Labor Reform: Changes to Work Conditions

The recent Labor Modernization Law, published in the Official Gazette on March 6, 2026, introduced several amendments to the Argentine Labor Law 20744 (LCT). Among these, it substantially modifies article 66, which governs the employer’s authority to introduce changes to work conditions, traditionally referred to as ius variandi.

This authority is a manifestation of the employer’s managerial power, and it allows employers to unilaterally modify certain aspects of the employment relationship to adapt to the company’s organizational needs. However, historically, the exercise of this power has been subject to a series of legal limitations aimed at preventing arbitrary or abusive changes.

The recently enacted reform modifies these parameters and redefines the scope of situations in which the exercise of ius variandi may be considered abusive. It introduces significant changes both to the requirements for the validity of such modifications and to the remedies available to employees.

 

The previous regime under article 66 of the LCT

Before the reform, article 66 of the LCT provided that employers could introduce changes to the form and modalities of the work performed, provided that such changes did not constitute an unreasonable exercise of this authority, did not alter essential terms of the employment contract, and did not cause material or moral harm to the employee.

Labor courts consistently interpreted these requirements as cumulative conditions for a valid exercise of ius variandi. Courts especially understood that the modification had to respond to a functional or organizational need of the company, while also avoiding any economic or non-economic harm to the employee.

The previous regime also established a specific procedural mechanism to allow employees to challenge unilateral modifications. When an employee considered that the measure constituted an abusive exercise of ius variandi, they could initiate a summary proceeding seeking reinstatement of the prior working conditions, without terminating the employment relationship.

 

Amendments introduced by the Labor Modernization Law

The reform of article 66 introduces a significantly more concise wording and redefines the limits of this managerial prerogative. The new provision establishes that employers may introduce changes to the form and modalities of the work performed, provided that such modifications do not alter essential terms of the contract and do not cause material harm to the employee.

In doing so, the reform eliminates two elements that had traditionally been considered key limitations on ius variandi:

1. the requirement that the measure not constitute an unreasonable exercise of the employer’s authority,
2. the reference to moral or non-economic harm.

As a result, the analysis of the validity of contractual modifications is now primarily focused on two criteria: the change must not affect essential elements of the employment contract and must not generate economic or material harm to the employee.

 

Elimination of the summary action for reinstatement of conditions

Another significant change introduced by the reform is the elimination of the procedural mechanism that allowed employees to seek judicial reinstatement of prior working conditions through summary proceedings. Under the current regime, where the employer adopts measures exceeding the limits established by article 66, the employee must first formally request that the employer revoke the modification. If such request is not addressed, the employee may consider themselves constructively dismissed without cause.

Accordingly, the new framework removes the possibility of challenging the modification while maintaining the employment relationship and effectively limits the employee’s options to either accepting the change or terminating the relationship through constructive dismissal.

 

Practical scope of the reform

The amendments introduced to article 66 appear aimed at increasing predictability in the exercise of ius variandi and reducing litigation associated with these types of disputes. In particular, removing broadly interpreted concepts—such as the reasonableness of the measure or moral harm—tends to narrow the circumstances in which a modification may be deemed abusive. Additionally, the elimination of the summary reinstatement action reduces the procedural avenues available to challenge employer decisions.

From a practical standpoint, the new regime may facilitate the implementation of organizational changes within companies, provided that such changes do not affect essential contractual terms or generate economic harm to employees.

 

Final considerations

The reform of article 66 of the LCT redefines the limits of the employer’s authority to unilaterally modify working conditions and simplifies the regulatory framework governing such changes. While the employer’s power to introduce modifications to the form and modalities of work remains in place, the new legal framework provides a more concrete definition of when such authority may be considered abusive.

In this sense, the reform reduces the scope of judicial review over these types of business decisions and reshapes the alternatives available to employees when faced with contractual modifications. Ultimately, it consolidates a regime that prioritizes the continuity of the employer’s organizational authority within the essential limits of the employment contract.