Non-remunerative One-off Lump Sum Payment and Prior Mandatory Procedure to Dismiss Employees without Cause

By means of Decree 1043/2018 (the “Decree”), in force since its publication in the Official Gazette, the Argentine Executive established (i) a non-remunerative one-off lump sum (LS) for all employees in an employment relationship in the private sector, and (ii) prior mandatory procedure to dismiss employees without cause.

 

1. Non-remunerative one-off lump sum (LS)

 

The LS established by the Decree will amount to five thousand pesos (ARS 5,000), and must be paid in the following way:

a) 50% with the salaries of the month of November 2018, payable in the month of December 2018 and;

b) the remaining 50% with the salaries of the month of January 2019, payable in the month of February 2019.

For those activities or sectors in “special crisis” or “productive declination”, the Decree authorizes the signatory parties of the collective bargaining agreements to collectively agree different amounts or terms for the payment of the LS.
 

In addition, the Decree establishes that the signatory parties of the collective bargaining agreements that have collectively agreed to an increase in the employees’ income, as a salary revision of the guideline agreed upon in the collective bargaining of 2018, may compensate that increase with the total sum of the LS provided for in the Decree and up to its concurrence, unless they expressly agree not to do so.

 

On the other hand, the signatory parties of the collective bargaining agreements that have not collectively agreed to an increase as a salary revision yet, may establish that the LS is computed up to five thousand pesos, on account of the amounts that are agreed as salary revision of the relevant guideline for collective bargaining in 2018.

 

In the case of employers who have unilaterally granted other increases over the employees’ income as of January 1, 2018 may compensate them up to their concurrence with the sum of the LS provided by the Decree.

 

If the incorporation, compensation or absorption of the LS provided for by the Decree is implemented, it will be remunerative.

 

Finally, employees from the national, provincial and municipal public sector, workers from the Agrarian Labor Regime, and personnel included in the Special Scheme of Employment Contract for Personnel of Private Houses are excluded from the scope of the Decree.

 

2. Prior mandatory procedure to dismiss employees without cause

 

Furthermore, the Decree establishes that employers must inform the Ministry of Production and Labor of any dismissal without cause of employees hired for an indefinite period of time. The information must be sent at least ten (10) days before the date of notification of the dismissal without cause.

 

During such term, ex officio or upon request of the parties, the Ministry of Production and Labor may appoint hearings to analyze the conditions of the future termination of employment, and summon the employer and the employee, with the representation of the relevant union, to the hearings. This preliminary proceeding is mandatory until March 31, 2019.

 

Upon failure to comply with the obligation to inform of dismissal without cause, the Ministry of Production and Labor may impose a fine on the employer according to the General Sanction Regime for Labor Infringements Law No. 25,212. Such fine may range between 30% and 200% of the minimum wage for each affected employee.