Argentina’s Senate approved a broad and controversial labor reform on Friday, giving President Javier Milei a significant political victory. The government-backed bill passed with 42 of 72 senators voting in favor.
Milei hailed the vote as a milestone. “Historic! We have a labor modernization,” he said after the measure was approved.
The package, central to Milei’s free-market agenda, is designed to encourage hiring by reducing employer liabilities and limiting certain worker protections. Key elements include:
– Tightening limits on the right to strike
– Weakening unions’ collective bargaining power
– Making it easier for employers to dismiss staff
– Extending probationary periods for new hires
– Restricting workers’ ability to sue employers after dismissal
– Cutting severance pay, which has traditionally been substantial in Argentina
– Allowing employers to require 12-hour workdays instead of the current eight
– Reducing pay for employees on sick leave
Roughly 40% of Argentina’s workforce lacks formal employment contracts, and unions warn the reform could worsen job insecurity and informal work. The government counters that lowering costs for employers and reducing payroll taxes will encourage businesses to hire formally and shrink the informal economy.
The bill had been debated for months and rekindled sharp tensions between the ruling coalition, opposition parties, and labor organizations. Recent polling showed the public divided: about 48.6% in favor and 45.2% opposed.
Mass protests and labor action preceded the final Senate vote. Thousands took to the streets over two weeks to oppose what they called a rollback of workers’ rights. The General Confederation of Labour (CGT) organized a general strike that brought much of the country to a standstill. Several demonstrations near Congress saw clashes with police, though at least one major protest remained largely peaceful.
Union leaders said they would challenge parts of the law in court, and labor groups vowed continued resistance. Supporters, including Milei, argue the overhaul is necessary to modernize Argentina’s labor market and spur job creation in a country struggling with low formal employment and recurring economic crises.
The reform now becomes law after the Senate vote, setting the stage for legal challenges and further social and political contestation as the government moves to implement the changes.