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As I wrote recently, Argentine president Javier Milei is embarking on the next big test of his reform agenda: taking on the big unions. Having reined in hyper-inflation and won a decisive victory in mid-term elections last year, Milei is determined to loosen up the country’s restrictive labour laws.
And the big unions are just as determined to protect their turf and their privileges.
Argentina’s largest trade union group on Monday filed a lawsuit to block a sweeping labor reform promoted by President Javier Milei and aimed at radically altering labor relations in the South American country.
The reform, which was approved Friday by Congress, grants employers greater flexibility in matters of hiring, firing, severance and collective bargaining and seeks to limit the historical power of unions.
Milei faces some big hurdles in this latest attempt to salvage Argentina’s long-moribund economy. Decades of Peronist rule sandbagged the country’s constitution with left-wing ‘principles’.
“This law represents a serious infringement of collective and individual rights that expressly violate constitutional principles,” the General Confederation of Labor, CGT, said in a statement after its lawyers filed the complaint in the courts of Buenos Aires.
The complaint challenges the reform’s constitutionality, arguing it violates both the “principle of progressivity,” which prevents the reversal of labor rights, and the “protective principle,” a legal standard aimed at preventing employer abuses and restoring balance to the workplace.
Argentina also has a high rate of union membership, nearly double that of New Zealand and nearly three times Australia’s: unsurprising, perhaps, given that over half of Argentina’s registered workers are on the government payroll; just as in Australia government workers make up the bulk of the unionised workforce. They have to guarantee their annual pay-rises somehow, even as their productivity plummets.
That’s registered workers, though. Perhaps indicating just how sclerotic the nation’s labour market has become, 40 per cent of the country’s workers are employed off the books.
Milei called the overhaul “historic” on Friday after its approval. “We have a labor modernization,” he said.
The legislative process has been fraught with tension between the governing party and the opposition. The friction boiled over last month during the bill’s debate in the lower house of Congress, as the GCT launched a 24-hour nationwide strike, while demonstrators from various leftist groups clashed with police outside Congress.
Milei considers the changes to Argentina’s half-century-old labor code crucial to his efforts to lure foreign investment, increase productivity and boost job creation […]
Unions argue that the law will weaken the workers’ protections that have defined Argentina since the rise of Peronism.
And that is probably unintentionally making Milei’s argument for him.
It was Peronism, after all, which took Argentina from being the most prosperous country in the world to another socialist basket-case.
