On 7 September 2022, the National Chamber of Labor Appeals (CNAT), through Resolution no. 2764 ("Resolution"), modified the interest calculation scheme applicable to labor claims before the National Labor Court in Buenos Aires.
According to the Resolution, the new interest structure implies a significant increase in the calculation method.
Below are the highlights of the Resolution:
- The interest rate applicable to the labor jurisdiction will continue to be the annual effective lending rate due based on the general portfolio of Banco Nación.
- The annual capitalization of labor credits is reckoned from the date of the service of notice of the complaint.
- It is established that this new system will apply only to judicial cases without a final judgment in relation to applicable interest.
The annual capitalization of labor debts mentioned in (2) above has a significant impact on the final amount of a possible judgment. As an example, in a trial for events that occurred in 2016 (with service of notice in January 2018), the resulting award after applying the Resolution is three and a half times higher compared to the previous system.