Hire in Argentina

The CLA establishes the following terms for a fixed-term employment contract:

• a written employment contract must be executed
• should include the term of its duration
• has as a maximum term of five years
• should demonstrate the extraordinary need, duly justifying the execution of a fixed term contract

If the employment relationship does not have a ground that justifies a fixed-term contract, it will become an indefinite-term employment contract.

The employer must serve prior notice of termination of no less than one month and no more than two months.. Failure to serve such notice cannot be replaced by any compensation amount, and will automatically transform the contract into an indefinite term contract.

An employee is entitled to claim damage if the employer dismisses them without justified cause before the expiration of the agreed term. Typically, this amounts to the pending wages through the original expiration of the agreed term.

Trial periods of up to three months are allowed for indefinite term contracts. Termination during the trial period can be exercised without paying any compensation or severance payment liability for the employee. The only obligation is to offer notice of termination 15 days in advance.

A fixed term contract has no trial period.

The normal working hours are limited to eight each day or 48 in a week. Night shift and hazardous (or unhealthy) workplaces provide reduced working hours, typically seven hours per day for night shifts and six hours per day for a hazardous or unhealthy environment.

Overtime is any work rendered in excess of the standard working hours. Employees who work overtime receive an additional payment of 50% of their salary on weekdays. They are entitled to receive double their salary on Saturday afternoons, Sundays and holidays. Applicable CBAs may provide higher payments. Overtime must not exceed three hours in a day, 30 hours a month and 200 hours a year. All employees, except registered corporate directors or corporate managers, are entitled to overtime payment.

Pre-employment health checks are mandatory to determine whether an applicant has the ability to do the activities associated with their jobs.

Employers are required to provide mandatory life insurance and working accident insurance to employees. Employers are also obliged to provide a healthy and safe workplace, both physical and psychological, in compliance with the working insurance instructions.

Employees are entitled to receive a 13th-month salary or statutory annual bonus (‘sueldo annual complementario’ – SAC or ‘Aguinaldo’). This bonus is payable in two semi-annual installments, due in June and December. Each installment should equate to 50% of the highest monthly salary accrued during the corresponding semester.

Employers can terminate an employee at any time without justified cause, but they are then subject to payment of severance compensation provided by labor laws. Termination of employment with justified cause does not entail payment of severance compensation.

The employer can dismiss an employee with justified cause in the event of failure of the employee to fulfill his obligations to the employer. Labor laws do not list specific breaches that justify such dismissal. Hence, each case must be examined on an individual basis. The burden of proof falls onto the employer. Moreover, the employee can challenge any such termination.. In these cases, a Labor Court will make a judgment on whether or not the employer had a justified cause for the dismissal.

No severance compensation is required if an employee resigns.

The employee can consider themself dismissed on constructive basis should there be a breach of terms by the employer, which does not allow for the continuation of the relationship. Again, in such cases, a Labor Court will decide if the employee had a justified cause for constructive dismissal.

Employers must give prior written notice to the employee in the event of a termination of employment with no justified cause. Such prior notice must be provided by the employer according to the following terms:

• 15 days in advance, if the contract is under the probationary period;
• One month in advance, if the employee has served for up to five years;
• Two months in advance, if the employee has served for more than five years.

The employer may, in each case, choose to dispense with the notice period by making payment in lieu of notice.

Employees must provide prior notice of 15 days to the employer in the event of their resignation.

In case of the employer terminating employment without justified cause, the employer must pay the employee mandatory severance compensation as follows:

Seniority compensation: Employees terminated without justified cause are entitled to one month salary for each year of employment (or part year exceeding three months). This is calculated based on the employees’ highest paid month (of regular salary) during the last working year. This compensation is subject to a cap, depending on the applicable CBA, but it cannot be lower than 67% of the employee’s monthly salary.

Compensation in lieu of notice: The employer must give a prior written notice as outlined in the preceding section. If the employer does not give such prior notice, it must pay severance compensation in lieu of notice, equal to 15 days salary or one or two monthly salaries depending on each case. It is customary for employers to pay this compensation instead of giving prior notice.

Pending days through the end of the month: In the month of dismissal, the employee is entitled to receive the full salary regardless of the fact that he or she rendered services for a shorter period. If the dismissal does not take place on the last day of the month, the employer must pay compensation equal to the proportional salary for the pending days to complete the entire month in which the dismissal took place.

Compensation for unused vacations: The employee is entitled to compensation equal to the vacation pay in proportion to the days effectively worked during the year in which the dismissal took place.

Statutory Annual Bonus: The employee is entitled to be paid the proportional amount of the 13th month salary.

