Argentina’s Senate last night approved a bill to declare a ‘Labour Emergency’ and prohibit further layoffs for a six-month period.
The bill, presented by the opposition Frente para la Victoria (FpV) as a response to a wave of job cuts in the first months of 2016, received the backing of 48 Senators. There were 16 votes against the bill – including senators from the ruling Cambiemos alliance – and eight absentees.
The bill will now pass for debate in the Lower House of Congress, where three other labour-related proposals are also under discussion. If it is approved there, it will be referred to President Mauricio Macri, who has spoken out against the bill, to sign it into law or veto it.
The proposal calls for establishing a period of 180 days during which time layoffs without just cause would be prohibited in both the public and private sectors. Workers that are laid off in that period can either file a lawsuit or accept the decision and receive double the standard compensation. The law would come into effect immediately once published in the Official Gazette, but would not apply to any employment contracts signed after that date.
“With this bill we are reaffirming the National Constitution, which exists to be followed and to guarantee the rights of all workers,” stated Daniel Lovera, one of the sponsors of the bill. “We want to preserve jobs for a limited time, hoping that the socio-economic conditions of the country will change.”
Federico Pinedo, provisional Senate leader, led the rejection of the bill for President Mauricio Macri’s Pro party: “It is very easy to raise a hand to look good, but it is difficult to create sources of work, and that is our responsibility.”
Pro Senator Laura Rodríguez Machado added: “We are for the promotion [of jobs] rather than prohibition.”
The bill will now be sent to the Lower House, where its future is still uncertain, as opposition parties have presented alternative proposals.
FpV legislators have drafted a similar bill, but one that would make the ‘Labour Emergency’ period retroactive to 1st March and run until 31st December. Meanwhile, the Frente Renovador (FR) led by Sergio Massa, has developed an alternative proposal with a special focus on Small- and Medium-sized Enterprises (SMEs). The initiative would prevent layoffs at large companies but exclude restrictions for SMEs, which would also receive incentives to retain their workers as well as additional benefits for hiring young (18-24) or older (45+) workers.
Massa’s bill moves closer to the government’s new employment proposal, announced by President Macri earlier this week. The ‘First Job Plan’ establishes tax exemptions and benefits for companies that hire 18-24-year-olds with fewer than three years formal work experience. These incentives will apply to recruits of any age in the ten northern provinces part of the government’s Plan Belgrano development scheme (Misiones, Corrientes, Chaco, Santiago del Estero, Formosa, Salta, Jujuy, Tucumán, Catamarca and La Rioja). The benefits will be greatest for SMEs with up to 200 employees and will only apply to companies that increase their workforce with new hires, not those who replace existing staff with younger recruits.
The future of these diverse proposals is unclear. The debates in the lower house of Congress, where no single party or alliance has a clear majority, will be critical. Massa’s FR is again set to play a crucial role: the opposition leader has shown much more willingness to compromise with the government and he again seeks a middle-ground with his proposed bill. However, if the government refuses to compromise on its own ‘First Job Plan’, Massa has threatened to support the FpV bills. Even if the government obtains Massa’s personal support, the FR, which includes several legislators with close links to unions (including Facundo Moyano, son of powerful union leader Hugo Moyano) is divided on the issue and may not follow suit.
Meanwhile, if one of the opposition-led bills is sanctioned by both houses of Congress, President Macri will be faced with a difficult political decision over whether to veto it or nor. Macri has been highly critical of any legislation to prohibit job dismissals, saying it would be counterproductive and end up restricting new job opportunities. At the same time, a veto would put the government at odds with the country’s major trade union bodies, risking more industrial action and potentially damaging strikes. The central unions have already approved a march on 29th April, with Moyano warning that a national strike could be called for May if the government does not act to protect workers.
The glut of legislative measures comes amid a wave of job cuts that labour unions and opposition parties are calling an employment crisis. However, without official statistics from INDEC, still undergoing a transformation since declaring a ‘statistical emergency’ last December, there is a debate over the actual number of layoffs in recent months.
The private consultancy Tendencias Económicas, widely cited in the media, calculates 127,000 layoffs since the start of President Macri’s term. This fits with the “more than 120,000” cuts estimated by the Argentina Confederation of Medium-Sized Enterprises (CAME). The Argentina Centre for Economy Policy (CEPA) – a think tank with ties to Kirchnerism – counted 141,542 dismissals in the four months of Macri’s government. Public sector union ATE also claims around 140,000.
The government, meanwhile, has repeatedly denied the existence of the jobs crisis. Citing data extracted from the Social Security system (SIPA), Labour Minister Jorge Triaca acknowledged around 27,000 job cuts through to February in the private sector, while Modernisation Minister Andrés Ibarra said that 10,931 public sector contracts had been rescinded. The Labour Ministry’s monthly Survey of Labour Indicators (EIL) said the net fall in employment was just 0.1% between November and February.
Leading government figures have spoken out recently to refute reports of a jobs crisis. Cabinet Chief Marcos Peña denied that there was a “destruction of jobs”, saying that the situation was the same as in recent years. Finance Minister Alfonso Prat-Gay said “we shouldn’t believe this ‘sensation’ that there are significant job losses.” Both have stated that new public works projects will create thousands of new jobs, starting from the second half of 2016.