The government of Javier Milei has advanced in the final drafting of a labor reform project that will be sent to the National Congress in the coming hours, with the stated objective of modernizing the current labor regime and adapting it to current production needs. One of the most controversial points is the elimination of the ultraactivity of collective contracts, which prevented their automatic extension after expiration. The reform also prioritizes company-level agreements. The government, for its part, maintains that the reform does not seek to suppress essential rights, but to provide the labor market with clear and predictable rules that reduce the judicialization of conflicts and stimulate productive investment. On the other hand, trade unions such as the General Confederation of Labor (CGT) and the Workers' Confederation (CTA) consider the reform regressive and a threat to consolidated labor rights. Critics fear that the new rules could lead to an increase in precarious employment and a reduction in worker rights won over decades. The business community, for its part, is concerned about the potential impact of the reduction of their sectoral contributions, especially in sectors where funds for training or infrastructure depend almost entirely on these mechanisms. The project also addresses judicial procedures in cases of dismissal, curtailing the possibility of additional claims for damages when the employment relationship is terminated before the agreed-upon date. Furthermore, the reform addresses the reorganization of vacations, guaranteeing the right to paid annual leave as established by the Labor Contract Law, but enabling employers and workers to agree to split this period into segments of no less than seven days. It also proposes the introduction of a 'time bank' system, whereby agreed-upon overtime hours can be compensated with rest periods instead of traditional overtime pay. One of the central points is the reform of the compensation system for dismissal. The initiative suggests replacing the existing model of a single compensation payment with a system of sectoral funds or unemployment insurance, financed by employer contributions. Trade unions and analysts warn of the profound impact the reform could have on collective labor relations in the country, promising to continue the fight to modify it.