An employee terminated with just cause is not entitled to mandatory severance. However, if the employee challenges the dismissal and a court considers that the cause for the dismissal is not sufficiently significant to be deemed a breach of the main obligations of the employment contract, the court may award the employee mandatory or even increased severance. As employment relationship legislation in Argentina has become more contentious and challenging to employers, it is often considered most prudent to execute a conciliatory agreement.

Redundancies

The law provides employers may dismiss employees invoking objective reasons, including lack of work beyond the employer’s responsibility, force majeure etc. In such cases, the employer is obliged to pay half the compensation based on seniority instead of paying the full compensation based on seniority.

In Argentina, trade unions and employers’ associations represent all types of activities. Employees enjoy the right to organize into unions. Employees are free to decide whether or not to affiliate with a union. The government only grants official recognition to the most representative union. As a result, that is the only union that can represent the employees in CBAs.

Post-employment non-compete agreements are neither specifically prohibited nor expressly regulated under Argentine law. However, the enforceability of such agreements is questionable considering the constitutional (§14 of the Constitution) right to work. Based on case law, to be enforceable, a post-employment non-compete agreement must be justified by the important position of the employee (e.g., chief financial officer, chief executive officer), be limited to specific activities and territory, have a time limit (maximum of two years) and be compensated (with at least 50% of the prior monthly salary).

Employers are required to pay their employees through automated payroll deposits to their bank (rather than cash) and payment should be made by the fourth day of the following month.

Employers are required to make payments to employees from an in-country bank account.

Salary payments must be accompanied by a receipt and signed by the employee. Details on the receipt must include place and date of issue, employees full name and address, CUIT (a unique tax code), specific types of remuneration received, all deductions and proof of receipt. The employer should provide a copy to the employee.

Employees who have completed at least six months with the same employer are entitled to paid annual leave as follows:

• up to five years of service: 14 calendar days
• between five and 10 years of service: 21 calendar days
• between 10 and 20 years of service: 28 calendar days
• over 20 years of service: 35 calendar days.

The vacation must be taken between October 1 and April 30 of the following year unless subject to other agreement. The employer and employee may agree that the leave is taken in shorter blocks at any time of year. The parties may agree to a greater allowance than the one provided by law.

Carry over rules

By agreement, an employee may carry over up to one third of the annual leave entitlement from one calendar year to the next. Any unused leave in excess of this amount is forfeited upon the completion of the year.

In the case of illness or accident unrelated to work employees with less than five years of continuous service are entitled to three months of paid sick leave. Employees with over five years of service receive six months of paid sick leave. Leave allowances are doubled for those with dependents.

In the case of any accident or illnesses caused by work-related problems, the employee is entitled to 12 months of compulsory rehabilitation and sick pay under the compulsory employment risk insurance. The company must pay the employee’s salary for the first 15 days. After this time, the insurance company will assume responsibility for sick leave payments.

Once a paid sick leave period expires, the position must be kept open for 12 months. If the employee is still unable to work, severance pay should be provided to the employee.

Employees can take paid leave accordingly:

• Marriage: 10 days;
• Birth of Child: two days

Public Duty Leave: An employee who is called to give testimony before the court is entitled to paid leave. Those who are elected to sit on a representative body are entitled to unpaid leave. This period of leave is regarded as working time for seniority purposes.

Examination for university or secondary school: two days at a time (with a cap of 10 total).

CBAs may grant additional days of leave and all leave of absence may be extended at the discretion of the employer.

Three days of bereavement leave are given for the death of a spouse, child or parent; one day is granted for the death of a sibling.

Maternity Leave: Women are entitled to an unpaid maternity leave period accounting for a total of 90 calendar days. This is usually taken as 45 days before the delivery and 45 days after the delivery date. However, the employee can also take this leave 30 days before delivery and 60 days after delivery.

During the period of unpaid maternity leave, the social security department pays female employees a maternity allowance equivalent to 100% of the usual salary.

Female employees can request to take further unpaid leave of between three and six months.

Paternity leave: Male employees are not entitled to paternity leave, other than the two days for birth of a child as per other paid leave above. However, although employers are under no legal obligation, it has recently become more common for companies to grant paternity leave to male employees.

Adoption Leave: There is no statutory requirement for adoption leave, although recently some legal cases have resulted in employees being entitled to maternity and paternity leave when they adopt.

Parental Rights: Mothers may resign from their employment in order to care for a sick child. Under these circumstances the mother has the right to a payment of 25% of the total severance pay she would have received, had the termination been a dismissal without cause.

Employees are entitled to paid leave on national public holidays. If employees do work on national holidays, they are entitled to an additional 100% compensation based on their regular hourly rate.