INTRODUCTION
While the country of Argentina is best known to be the great footballing nation of Maradona and Messi, there is a new figure in the country who is making the headlines. The new Argentine Leader, Javier Milei, is a radical reformist who is a self-proclaimed libertarian. Argentina has been a location of political and legal chaos for a long time. It is also one of the worst-performing currencies in the world. Interventionist economic laws and rigid labour laws are two major reasons for the cause of Argentina’s economic downfall.[1] Interventionist policies lead to short-term solutions but create economic pressure over some time. Price controls can disrupt supply and demand creating financial uncertainty. Whereas government subsidies can wreck the public finance and over-reliance of the population on the state welfare which hinders the country’s private sector growth. Milei’s new legal reforms seek to abrogate more than 350 existing laws that would reduce strict government intervention in the South American Nation. By resisting the domination of interventionist policies and rigid labour laws Milei aims to globalise the country’s economy. The implementation of the legal reforms and the practicality of the reforms are yet to be seen. However, the policies of Javier Milei might reflect the necessary changes other nations undergoing financial hardships must adapt to overcome their current scenario. Moreover, even India which is going through its privatisation phase along with other socio-legal changes should monitor the reforms of Argentina for better governance.
ANALYSIS OF ARGENTINA’S REFORMS
The Decree of Necessity and Urgency (DNU) announced by President Javier Milei on December 20, represents a significant change in Argentina’s economy and labour laws.[2] This decree focuses on restructuring labour laws and ends around 350 existing regulations. The decree heavily focuses on the deregulation and liberalisation of the economy and aims to boost the private sector.
One of the primary concerns of the decree is its impact on labour laws, with at least eleven labour laws going through significant changes. The Labour Law in Argentina is regulated mainly by the Labor Contract Law No. 20,744. The Labour Contract Law governs the terms and conditions of the employment. The central modification revolves around the Employment Contract Law 20,744 which governs the rights and responsibilities of both employers and workers. The most notable change is the extension of the probation for employees from the usual three months to an extended eight months. During this period either party can end the employment relationship without providing a reason and without compensation, but with the obligation to give advance notice.
In Chapter 9 of the decree, introduces the concept of essential services restricting the ability to strike in various economic activities. It mandates the continuation of at least 50% of services during strikes rising to 75% for essential activities. Essential services include health, transportation of medical supplies, telecommunications, and education, among others. This has been criticised by many as an infringement of the worker’s rights to protest.
Article 81 of the DNU talks about Compensation for dismissal as it is also significantly altered. The decree reduces the compensation for dismissals without cause from two to one month’s salary for each year of service. Employers now have the option to choose a private capitalization system to cover these costs or they may establish a labour termination fund with the financial burden always falling on the employer.
Some other significant legal reforms in the decree are as follows
- Article 80 provides legal impunity to the companies for not providing proof of employment to employees after termination leading to a decreasing burden on corporations.
- Article 245 allows the employer to terminate the employee based on their ethnicity, race, nationality, sex, gender identity, sexual orientation, religion, ideology, or political or union opinion. This is only permitted if the employee is compensated for his labour.
- Article 277 allows the employer to pay the compensation over a period of twelve months after being convicted in a trial court. Thus reducing financial constraints on the employers.
President Javier Milei’s Decree of Necessity and Urgency reflects an extreme change in Argentina’s economic path. The unprecedented reforms in labour laws and the forced push for economic liberalisation signify a concerning effort to create a more capitalist environment but activists, legal experts, workers and others have pointed out the possibility of human rights violations by the decree as it may restrict labour rights. The real-life consequences of the decree on different sectors are the subject of much-needed analysis. As of January 2024, the National Chamber of Labour Appeals has temporarily blocked the implementation of the DNU. However, it is anticipated the President will try to appeal the court’s decision and move ahead with the decree.[3]
COMPARISON WITH INDIA
India is also going through a reformist period in its history. The current government has been responsible for 72% of the disinvestment since 1991.[4] While India has a reformist disinvestment policy and even reforms in labour laws, India has made sure to protect the worker’s rights. The new labour codes were first introduced in 2020 and implemented in 2023. Four new labour codes have been introduced instead of the 29 pre-existing labour codes. The four labour codes and some of their features are –
- Minimum Wage Code: The code deals with the fundamental rights of the workers to receive a standardised minimum wage. This legal framework along with the Payment of Wages Act provides security to both organised and unorganised sector workers.[5]
- The Occupational, Safety, Health, and Working Conditions Code: Comprises 13 labour laws to ensure a secure work environment. The code reduces mandatory workdays from 240 to 180. It provides paid maternity till 26 weeks and allows women to work night shifts with consent.[6]
- Industrial Relation Code: It gives importance to trade unions and prevents future strikes. Swift justice is ensured with disputes settled within a year by a tribunal, and a two-member industrial tribunal expedites case resolution. A trade union with 51% votes becomes the negotiating party, and in the absence of a clear majority, a council of trade unions negotiates with employers.[7]
- The Social Security Code: It primarily focuses on offering free treatment for both organised and unorganised sector workers. Hazardous work requires ESIC registration and benefits platform/gig workers. The PF scheme now includes self-employed individuals, and fixed-term employees receive gratuity without a minimum service clause. A national database for unorganised sector workers is introduced along with online vacancy reporting for employers. Unorganised sector workers receive Aadhaar-based UAN for ESIC and PF benefits[8].
CONCLUSION
The two G20 nations try to tackle the same problems through a vastly different approach while their goals remain the same. India puts priority on the welfare of its workers over corporations whereas the decree proposed by the Argentine government has been criticised for its possible fundamental rights violation. As two developing countries try to liberalise their economy while reforming labour laws it is crucial to monitor these changes as they highlight which reformist model would be more efficient. The evolving scenarios in these nations underscore the global significance of finding the importance of balance between economic reforms and labour law.
Author(s) Name: Vishwaroop Chatterjee (Rajiv Gandhi National University of Law)
Reference(s):
[1] Geethanjali Nataraj and Pravakar Sahoo, ‘Argentina’s Crisis: Causes and Consequences’ (2003) 38 Economic and Political Weekly 1641 <https://www.jstor.org/stable/4413486> accessed 16 January 2024
[2] Gimena Sanchez, ‘Emergency Measures Trump Democracy and Human Rights in Argentina’ (WOLA28 December 2023) <https://www.wola.org/analysis/emergency-measures-trump-democracy-human-rights-argentina/> accessed 16 January 2024.
[3] Martina Jaureguy, ‘Judiciary Blocks Milei’s Mega-Decree Labor Reforms’ (Buenos Aires Herald3 January 2024) <https://buenosairesherald.com/politics/judiciary/judiciary-blocks-mileis-mega-decree-labor-reforms> accessed 16 January 2024.
[4] TCA Sharad Raghavan, ‘Govt Not in Business: Modi Govt Accounts for 72% of All Disinvestment since 1991, Data Shows’ (ThePrint31 October 2022) <https://theprint.in/economy/govt-not-in-business-modi-govt-accounts-for-72-of-all-disinvestment-since-1991-data-shows/1185450/> accessed 16 January 2024.
[5] Code on Wages 2019
[6] The Occupational Safety, Health and Working Conditions Code 2020
[7] The Industrial Relations Code 2020
[8] The Code on Social Security 2020
