On Monday, 21 January 2019, the Secretary of Labor approved the agreement entered into by the Commerce and Services Trade Union (the "Union") and the Chamber of Commerce through Resolution 90/2019. The agreement established a new salary increase of 20% on top of the current salary scales as from March 2018, to be paid in installments on January, February and March 2019, according to the following schedule:

  • 7% in January 2019;
  • 7% in February 2019; and
  • 6% in March 2019.

Additionally, it was established that the Allowance of ARS 5,000, which was enacted through the Executive Order of Necessity and Urgency no. 1043/18 (the "Order"), shall maintain its non-remunerative nature.

We should bear in mind that by the end of 2018, the Executive had established the payment of a non-remunerative allowance of ARS 5,000 for the private sector employees; however, the Order established that for those cases in which re-adjustments of the original 2018 collective salary negotiations have already been agreed upon (whether by means of the "automatic trigger clause" or because they've been re-negotiated), employers would be able to offset the Allowance with such re-adjustments.

Additionally, with an unclear wording, the new agreement entered by the Union and now approved by the Secretary of Labor established in its 4th article that: "The parties agree that the non-remunerative allowance set forth in article 1 of Order no. 1043/18 shall maintain such nature".

Until today's approval of such agreement, commerce and services employers were within the scope of employers that could offset the Allowance, under the interpretation that it was unilateral. The Order established that in case of offsetting, the Allowance would acquire remunerative nature.

Bearing in mind the wording of the approved agreement, and as we had anticipated, we understand that the only possible way to maintain the Allowance as non-remunerative is by not offsetting it.

Therefore, we conclude that the most reasonable interpretation is that the collective bargaining agreed not to offset the Allowance.