The endless loop: labor reform and judges

The traditional wordplay game known as “El cuento de la buena pipa” was a conversational loop designed to entertain and annoy through infinite repetition. For those unfamiliar with its structure, to avoid falling into that same loop here, it can be said that behind the story lies the goal of exhausting the other party with the same themes and questions endlessly.

Since the mid-1990s, there has been ongoing discussion about the need for labor reform in Argentina. Due to union short-sightedness, the formal labor market was diminished, informal employment increased, and an industry emerged that is not precisely within the UIA: litigation, to the benefit of certain lawyers and judges who share in its gains.

Last Thursday, Marval O’Farrel Mairal held its Human Resources conference. There, Diego Kelly, Rodrigo Solá Torino and Guillermo Osorio highlighted the benefits of labor reform and the need to move beyond political divisions. This took place days after Judge Raúl Ojeda issued an injunction at the request of the CGT, affecting around 80 of the approximately 200 articles of the law. Ojeda’s speed was striking. The government is now planning a filing before the Council of the Judiciary and even a criminal complaint against him.

In the meantime, cases such as that of Manaos continue to arise, where a former employee is to be paid ARS 800 million following a ruling by the Supreme Court of Mendoza. Payment must be made within one week. There are also unusual cases, such as that of a judge who considered that providing a mobile phone to an employee constituted off-the-books compensation, which therefore had to be included—along with social security contributions and applicable penalties—upon termination of the employment relationship. Hiring a formally registered employee becomes a high-risk decision for SMEs, particularly at a time when AI threatens to take over repetitive tasks.

The significant changes proposed by the labor reform remain largely in a judicial limbo, with uncertain timing and outcomes. Everything repeats itself. And the loop of the “cuento de la buena pipa” prevails.