The Government did not extend the ban on dismissals and established a gradual reduction of double compensation

December 24, 2021

How will compensation be from 2022 (REUTERS / Marcos Brindicci)

After several versions of what would be done with this measure starting next year, the Government finally decided to implement a gradual reduction of the double compensation for unjustified dismissals. The decision was confirmed by the Decree 886/21 that was published in the Official bulletin.

According to the document, the new rule states that, in the case of dismissal without cause, the affected worker “will have the right to receive, in addition to the corresponding compensation in accordance with the applicable legislation, an increase equivalent to 75% of the amount thereof, from January 1 to February 28, 2022”.

While, That figure will be 50 percent from March to April 30, and 25% from May 1 to June 30, 2022.

The regulations clarify that the indicated percentages “will be calculated on all compensation items originated as a result of the uncaused termination of the employment contract”, but that the corresponding amount “may not exceed, in any case, the sum of 500,000 pesos.”

In addition, it was noted that the benefit “will not be applicable to contracts held after the entry into force” of this law, which was implemented for the first time in mid-December 2019, shortly after the change of Government.

Along with the ban on layoffs, double severance pay was one of the two measures put in place by the Casa Rosada in the context of the health crisis, which were successively extended by decree throughout 2020 and, more recently, until the end of this year. anus.

The Government sought with this measure to reduce layoffs during the pandemic
The Government sought with this measure to reduce layoffs during the pandemic

Those two policies are part of one of the most pronounced complaints from business chambers in recent months. The president of the Argentine Industrial Union (UIA), Daniel Funes de Rioja, baptized it as the “triple stocks” of work, in what he identifies as one of the reasons why the private sector cannot create formal jobs.

On the contrary, sources from the Ministry of Labor, which leads Claudio Moroni, They denied that the rigor of this legislation can affect the rate of job creation. “It is difficult for us to think of empirical evidence that shows that relaxing labor standards has a positive impact, not even the IMF thinks that now,” they considered in the employment portfolio.

However, last August the labor authorities recognized that private employment was still 1.5 points below the level it had in February 2020, the last month before the pandemic, and compared it with the situation in other countries to assert that Argentina had until then a less pressing situation. Brazil, they estimated, was still 11 points behind of the prepandemic; Chile, about 6 percentage points, and the United States, about 5 points.

Months ago the Government was already analyzing the possibility of moving to an “intermediate scheme” in 2022, in which double compensation and the prohibition of dismissals were not going to disappear completely, but they were going to be made more flexible, with the aim that both measures would eventually be eliminated.

It remains to know what will happen with the ban on dismissals
It remains to know what will happen with the ban on dismissals

Taking into account that it has already been announced how the first of these policies will continue, now it remains to be known what the national authorities will do with regard to the prohibition of dismissals, an initiative that led to resignations being maintained as the main cause of job separation during the 2021.

In the recitals of the Decree, the Executive Power indicated that “although there is currently a marked process of recovery in registered salaried employment in the private sector,” the figure is still “5% below the level observed in December of year 2015 ″, so “it is necessary to maintain the objective of increasing the level of protection of formal workers through an increase in compensation for unwarranted dismissals”.

“The effects of the pandemic on the population and the still uncertain panorama about its evolution, attentive to the experiences observed in other countries and the growth in the number of infections in our country, they impose the need to follow a criterion of prudence and gradualism to annul the established measure “, was explained.


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