Argentina’s Labour Reform Loses in Court as Judges Strike Down Severance Cap
ARGENTINA · LABOUR Key Facts —What happened: A national labour appeals court in Argentina declared a severance article of Milei’s reform unconstitutional. —The article: Article 55 of Law 27.802 caps the inflation-updating of severance in pending lawsuits at 67 percent. —Why it fell: Judges said it cuts workers’ property, breaks equality and violates the constitution’s […] The post Argentina’s…
The Argentine labour court has ruled that an article of President Javier Milei's labour reform, which caps the inflation-updating of severance payments in pending lawsuits at 67 percent, is unconstitutional. The ruling comes from the National Labour Appeals Court's Sala I, which is the highest-ranking court in the country so far to strike down the provision.
The court said the cap violates workers' property rights, breaks equality principles, and clashes with the constitution's protective clause for labour. The ruling affects the Labour Modernisation Law, which caps the inflation-updating of severance credits at 67 percent in ongoing lawsuits. The reform aims to reduce the cost of firing employees, but has been met with resistance from unions and workers who argue the cap undermines their rights. The final decision on the severance cap is expected to come from the Supreme Court.
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