Argentina’s Senate is poised to approve a sweeping reform of labor laws aimed at weakening unions and reducing labor costs for companies.
The government of the self-proclaimed “anarcho-capitalist” president, Javier Milei, says that the initiative will help reactivate formal employment, after 290,600 registered jobs were lost between December 2023, when he took office, and November 2025.
But opponents say the measure – which includes cuts to severance pay and extends the maximum work day from eight to 12 hours – would not increase employment or improve the quality of employment.
Informal employment is now at its highest level since 2008 and affects more than 43% of workers. The so-called “labor modernization law” would reform long-standing labor legislation shaped by Peronism, the movement that brought General Juan Perón to power in 1946.
“He is in favor of companies, employment and employees. He is against unions and lawyers,” said Francisco Paoltroni, a senator from Milei’s ruling party, La Libertad Avanza (LLA).
Juan Manuel Ottaviano, a labor lawyer and academic, described the bill as “unconstitutional.” “It imposes serious limitations on individual rights in the workplace and weakens their protection through unions,” he said.
After making gains in the October midterm elections, Milei’s party won congressional support for reform. The bill has already passed both chambers and returns to the Senate due to an amendment introduced in the lower house: the elimination of a widely repudiated article that reduced wages during sick leave, even in cases where workers suffered from life-threatening conditions.
The legislation would allow companies to negotiate directly with employees, potentially overriding sectoral collective agreements. In Argentina, unions typically represent workers across the country within each industry, seeking to standardize wages and benefits across regions. The reform would also reduce dismissal costs by creating a severance fund partially financed by the state and by excluding bonuses from compensation calculations.
It would abolish specialized national employment tribunals and introduce a “time bank” system that would limit overtime pay. Although the weekly work limit would remain 48 hours, daily shifts could be extended to up to 12 hours with a mandatory 12-hour rest period.
The vote comes amid struggles in the manufacturing sector amid import liberalization and weak domestic demand. According to the national statistics institute, factories operate at only 53% of their installed capacity.
On the eve of the bill’s debate in the lower house last week, the 86-year-old tire maker Fate announced it would close.
“We are talking about lengthening the working day while more advanced countries reduce it,” said Alejandro Assumma, a plant worker and representative of the tire workers union, Sutna. “This reform means more exploitation and fewer rights,” Assumma said, adding that some of his formerly laid-off colleagues are now Uber drivers or resellers.
Martín Rappallini, president of the Argentine Industrial Union (UIA), which represents manufacturers and helped draft the bill, said protests would be “very, very limited: they will not be able to occupy factories or block access.” He added that these types of actions were common under “the previous regime, where excesses and extreme leftist situations were allowed.”
Rappallini acknowledged that the reform “will not create jobs overnight,” but said it would provide “predictability to labor relations in Argentina.”
As Congress debated the legislation over the past two weeks, clashes broke out in the streets. Police fired rubber bullets at protesters and journalists, while some protesters threw Molotov cocktails near officers. Last week, the country’s main union center, the General Confederation of Labor (CGT), called a general strike. Carlos Alberto Dawlowfki, a 76-year-old retiree, was among the dozens arrested in the demonstrations in front of Congress.
“It was very painful to see them shoot 18- or 20-year-olds,” Dawlowfki said. “They grabbed them with rubber shotguns – boom, boom, boom – and shot them.” None of the more than 200 articles in the bill, he added, “are for the worker.”
