Argentine Court Halts Milei’s Labor Reforms

President Javier Milei’s proposed labor reforms on Wednesday, marking the first major legal obstacle Milei has faced since assuming office in December.

Days after his inauguration, Milei introduced the Decree of Necessity and Urgency (DNU), an order made up of a series of deregulation measures aimed at rebuilding the country by eliminating several regulations “that have held back and prevented economic growth.” 

The proposed labor reforms in the DNU include changes to labor lawsuits, an extension of trial periods in employment contracts from three to eight months, the right of workers to strike, and a reduction in pregnancy leave. Also: Pension contributions and severance payments will be reduced and limited; employers may extend working hours to a maximum of 12 hours per day; and fines will be issued for incorrectly registering workers. 

The changes technically went into effect last Friday, but Argentina’s largest trade union (with left-leaning Peronist ideals) contested the reforms. The union claims the reforms strip away fundamental worker protections and are largely unconstitutional. 

On Wednesday, the National Labor Chamber of Appeals of Argentina sided with the union and temporarily halted the implementation of the labor laws included in the reform package. Judge Alejandro Sudera, one of the three judges ruling against the reforms, said several of the measures seemed “repressive or punitive in nature” and weren’t urgent enough to bypass Congress. 

“The National Congress has the legislative function, the Executive Branch has the regulation and the Judicial Branch issues sentences, with the eminent attribution of exercising the control of constitutionality of legal norms. From this perspective, it cannot be argued, in any way, that the Executive Branch can freely substitute the activity of the Congress or that it is not subject to judicial control,” Sudera said in his ruling

The suspension will remain in effect until Congress reviews the measures and issues a final ruling.

Milei’s government announced plans to appeal the ruling and will request another court to hear the case, according to a statement issued by the administration. The court’s decision “contradicts all of the rulings issued so far” and “disregards the criterion adopted by the other courts” in the country regarding the DNU, according to the administration.  

Attorney General of the Treasury Rodolfo Barra suggested the case be handled by the Federal Administrative Court, where lawsuits against the state are generally processed. 

“We will take all this first to the administrative litigation courts, and if we are unsuccessful, to the [Supreme] Court. I believe that in a week this will be resolved,” Barra said in an interview with Radio Con Vos, adding that the labor court is biased against the DNU’s labor reforms.

Milei insists the reforms are necessary because “Argentina requires an urgent change of course to avoid disaster.” However, his government may face more pushback, as over 10 other injunctions against the DNU have been filed in Argentine courts.