The Supreme Court Admitted the Application of the Anti-discrimination Law to Private Labor Relationships

1. Background

After being dismissed, a group of six workers sued their former employer, Cencosud S.A., claiming that their dismissal was discriminatory because it was grounded on their union activity.

The plaintiffs had created, along with other workers the Commerce Executive Employees Trade Union, and were part of the directory of that institution. They argued that the president of the mentioned Trade Union had claimed for outstanding payments and as a consequence Cencosud managers had asked them for a list of the members of the directory of the Union. In that context, plaintiffs considered that the dismissal of all the members of the directory that took place a few days later was discriminatory and based on their union activity.

Tribunal II of the Court of Appeals on Labor Matters confirmed the first instance ruling and ordered Cencosud to reincorporate the plaintiffs into their jobs and to pay them an economic compensation. Cencosud appealed the decision at the Supreme Court.

2. Supreme Court’s ruling

The Supreme Court formally admitted the appeal and stated that the object of its decision was the problem of the applicability of Anti-discrimination Law No. 23,592 to private labor relationships. That is to say, if anti-discrimination law is applicable to private labor relationships, specifically to discriminatory dismissals; if employers can be forced to reincorporate employees on that grounds; and if that is compatible with the right to trade and to run an industry protected by section 14 of the Constitution.

3. Consensus and discrepancy

Although the ruling was unanimous on admitting the application of anti discrimination law to private labor relationships, judges of the Supreme Court did not agree on the consequences of the application of the law, specifically on the possibility of compelling the employer to reincorporate the employee.

Judges Carlos S. Fayt, Enrique Santiago Petracchi, Juan Carlos Maqueda and E. Raúl Zaffaroni, considered that because of the application of the Anti-discrimination Law, the employee is able to claim to be reincorporated, and judges Ricardo Luis Lorenzetti, Elena I. Highton de Nolasco and Carmen M. Argibay argued that reincorporation is not possible. Judges Lorenzetti, Highton de Nolasco and Argibay considered that labor laws do not provide such legal remedy for discrimination cases (only exceptionally and for a limited term) and therefore, the employee may only claim a financial compensation (equal to what labor laws determines for discriminatory dismissals such as pregnancy or marriage dismissals).

4. Dismissal, discrimination and proof

On December 7, 2010, the Supreme Court also ruled on the “Pellejero, María Mabel c/ Banco Hipotecario S.A. s/ amparo” case and stated that Anti-discrimination Law No. 23,592 is not applicable when the discriminatory act has not been proved. Plaintiff’s claim for reincorporation was denied because the employee could not actually prove that her dismissal was grounded on her union activity.

5. Private labor relationships: dismissal protection

The Argentine Constitution provides a different kind of dismissal protection for public and private labor relationships. Among public labor relationships, dismissals can only be grounded on previously determined legal causes and the employer has to initiate an administrative procedure; among private labor relationships, the employer is able to dismiss the employee without stating the cause of the dismissal by paying a financial compensation (severance for seniority).

In that context, the application of a legal remedy provided by a transversal law (Anti-discrimination Law) generally applied to civil matters that allows the employee to claim for the reinstallation, distorts the labor legal system designed by the legislator. That distortion brings legal ambiguity and discourages investments.