Argentine Court Suspended President Milei’s Labor Reforms Encompassed In His "Mega-Decree"

Marina Vanni

Argentina’s new libertarian president, Javier Milei, faced a setback on Wednesday, January 3rd, as a court suspended the labor reforms included in his so-called "mega-decree", which encompasses broad economic changes and deregulation measures.

The decision by the National Chamber of Labor Appeals came in response to a challenge filed by the CGT (General Labor Confederation) trade union body, the largest in the country, asserting that the measures, effective since last Friday, undermine fundamental worker protections such as the right to strike.

The three judges scrutinized elements of Milei’s decree, which included extending the legal job probation period from three to eight months, reducing severance pay, and cutting pregnancy leave.

Judge Alejandro Sudera questioned the timing and necessity of the decree signed just days after Milei assumed office and suspended the measures until they undergo proper scrutiny in Congress. Sudera expressed concerns about the potentially punitive nature of some measures. Solicitor General Rodolfo Barra confirmed that the government intends to appeal the ruling, setting the stage for further legal battles over the controversial labor reforms.

Last week, thousands took to the streets to protest against the self-proclaimed "anarcho-capitalist" president’s reforms, which sparked heated debates about their constitutionality. The CGT has now called for a general strike on January 24 in response to the contentious changes.

Milei’s mega-decree, a first in Argentina’s history, seeks to dismantle more than 300 economic regulations, signaling a departure from the country’s tradition of extensive government intervention in the market. The reforms encompass the elimination of rent regulation, plans for state enterprise privatization, and the termination of thousands of civil service contracts.

Argentina is facing a severe economic crisis with over 160% year-on-year inflation and around 40% of its population living in poverty, and has been grappling with the aftermath of decades of financial mismanagement. Milei, who won the presidential election in November, has pledged to curb rising prices through drastic measures, including severe spending cuts.

The president’s administration initiated a significant devaluation of the Argentine peso and announced substantial cuts in state subsidies for fuel and transport shortly after taking office. Public construction projects have been halted, and state advertising faces a year-long suspension.

As the legal battles unfold, the political landscape in the country becomes even more volatile.

Author: Marina Vanni