A termination of employment in Argentina is the rescission of an employee's employment contract, decided unilaterally by the employer, with or without a cause. As the requirements to proceed with a termination of employment and the consequences of the decision are regulated by each piece of legislation, there are differences depending on the country whose legislation is to be applied. This article refers exclusively to termination of employees who, having worked in Argentina, are governed by the laws of that country.
In Argentine law, labor dismissal is regulated by the Labor Contract Law (hereinafter, LCL) approved by Law 20744 in 1974, with some subsequent amendments and complementary provisions. In 1976, Decree 390/76 was issued, which approved an ordered text reflecting these reforms, which is why it is sometimes referred to as Law 20744 (o.t. decree 390/76).
Employment stability
Concept and classification
Employment stability is the right of the employee to keep their employment as long as there is no just cause for termination. Legal systems aimed at protecting stability can be classified as follows:
Stability or absolute stability: if there is no just cause, the termination is considered null and void, the employer's obligations subsist, including the payment of salaries, and the reinstatement to employment is ordered. Failure to reinstate the employee generates consequences that vary according to the chosen model: The employer is compelled to reinstate the terminated employee, and punitive sanctions may be applied to that end. If the employer does not reinstate the employee, he/she is only entitled to compensation. Improper or relative stability: the worker terminated without cause is entitled to a severance payment which, depending on the legislation, may be: Tariffed, it is calculated on the basis of objective data (in general, length of service and remuneration). Non-tariffed, the judge fixes it according to the damage caused by the termination. In this case, the personal circumstances of the employee, such as dependent family, difficulty in obtaining new employment, age, etc. are relevant.
Legal regime in Argentina. The reform of the Argentine Constitution in 1957 established in Article 14 bis the right of employees to be protected against arbitrary termination. Although protective laws had already been enacted before that date, the reform not only gave doctrinal support to such laws, but also increased the powers of the judges to control the measures that complied with the constitutional mandate, thus allowing them to invalidate them in extreme cases, as will be analyzed in the corresponding section.
In Argentina there existed for bank and insurance company employees a system of absolute stability in which the employee had the right to continue receiving their remunerations until he retired, unless there was a termination with just cause. This system was declared unconstitutional by the Supreme Court of Justice and was later repealed.
The system in force for the generality of employees, which has as its main antecedent in Law 11729 of 1932, is of relative stability, that is, in case of termination they are only entitled to receive an indemnity. The exception are the union representatives, for whom there is a system of absolute stability, which is analyzed in the corresponding section.
Stability due to union activity
Staff delegates, internal commissions and similar bodies exercising their functions in the workplace, as well as employees who, due to occupying elective or representative positions in trade union associations with trade union status, in bodies requiring trade union representation, or in political positions in the public authorities, cease to render services for a period of one year as from the end of their term of office (articles 50 and 51 of Law 23551), are entitled to union stability.
The same benefit is valid for six months for those who apply for a union representation position. Employees with union stability can only be terminated if just cause is invoked and there is prior judicial authorization. If the termination does not meet these conditions, the affected party may sue for reinstatement in their position, plus the salaries paid during the judicial process.