Under Argentine law a labour relationship exists when one person provides personal services to another in exchange for remuneration, while in a legal, economic and technically subordinate position. These arrangements need not be in writing to constitute a legally binding agreement between the worker and the employer. An essential requirement of a work contract is that the employee receives payment for rendering services.
All labour relationships in Argentina are governed by the Labour Contract Law (20,744), and thus the Constitution and international treaties and conventions with international hierarchical status. However, other employees (eg, public sector, domestic service and rural workers) have their own specific statutes.
Labour law sources
There are four basic labour law sources:
- laws governing labour contracts;
- collective bargaining agreements;
- agreements between the parties; and
- customs in the workplace.
Collective bargaining agreements tailor the general provisions of the law to particular situations (eg, a specific industry sector or employer). These agreements are negotiated between the relevant union representatives on the one hand and the management of different industry sectors or a specific company on the other.
Main labour contracts
The main types of labour contract include:
- labour contracts for an indefinite period, which includes a three-month trial period;
- fixed-term contracts – an exception to the general principle that all labour contracts are for an indefinite period;
- labour contracts for extraordinary/special services;
- seasonal labour contracts;
- apprenticeship contracts; and
- part-time labour contracts.
Termination of labour contract
The key issues to consider when bringing a labour relationship to an end are:
- the reasons for the termination;
- the appropriate prior notice of termination where relevant; and
- the amount of compensation which may be due.
There are a variety of situations in which a labour relationship may be terminated:
- The employer and employee may mutually agree to terminate the relationship.
- The employer may dismiss the worker with or without just cause.
- The employee may resign or retire.
- The labour contract may come to an end in the event of the death of the employee.
- Outside events may dictate dismissal by the employer or in the case of a fixed-term contract it may simply expire.
The employee must also give notice to the employer when terminating the relationship. In all cases the employee must receive any outstanding wages, holiday pay and proportional entitlement to a semi-annual bonus.
Further, the employer is obliged to pay the employee a severance payment calculated by reference to the period during which the employee has been working for the employer (seniority payment) if the employer dismisses the worker without just cause or due to force majeure or economic events that cause job destruction, bankruptcy or incapacity of the worker.
Registration and procedural formalities
It is vital that the employer complies with all the procedural or formal obligations that arise with regard to a labour relationship. If they are not complied with, the employer will be obliged to pay increased levels of compensation (fines) to the employee in the event of a dismissal. For instance, the employer must ensure that the employee is correctly registered in the Labour Registry System. Other formalities include the following:
- The employee registration book – the employer must record employee data in a book which is stamped and numbered by the Labour Authority. This book must contain the basic data of all employed personnel, including:
- civil status;
- date of employment; and
The book must be available for judicial inspection and Ministry of Labour inspectors. The employer must take particular care to ensure that records are correct and complete. Failure to comply with this obligation may trigger the enforcement of fines.
- Payment to employees – correct documentation and accreditation of payments to employees with complete information of the employee and his or her salary.
- Work risk insurance – is financed both by employer and employee. This labour matter is ruled by the Labour Risk Act, the main purpose of which is the prevention of work accidents and illnesses.
- Other mandatory insurance – employers are required to hire a life insurance policy for their employees. The mandatory coverage is of Ps20,000 per employee.
Argentine labour law regulates the quantity of hours per day or week that an employee can work, part-time salaries, night work and overtime pay:
- Working day – under eight hours with a maximum of 48 hours per week. Any hour between 9:00pm and 6:00am is equal to one hour and eight minutes in order to calculate the number of hours to be included in a basic working day. If the specific work has been declared unhealthy by the Labour Ministry, then working hours may not exceed six hours per day and 36 hours per week. In the event that an employee works more than two-thirds of the full-time schedule he or she could be considered to be a full-time worker. Hours worked in excess will be payable at overtime rates.
- Overtime pay – hours of work in excess of the basic working day are payable at overtime rates equivalent to 50% (time and a half) surcharge over the normal wage. However, after 1:00pm on Saturdays, Sundays and holidays, the surcharge is 100%. Night shift workers do not receive overtime pay for night work. Part-time workers cannot work more than two-thirds of the normal working schedule and are not able to work overtime hours.
- Timetables – timetables stating the employee's work schedules must be posted in an area that is clearly visible for all employees.
Holiday and leaves of absence
The employer must grant employees the appropriate amount of holiday days as well as special leaves of absence for illness and important personal events in the employee's life. During these absences the employee will receive normal pay from the employer, with the exception of maternity leave when the employee will receive social security benefits (however, these are equal to the normal salary payments from the employer and are normally paid by the employer).
Entitlement to holiday days
In order to qualify for the full holiday entitlement, the employee must have been in employment with the employer for a minimum of six months. However, if the employee has worked less than six months he or she is entitled to one day of holiday for every 20 days worked.
Click here to view table.
The calculation is made as of December 31 each year. The employer fixes the holiday period and must give each employee 30 days' prior notice of the dates assigned for vacations.
Special leave of absence
The law provides for leaves of absence in certain specific circumstances (eg, the birth of a child, maternity leave, marriage, death of a relative and high school or university examinations). As indicated above, the employer will pay the employee the usual salary during leave of absence.
Absence due to illness
An employee who is absent from work due to an accident or an extended illness not related to work is entitled to collect his or her normal salary while away. The worker may receive his or her normal salary for up to three months of illness if he or she has been working for the same employer for less than five years or up to six months if he or she has been working for the same employer for more than five years. If the worker has dependents, these periods are respectively extended to six and 12 months. The employer may cease paying the employee's salary after the above mentioned periods have elapsed.
Salary withholdings and contributions
Pursuant to Argentine labour law, employers and employees have certain obligations to make social security contributions for family allowances, medical services, pensions and unemployment benefits. Further, pursuant to many collective bargaining agreements, union dues of 1% to 2.5% of salaries may be withheld from employee salary payments for employees who are covered by those agreements. The employer will also be required to withhold amounts due in respect of income tax payable by the employee.
Withholdings and contributions are amounts calculated as a percentage of the individual employee's salary which must be deposited in the relevant accounts with the Argentine Tax Administration. The percentage amounts for both withholdings and contributions are based upon the employee's gross remuneration as provided in the table below:
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For further information on this topic please contact Javier E Patrón or Enrique M Stile at Marval O'Farrell & Mairal by telephone (+54 11 4310 0100), or email (firstname.lastname@example.org or email@example.com). The Marval O'Farrell & Mairal website can be accessed at www.marval.com.ar.
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