Fewer than 50 percent of the leading firms in Argentina are obliged to a make a salary adjustment under new terms of the Collective Bargaining Agreements and a third are still in discussion.

This information was confirmed in a report from an independent organization (SEL) produced in June of this year, and published recently in a news release of the journal IProfesional. According to this study, the average salary adjustment already agreed is 24 percent, with a very low dispersion rate. Such adjustments are, in general, to be paid in two installments.

This increase is in line with the percentage budgeted for this year by the leading companies (23.7 percent) and significantly below the average increase in wages in the private sector in 2011 (31.7 percent).

However, it is between four to six percentage points higher than the guidelines originally proposed by the Government.

Furthermore, around 40 percent of the new agreements end this year, reducing the period of enforcement, in order to analyze the impact of inflation.  While it is likely that the increase in wages is not far below the increase in retail prices, the reduction of the period of enforceability constitutes a clause of reinsurance against inflation.

In addition, there is a trend in the current round of salary negotiations: delay in starting negotiations, in the negotiating process and in reaching an agreement.

In 7 percent of cases, the Convention has expired and negotiations have not yet started. The report states that this is a result of the uncertainty associated with the slowdown in the activity of the country and the conflicting signals from government about the revenue policy.

Union and political disputes are also part of the problem.  A further reason for the delay in the negotiations is that unconcluded demands are higher than those from the conventions that have already been concluded.

Currently, companies are expecting to negotiate increases of 25 percent, along the lines of previously concluded agreements.

While more than half of the leading firms indicate that the difficulty in negotiating is similar to last year, 35 percent believe that the difficulty has increased.

An indicator of this is that the labor authorities declared under compulsory settlement process a fifth of the cases negotiated (including the conventions still underway), while 27 percent of the unions carried out enforcement measures.