Argentina: DNU 70/23 — Current status of recent labor reforms

In brief

The National Chamber of Labor Appeals, at the request of the General Confederation of Workers (CGT) and the Central of Workers of Argentina (CTA), suspended the effects of the Decree of Necessity and Urgency No. 70/2023 of "Bases for the Reconstruction of the Argentine Economy" dated 20 December 2023 ("DNU 70/23"), as regards the operability of the provisions contained in its Title IV for the reform of the Labor Contract Law. In view of the extraordinary appeal filed by the national government in the case of the CGT, the National Labor Court agreed to submit the case to the Supreme Court of Justice of the Nation, maintaining the effects of the precautionary measure until the court issues its decision.


Likewise, the National Federal Administrative Court has refused to generate a single class action against DNU 70/23. This has led to the existence of several decentralized challenges in different jurisdictions, in which new precautionary measures will surely be issued.

In view of the diversity of the challenges filed against DNU 70/23, it is expected that the Congress of the Nation, and ultimately the Supreme Court of Justice of the Nation, will end up defining these issues.

In depth

What did the National Labor Court decide?

On 3 and 4 January 2024, the Court of Appeals, with the votes of Dr. Sureda and Dr. García Vior, at the request of the CGT and the CTA, ordered the precautionary suspension of the effects of DNU 70/23 as regards the operation of the provisions contained in its Title IV (reform of the Labor Contract Law) until a decision on the merits is rendered.

The Court of Appeals considered, among other issues, that it was not apparent that DNU 70/23 had complied with the constitutional requirements for its enactment. In addition, the court pointed out that there are rights at stake that make up the essence of labor relations, the freedom and dignity of workers, the principles of protection, unwaivability, equal treatment and nondiscrimination, and the preservation of the contract that structure the specialty. It also pointed out that collective representation by the CGT and the CTA was necessary in each case; otherwise, the main means of protection to which workers can resort in the face of their inability to negotiate at the individual level — which is none other than union action — would be jeopardized.

Are the provisions of the Labor Contract Law that were repealed or modified by Title IV of DNU 70/23 still in force?

The national government appealed through an extraordinary appeal against the precautionary resolutions before the Supreme Court of Justice of the Nation.

On 18 January 2014, in the case of the CGT, the court accepted the extraordinary appeal filed by the national government against the precautionary resolution suspending the effects of the labor chapter of DNU 70/23.

In so deciding, the court understood that there was a federal issue because the validity and legitimacy of DNU 70/23 has been affected, in its operability and effectiveness, by a judicial resolution suspending its effects. Likewise, there are reasons of institutional gravity that legitimize the intervention of the Supreme Court of Justice of the Nation because the operation of legal institutions and the effectiveness of a technical means provided for in the National Constitution, such as the issuance of decrees of necessity and urgency, have been affected. Finally, it referred to the jurisprudence of the Supreme Court of Justice of the Nation itself, which on many occasions accepted the review of precautionary measures that may cause damage that cannot be repaired later, even when they were not final judgments.

However, it ordered that the effects of the precautionary measure be maintained until the Supreme Court resolves the extraordinary appeal. This is because, among other considerations, dependent workers are subjects of preferential constitutional protection and constitute a socially vulnerable sector. In addition, the granting of the appeal with devolutive effect is the only technical way to preserve the principle of efficiency of the jurisdiction and to allow the solution of a conflict that has institutional gravity and that must be resolved by the judges to safeguard order and social peace.

Which workers are covered by the precautionary measures?

The precautionary measures apply to personnel represented by the unions adhered to the labor unions that objected to DNU 70/23. In general terms, this applies to all personnel under collective bargaining agreements.

There is uncertainty with regard to personnel outside the collective bargaining agreement, since it is disputed whether they are effectively represented by the union. Although there are reasons to argue that the suspension of the effects of the DNU does not apply to them, the issue is controversial and will surely be the subject of further debate.

What did the judges say regarding DNU 70/23?

In the cited rulings, the judges said that it is not explained how the proposed reforms, if applied immediately and outside the normal process of enactment of laws, could remedy the situation regarding the generation of formal employment, especially when DNU 70/23 itself recognizes that such generation of employment has been stagnated for 12 years.

They also said that the DNU 70/23 would try to bypass the legislative process, when at the same time the president called the Congress to extraordinary sessions to deal — among other issues — with the ratification of DNU 70/23. Likewise, the judges recalled the doctrine of the Supreme Court of Justice of the Nation that the generic considerations set forth in the recitals of the Decrees of Necessity and Urgency are not valid to justify the enactment of legislative measures by the National Executive Power.

What is the impact of the resolutions issued in other jurisdictions with respect to the validity and effects of the injunction obtained by the CGT?

On 4 January 2024, the Court of First Instance in Federal Contentious Administrative Matters opened the judicial fair to resolve various challenges against DNU 70/23 and rejected the request that the request be processed as a class action. The consequence of this decision, if it were to become final, would be to allow the existence of multiple proceedings challenging DNU 70/23, in connection with the different areas affected and before different courts (including the claims pending before the National Labor Court), instead of a single concentrated collective proceeding before the National Federal Contentious-Administrative Court. This decision was confirmed on 18 January 2024 by the Court of Appeals and will probably be appealed before the Supreme Court of Justice of the Nation.

At the same time, and as a consequence of this decision, several legal actions are being processed in several federal and provincial courts, challenging several aspects of DNU 70/23. Among these, those worth mentioning are the repeal of Law No. 26,737 of the Regime for the Protection of the National Domain on the Ownership, Possession or Tenancy of Rural Lands and Law No. 27,551 on Rentals, as well as the reforms regarding the tariffs of prepaid medicine companies, prescription of medicines and the yerba mate industry, among others.

Who will definitively resolve the claims on the validity of DNU 70/23?

The Supreme Court of Justice of the Nation will eventually have to resolve these claims, since the one related to the precautionary measures of the National Chamber of Labor Appeals is already within its jurisdiction.

At the same time, however, the eventual approval or rejection of DNU 70/23 is being processed, both through the mechanism established by the National Constitution and Law No. 26,122 (with the prior intervention of the Permanent Bicameral Commission) and through the draft of the "Law of Bases and Starting Points for the Freedom of the Argentines," which among its articles includes the express approval of DNU 70/23.

Although the judicial process and the legislative process are independent procedures that operate in parallel, the outcome of one could have a significant impact on the other.

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