Buenos Aires – Argentina’s Senate on Friday night definitively approved a sweeping labor reform package championed by President Javier Milei, a move met with immediate condemnation from labor unions and promises of legal challenges. The legislation, passed after weeks of parliamentary debate and often-violent protests, significantly alters Argentina’s labor laws, easing restrictions on firings, reducing severance pay, and allowing for longer working days.
The bill, dubbed the “modernization of labor” law by proponents and a “precarization” measure by opponents, permits employers to extend the workday to 12 hours, limits the right to strike by broadening the definition of essential services, and allows for the fragmentation of vacation time. President Milei celebrated the passage on X, stating, “We have modernized labor law.”
Senator Patricia Bullrich, a member of Milei’s La Libertad Avanza party, argued the reforms are necessary to stimulate investment and job creation. “There is no employment without investment, without businesses,” she stated during the Senate session. Bullrich asserted the new regulations would provide “predictability” and “clear rules” to encourage entrepreneurship.
However, labor leaders have vowed to fight the reforms in the courts. Jorge Sola, co-secretary general of the CGT, Argentina’s largest labor federation, announced plans to file a legal challenge on Monday, arguing the law is unconstitutional. The CGT also plans a new protest demonstration on Monday.
The passage of the law follows a general strike on February 19th that failed to sway lawmakers. Vanessa Paszkiewicz, a 45-year-aged teacher protesting outside the parliament, expressed concerns about the impact of the reforms, stating, “They will dispose of our time with these fragmented vacations, this ‘time bank’ [instead of highly-paid overtime], it’s a disaster!”
While the Milei administration secured parliamentary support through some concessions, such as adjustments to employer contributions for healthcare and sick depart benefits, the business community remains cautious. Martin Rappallini, president of the Industrial Union of Argentina (UIA), welcomed the law as a step towards reducing the “judicialization of labor relations,” a long-standing issue he believes discourages investment. However, he cautioned that job creation depends on multiple factors, not solely legislative changes.
Recent data from the Institute of Statistics suggests the reforms may not immediately translate into job growth. A report indicates that 80% of companies in the industrial sector have no plans to hire in the next three months, with 15% anticipating a reduction in staff. The primary concern cited by businesses is insufficient domestic demand, a consequence of the austerity measures implemented by Milei to curb inflation, which has fallen from 150% to 32% annually in two years.
Despite a reported economic rebound in 2025, with a 4.4% growth forecast following a 1.8% contraction in 2024, the recovery is uneven. The agricultural sector, mining, and financial services have driven growth, while industry (-3.9%) and commerce (-1.3%) continue to struggle. Approximately 300,000 jobs have been lost across the public and private sectors during Milei’s first two years in office.
Public opinion on the labor reforms remains divided, with a recent poll showing 48.6% approval and 45.2% opposition.
