Argentina’s Milei submits labor reform proposal to Congress

BUENOS AIRES, Dec 11 (Reuters) – Argentine President Javier Milei submitted a labor reform proposal to Congress, his office said on Thursday, in what it called an attempt to tackle excessive bureaucracy and a “rigid structure” that has held back formal job creation.

Argentina’s newly elected Congress – in which Milei’s party has gained more seats after October’s midterm election – is beginning a period of special legislative sessions in which Milei intends to push a series of reforms he has said are necessary to boost the country’s economy.

The proposed labor bill will seek to give employers more flexibility on working hours and vacations, as well as modify the system of severance pay in order to reduce costs for companies. It also provides financial incentives for employers to hire workers on-the-books and allows salaries to be paid in foreign currencies.

Unions have strongly opposed the bill, which also states that unions must receive authorization from employers to hold assemblies in the workplace and characterizes a union takeover or obstruction of entry to a workspace as a “very grave” infraction.

The General Confederation of Labor, the country’s main union federation, has planned a march for next Thursday in downtown Buenos Aires to oppose the reform.

The bill has support, however, from industry chamber the Argentina Industrial Union, whose president Martin Rappallini told Reuters that the sector has suffered from growing competition from cheaper imports under Milei.

“We hope this will little by little start a process to change the dynamic of loss of employment,” he said. “Argentina needs to generate formal work.”

(Reporting by Gabriel Araujo and Lucila Sigal; Writing by Leila Miller; Editing by Daina Beth Solomon and Rosalba O’Brien)