Here is a short brief of the key changes from a labour law perspective and their implications for businesses:

• Simplified Employment Registration

One of the most impactful aspects of the new law is introducing a simplified electronic system for registering employment contracts. This system aims to be quick and efficient, reducing administrative burdens for employers. For small businesses with up to 12 employees, the law mandates a simplified registration system for payroll receipts, allowing a single payment to cover all legal and social security obligations. Additionally, in cases of labour intermediation, the registration by any party in the chain is deemed sufficient and legal for assessing compliance.

• Elimination of Penalties

The law repeals significant fines for non-compliance with labour registration requirements previously outlined in laws 24.013 and 25.323. This move is expected to reduce litigation, removing a substantial financial incentive for initiating lawsuits against companies.

• Extended Probation Period

The probation period for new employees is extended to six months, with a potential extension to eight months for businesses with 6 to 100 employees and up to one year for companies with up to five employees through collective bargaining agreements. During this probationary period, either party can terminate the employment relationship without cause and the right to severance pay. This extension gives employers more flexibility to assess the suitability of new hires over a longer period.

• Revised Provisions for Contractors and Intermediaries

The law introduces significant changes to the provisions regarding contractors and intermediaries. It clarifies that the Labour Contract Law (LCT) does not apply to service contracts, agency work, and other engagements regulated under the Civil and Commercial Code. Furthermore, it specifies that there is no presumption of an employment relationship for professional services contracts where proper receipts and banking transactions are made. This change aims to differentiate between independent contractors and employees, reducing the risk of misclassification claims.

• Solidarity and Mediation Adjustments

The reform modifies Article 29 of the LCT, stipulating that workers will be considered direct employees of the entity that registers the labour relationship, irrespective of being contracted to provide services to third parties. The user company will be jointly liable for labour and social security obligations accrued during the service provision period.

• New Maternity and Family Leave Provisions

Maternity leave is extended from 12 to 14 weeks, with provisions for paternity, family responsibility, and bonding leave for adopted children. These changes reflect a more modern approach to work-life balance and family responsibilities.

• Discriminatory Dismissal

The law introduces a new provision allowing judges to increase severance pay by 50% to 100% in cases where a worker proves that their dismissal was based on discriminatory grounds such as race, religion, gender, or political affiliation.

The Unión Industrial Argentina (UIA) supported the Basis Law: “We support the Basis Law and we believe the dialogue process (in Congress) has been extremely constructive” said its President, Daniel Funes de Rioja, who also called for “safeguarding production from unfair competition”. UIA has indeed stressed - and continues to do so now as the various implementing decrees are enacted -, that the Large Investment Incentive Regime (Rigi) included in the law, that offers tax, customs and foreign exchange incentives for 30 years to attract large investments, represents ‘unfair competition’ against the investments of local small and medium-sized enterprises, which would not have access to the significant tax breaks proposed by the government's draft.