Argentina's Senate approved President Javier Milei's sweeping labor reform by 42 votes to 28, marking a decisive victory for the libertarian government against entrenched union power and Peronist opposition.
The legislation, reported by La Nación, fundamentally restructures Argentina's labor code with over 200 articles addressing work hours, severance payments, and employer obligations. Support came from Milei's La Libertad Avanza coalition alongside the center-right UCR, Pro, and provincial blocs, while Peronist senators voted unanimously against.
In Argentina, as across nations blessed and cursed by potential, the gap between what could be and what is defines the national psychology. The reform confronts a paradox that has plagued the country for decades: formal private employment has remained essentially flat since 2012, yet labor lawsuits surged 135% between 2010 and 2024. The government argues this explosion in litigation—rather than job creation—demonstrates fundamental dysfunction in the system.
The law's most significant provisions include allowing 12-hour work shifts with equal rest periods, creating an overtime bank where workers can exchange extra hours for days off, and dramatically reducing severance calculations by excluding vacation pay, tips, bonuses, and the traditional aguinaldo bonus payment. Indemnification payments will now be capped at three times average monthly salary, a measure the government claims will remove barriers to formal hiring while unions denounce as stripping workers of constitutional protections.
Minister Patricia Bullrich defended the reform as dismantling legal rigidities that "push millions into informality," arguing that excessive labor protections paradoxically prevent job creation by making hiring too risky for employers. The legislation reduces employer social contributions to incentivize worker registration and transfers national labor court jurisdiction to Buenos Aires, centralizing dispute resolution.
But Kirchnerist senators contended the law "violates Article 14 bis of the Constitution" guaranteeing labor rights. Senator José Mayans called it "a law by roughnecks for roughnecks" that would precarious work and deteriorate wages for both workers and retirees. The CGT labor confederation, cornerstone of Peronist political power since the 1940s, mobilized against the measure but failed to prevent its passage—a striking demonstration of diminished union influence.
The reform represents Milei's most direct assault on Peronism's institutional legacy, targeting the labor framework that has defined Argentine politics for generations. Whether libertarian reform can finally dismantle corporatist structures or proves another temporary change reversed by the next populist government remains the essential question. Argentina has witnessed countless economic reforms before, each promising to break the boom-bust cycle. The difference this time may be the depth of popular frustration with a system that generates lawsuits more reliably than jobs.
