Argentine justice system halts President Javier Milei’s labor reforms

President Javier Milei’s sweeping decree to downsize the Argentine government suffered a legal setback on January 3 when the Labor Court invalidated a portion of the decree he signed on December 20. The temporary injunction was issued in response to an appeal by the General Confederation of Labor (CGT), the country’s largest federation of mostly Peronist labor unions. Various sectors of Argentine society and constitutional law experts have submitted appeals arguing that the president’s decree is unconstitutional.

The ruling reviewed by EL PAÍS suspended a portion of the decree on the grounds that there is no proven need or urgency for the executive branch to bypass the National Congress. The special decree declaring an urgent national need (DNU) is a constitutional mechanism enacted in 1994 that enables the executive to establish or modify laws when urgent action is required during natural or societal disasters. However, the Labor Court agreed with constitutional lawyers who contended that Milei’s decree does not meet the DNU requirements.

The Labor Court decided that the proposed reforms, if implemented immediately and outside the usual legislative process, do not provide a clear explanation of how they would create formal employment opportunities. On this basis, the court suspended Title IV of the decree, which proposes the deregulation of an Argentine labor market characterized by very beneficial conditions for white-collar workers. Title IV also restricted the right to strike, eliminated sanctions for irregular labor contracts, authorized a 12-hour work day, lengthened the probationary period for new employees, and enabled compensation changes, among other measures.

The government immediately said it would appeal the temporary injunction on the grounds that the Labor Court does not have jurisdiction over the matter. Manuel Adorni, the president’s spokesperson, previously acknowledged that the decree is expected to go through a lengthy legal process. An appeal by the government could eventually reach the Supreme Court, which already has another claim against the decree brought by the province of La Rioja in western Argentina. In this case, the appeal went directly to the Supreme Court since it originated from a provincial government.

General strike on January 24

The CGT applauded the court’s decision and released a statement saying, “They cannot not defeat us as long as we remain united.” Labor unions held a large rally on December 27, with an estimated 20,000 people protesting the decree. At the same time, the Milei administration announced that it would send Congress an omnibus law with over 600 articles that had not been included in the DNU decree, signaling that the president intends to fulfill his promise to fundamentally change the political, social and economic structure of Argentina. The omnibus law was deemed “significantly worse” than the DNU decree by union leaders, prompting the CGT to call for a general strike on January 24.

The DNU decree became effective on December 29. It contains over 300 measures to repeal laws without any Congressional input, eliminate government regulations, enable the privatization of state-owned enterprises, open the door to U.S. dollar-denominated transactions, and make the healthcare system more flexible. Not everyone is against the proposed changes, but many believe that the methods are inconsistent with the country’s constitution. The Labor Court just dealt the first blow, and there are another 30 appeals challenging the constitutionality of the decree.

The DNU faces another obstacle in Congress, where it requires approval. A bicameral committee of eight senators and eight representatives will work through the summer recess to analyze whether the decree satisfies the need and urgency requirements. If the decree is endorsed by the committee, it will be presented to the plenary sessions of each chamber. Then it will be accepted or rejected in its entirety based on an absolute majority vote. If only one chamber approves the decree (or if it is not debated), it will be considered valid. However, if both chambers vote against it, the decree will be rejected.

Milei’s La Libertad Avanza (Liberty Advances) party does not have majorities in Congress: it only has 38 of 257 representatives and seven of 72 senators. Milei can rely on support from legislators aligned with ex-president Mauricio Macri, but not necessarily from parties like the Radical Civic Union, which stated that the country “needs a change” but it must “follow established procedures.” The Peronists, Argentina’s main political force for decades, completely rejected the decree, as did the left-wing parties. The plenary session debates will have to wait until March 1 when Congress convenes again.

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