B. COLLECTIVE LAW

14.159 Law 23,551 enacted in March 1988 governs labor unions, i.e., associations formed to defend employees’ interests.

14.160 Labor unions may be organized as: a) Unions; b) Federations grouping associations of first degree; or c) Confederations grouping federations. Labor unions may be formed by: a) Employees sharing the same activity or similar activities; b) Employees of the same occupation, profession or category even though they perform different activities, or c) Employees working for the same company.

14.161 Any employee over fourteen years old may become a union member. Direction and administration of the union is vested to a body of at least five members who should hold office for a maximum of 4 years with the right to be reelected. Once a year a ordinary union meeting or congress must be held and extraordinary meetings may be held when the administrative body deems it convenient.

14.162 A union acquires legal status once registered. The most representative union, territorially or in number of members is recognized as having union legal representation.

14.163 Union representation within the company is vested in staff representatives and internal commissions or similar bodies. These are chosen at elections called by the union, which take place at the company, during working hours and by the direct and secret vote of employees. Representatives hold office for a maximum of two years. The union representative has the right to : a) verify application of legal and conventional rules, even taking part in inspections ordered by the application authority; b) meet periodically with the employer or his representative; c) submit to employers employees’ claims, with the prior authorization of the union.

14.164 If there is no provision to the contrary in the collective convention or similar agreement, the minimum number of union representatives is: 10 to 50 employees, 1 representative; 51 to 100 employees, 2 representatives; 101 employees and more, 1 representative more for every 100 employees.

14.165 Union representatives are entitled to union protection. This means that as from the time they are candidates for representation they cannot be dismissed, suspended or have their working conditions modified, without prior judicial resolution. This means that the employer must start summary proceedings demanding disbarrement in order to apply any sanction. In case this procedure is not followed, the union representative may claim also through summary proceedings reinstatement plus the salaries not received, or he may consider himself dismissed, in which case he is entitled to receive, in addition to compensation for dismissal without cause, an amount equivalent to the remunerations he would have received during office plus one more year.

14.166 The law also establishes which of employer’s acts are considered to be unfair or unethical practice, such as to provide funds directly or indirectly to a labor union, intervene or interfere in its organization, operation or administration, to make difficult or promote membership to a particular labor union, to take measures against employees due to their participation in legitimate union actions, denial to negotiate collective employment conventions, etc.. The application authority is the Ministry of Labor and Social Security.

14.167 Argentina has ratified O.I.T.’s Convention 154 on the encouragement of collective negotiation, adopted by International Work Organization’s General Conference.

14.168 Employment Collective Conventions (law 14,250) must be signed by an employer’s professional association, an employer or a group of employers and an employees’ professional association with union legal representation granted by the Ministry of Labor and Social Security. Conventions must be in writing and state: place and date of execution, name of the parties with proof of their legal status, activities and categories of employees, territorial application area and period of effectiveness. They are subject to ratification by the Ministry of Labor and Social Security.

14.169 The major difference between U.S.A. labor conventions and Argentine ones is that the working conditions continue in effect until a new contract is signed -ultra retroactivity- except if the contrary is expressly agreed.

14.170 Law 14,786 establishes the procedure to be followed in cases of collective conflicts of interest submitted to the Ministry of Labor and Social Security. Once a conflict arises and cannot be solved between employer and the labor union, the parties before taking measures, must submit the conflict before the application authority to follow obligatory settlement proceedings.

14.171 The Ministry is entitled to hold as many hearings as it may deem necessary within a 15 working day period that can be extended once for an extra 5 days. When agreement between the parties is not reached, it may propose a settlement. If settlement is not accepted, the Ministry will ask the parties to submit the matter to voluntary arbitration. If this is not accepted the parties are free to take measures defending their interest.

4. Preventive proceedings for Company in crisis

14.172 When the employer considers that he will cause dismissals or suspensions due to force majeure, economic or technological causes that affect more than a certain percentage of employees (Total employees less than 400 - 15%, Total between 400 and 1000- 10%, Total over 1000 - 5%), prior to services notice preventive proceedings for companies in crisis must take place. These proceedings are filed before the Ministry of Labor and Social Security that must summon the employer and the corresponding union therefore opening ten day period for negotiation. During such period the employer may not effect the actions nor the union decide any direct action against the employer.. Once the term has elapsed if no agreements is reached the crisis proceedings is concluded. Consequently, the employer may order the dismissals or suspensions decided according to the employment agreement law, subject to the responsibilities established therein.

