Modifications to the Labor Risk Regime

On January 23, 2017, Decree No. 54/2017 (the “Decree”) was published, introducing regulation modifications to the Labor Risk Regime.

The dispositions of the mentioned Decree are subdivided under three headings: i) Medical Commissions; ii) Provincial public self-insurance; and iii) Dispositions to order the Labor Risk System.

1. Medical Commissions

• Enforceability: The Decree states that the action before the Jurisdictional Medical Commission constitutes the previous compulsory and excluding administrative instance for the worker to request the professional determination of his or her illness  or contingency, determination of his or her disability and the due monetary compensation as foreseen by the Labor Contract Law.
• Revision: Once the instance before the Jurisdictional Medical Commission is finished, the decision can be revised before the Central Medical Commission, to whom the worker can interpose a judicial remedy. If any of these were to be definitive, along with the resolutions granting clearance, these shall be considered administrative res judicata.
• Official medical expert. Fee: Official medical experts who intervene in judicial controversies must be part of the forensic medical team of the intervening jurisdiction. Their fees will be neither variable nor e linked to the sum in question in the trial, and they are regulated according to  the work performed. Regarding  legal fees, the Decree states that those in the sphere of the Medical Commissions will not be subject to pacts of cuota litis.
• Creation of the Clearance Service in the scope of the Jurisdictional Medical Commissions: As set forth by the Decree and its Annex, the Clearance Service in the scope of the Jurisdictional Medical Commissions is created, which will be in charge of funding and clearing those agreements exclusively referring to permanent definitive labor disabilities and death, as foreseen by Law No. 24.557 and its modifying laws, though the procedures and the intervention of the officials that the Superintendence of Labor Risks determine to this effect.

Annexed to the Decree, the procedure before the clearance service before the Jurisdictional Medical Commissions is contemplated.

1. Provincial public self-insurance

The Decree disposes the creation of the Provincial Public Self-Insurance, so that the provinces and their municipalities, and the City of Buenos Aires can self-insure  labor risks as defined by Law No. 24.557 and its modifications.

In this context, the Decree orders the incorporation as members of the Permanent Consultation Committee created by Section 40 of Law No. 24.557 of two representatives of the jurisdictions that opt for the Provincial Public Self-Insurance regime.

1. Dispositions to order the Labor Risk System

The Decree modifies some of Law No. 24.557 and its modifying law, Law No. 26.773’s regulations.

• Temporary Labor Disability Term: Regarding the Temporary Labor Disability, the Decree expands to two years the time that has to pass since the first disability manifestation in order for said disability situation to cease. Furthermore, it establishes that if the employee was reincorporated within these two years and later left because of  an identical accident or professional illness, his disability situation will continue until he is declared fit by a physician, the declaration of permanent labor disability, his death, or until he completes two years without working, adding up every period in which he would be impeded to work.

• Base Income: Regarding the determination of the base income for the calculation of indemnities for definitive labor disability or death, the Decree establishes that a monthly average of all wages accrued by the employee during the previous year to the first disability manifestation must be calculated, and disposes that said wages will be updated by the RIPTE index (Stable Employees’ Average Imposable Remuneration, RIPTE after its Spanish acronym). Furthermore, as of the date of the first disability manifestation, and up to the moment of payment settlement, the previously determined base income’s amount will accrue an interest equivalent to the average of the bank Banco Nacion’s nominal annual active rate General Portfolio expired to 30 days, up to its payment.

This disposition will be applied to contingencies whose first disability manifestation happens after the Decree’s enforcement.

• Termination of the Affiliation Contract: This contract is incorporated under the regulation regarding the affiliation to the Labor Risk regime, the possibility of the Labor Risk Insurer to terminate the affiliation contract if lack of payment of two consecutive or alternate monthly fees is verified, or the accumulation of debt equivalent to two monthly fees. Furthermore, it disposes that after termination, the employer will be regarded as not insured, and the insurer is required to provide services within 3 months following termination for lack of payment, and may not  charge the employer with the cost of said provided services.

• Judicial Competence: The regulation modifies competence of judicial courts to revise the dispositions of the Medical Commission, stating that ordinary labor justice will be competent to solve remedies presented by the parties against the Medical Commission’s dispositions.
• Conditions for the Judicial Track: The possibility of taking legal judicial action funded in other responsibility systems is conditioned to the extinction of the administrative track is before the Jurisdictional Medical Commission, or the expiration of the term established for the emission of the resolution.

• Adjustment of Certain Provisions: The increase according the variation of the RIPTE index is determined as of January 1, 2010, until the date of the first disability manifestation, taking into account the RIPTE’s last semester’s variation, only to the additional sole payment compensations incorporated by Section 11 of Law No. 24.557 and its modifications, and the minimum rates established by Decree No. 1694/09.

• Derogation of Certain Provision Adjustments: According to the new regime, the half-yearly RIPTE adjustment of amounts for permanent labor disability is derogated, as is the RIPTE adjustment of cash provisions for permanent disability.