous one. Indeed, the underlined section is conceptually similar to the previous one, except for the fact that it indicates that what must be deducted is the nominal amount paid. Consequently, the requirement to update sums already paid according to the variation resulting from the salary index of the industrial peon of the City of Buenos Aires counted as from the date of the first payment until the new date of payment, is eliminated.

VI. Bill on the amendments of article 67 LCT

In the event that the bill receives the approval of the House of Representatives, article 67 of the ECL shall read: "Disciplinary powers. Limitation. Salary. The employer may apply disciplinary measures commensurate with the faults committed, or proven breaches incurred in, by the employee.

Within 30 calendar days as of the serving of notice of the measure, the employee may challenge its appropriateness and the type or extent of it, so that it is suppressed, substituted or limited as the case may be. The disciplinary sanction will be considered as consented, upon expiration of this term. When the sanction of suspension has been imposed, the employer can only deduct the corresponding salaries after the period provided for in the preceding paragraph provided the measure has not been challenged by the employee, or alternatively, if a judgments confirming the validity of the sanction is obtained (emphasis added)."

With the proposed additions, the bill seeks to protect employees' remunerations, ensuring that these are only subject to discounts based on disciplinary sanctions once the appropriateness of said sanctions is judicially confirmed or, alternatively, has not been challenged by the employees.

Source: Baker McKenzie - GAI

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