MENU


C. SOCIAL SECURITY

14.173 Law 23,660 establishes the rules under which Social Welfare Services may operate: a) Union Welfare Services run by the labor union with union legal representation and signers of employment collective conventions; b) mixed administration institutes created by special laws; c) Social Welfare Services of State owned companies; d) Social Welfare Services of management staff; e) those created through agreements with private or public companies (ratified by the application authority); f) Social Welfare Services for the civil and military staff of Military Forces; and g) any other entity authorized to operate within the aims established by law. All must be registered.

14.174 Beneficiaries according to the law are all employees either of the private or public sector. Primary family groups are also included (spouse, single children up to 21 years old or up to 25 if they follow government approved studies, those who live with the beneficiary and those authorized by the application authority (Social Welfare Service Federal Board).

14.175 The system is funded by means of a contribution by the employer equivalent to 6% of the employee’s remuneration and a contribution of 3% of same by the employee. Employees must also contribute 1,5% per each beneficiary excluded the primary family group for whom he is responsible. Any employee not included in collective conventions may pay their contributions to any social welfare service for management staff.

14.176 10% of the contribution must be paid directed to the Health Insurance Federal Administration (Administración Nacional de Seguro de Salud - ANSSAL), which is the body created by law 23,661 to control the health insurance national system is established with the scope of a social welfare insurance. This insurance has as its main objective to provide equal, complete and humane health services for the promotion, protection and recovery of health. The health insurance brokers are the social welfare services created by this system.

14.177 Law 24,714 establishes a Family Allowance System that is funded by a contribution of the employer of 9% on the total amount of remunerations of his employees. These allowances are: A) Paid monthly: Prenatal allowance (equivalent to the amount per child), Allowance per child, Disabled child allowance; B) Paid on a case by case basis: Maternity allowance, Mother leave of absence allowance in case of child born with Down Syndrome; C) Paid annually: Annual School Allowance; and D) Paid on a case by case basis: Birth allowance, Adoption allowance and Marriage allowance.

14.178 Law 24,241 deals with the Retirement and Pension System to cover old age, disability and death. It is a two level system: 1) a public system, based on benefits granted by the State (distribution system) and 2) a system based on individual capitalization (capitalization system). This mixed system combines both funding methods which coexist and do not exclude one another.

14.179 Those included in the Retirement and Pension System are natural persons over 18 years of age that work in one of the activities enumerated by the law. There is also voluntary incorporation to the system. Those exempt are professionals, researchers, scientists and technicians hired abroad to render services in the country for a period of no more than two years and only once, under the condition they do not have permanent residence in Argentina and are covered in their country of origin against the contingencies covered by this law.

14.180 The funding of the System is based on the employees’ and employer’s contribution (11% and 16% respectively). The personal contribution of independent workers is 27% of preestablished sums depending on the work performed.

14.181 The Public System is based upon the solidarity principle. The benefits granted are: universal basic benefit, compensatory benefit, disability retirement, death pension, permanence additional benefit and old age benefit. Those entitled to the universal basic benefit are men over 65 years old and women over 60 years old (who may choose to continue working until the age of 65) who must prove 30 years of service with contributions. Beneficiaries may re-enter remunerated activities with the obligation of making contributions. These contributions are directed to the Unemployment Fund and give no right to readjustments or improvements in the benefits.

14.182 The capitalization system is funded with the personal contributions of employees and with 11 points of the 27 paid by independent workers. These contributions are received by private corporations, Retirement and Pension Funds Administrators (A.F.J.P.), and workers may freely choose one of these. This system grants the following benefits: common retirement, disability retirement, pension due to affiliate’s or beneficiary’s death. In order to increase the common retirement benefit or to anticipate the date of retirement, affiliates may make voluntary contributions to their individual capitalization account.

14.183 The law also determines the A.F.J.P.’s operation, authorization requirements, minimum capital, publicity, commissions, investment general criteria, etc. The fund formed by the contributions and its profits must be kept totally independent from the net worth of the administrators.

14.184 Affiliates will receive the balance of their individual capitalization account through one of these modalities: Life retirement income: programmed retirement or divided retirement. Affiliates may retire before retirement age by means of the Early Retirement System.

14.185 The system established by this law is guaranteed by the Federal State.

MENU