Argentina's lower house passes labor reform despite strike
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A drone picture shows demonstrators taking part in a protest outside Argentina's National Congress on the day lawmakers discuss labor reforms proposed by President Javier Milei's libertarian government to attract investment and revive growth, which unions say would roll back workers' rights, in Buenos Aires, Argentina February 19, 2026. REUTERS/Alessia Maccioni/File Photo
BUENOS AIRES, Feb 20 - Argentina's lower house of Congress approved on Friday a contentious labor reform bill backed by libertarian President Javier Milei, despite a nationwide strike a day earlier by unions opposing the changes.
Lawmakers debated amendments until the early hours on Friday before passing the bill by 135 votes to 115 and sending it back to the Senate for a final vote.
Investors have been closely watching the legislation to see whether Milei is able to continue implementing his free-market agenda.
The government says the bill, backed by the ruling party and its center‑right allies, will spur investment and boost formal employment.
"What good is an entire library of labor legislation if, at the end of the day, the system it establishes doesn’t serve to create jobs?" ruling party lawmaker Lisandro Almiron asked during the debate on the bill.
EMPLOYERS' FUND COULD MAKE LAYOFFS EASIER
The reform will lower severance costs for employers by excluding certain bonuses from the compensation formula. One of its more controversial points, which the opposition didn't succeed in removing from the bill, is a fund that employers would create for severance payments.
It would be financed by contributions currently earmarked for the Argentine pension system, according to Franco Marconi, an analyst at the Liberty and Progress Foundation, a Buenos Aires think tank.
The fund could make it easier for companies to lay off workers, but would impact the pension system's resources, said opposition lawmakers.
"In practice, this would imply the emergence of a new domestic long-term savings player," said Argentine consulting firm Portfolio Personal Inversiones.
The reform also eases hiring rules, changes the vacation time system, allows for extending the standard workday from eight to 12 hours and for salaries to be paid in foreign currency.
BENEFITS 'DIRECTED TOWARDS BUSINESS SECTORS'
Unions say the proposed overhaul threatens long‑standing worker protections. They point to how the reform imposes new limits on the right to strike by requiring essential services to maintain minimum operations during stoppages.
The umbrella union CGT called a 24‑hour stoppage on Thursday by transport workers, public sector staff and bank employees. Argentina, one of the world's leading food exporters, also saw its grain exports affected on Wednesday and Thursday by a maritime workers' protest.
"There is not a single letter or a single line (in the bill) that favors workers at all, and when there is any kind of benefit, it is directed toward the business sectors," opposition Peronist lawmaker Sergio Palazzo said during the debate.
Among the last-minute changes was the removal of an article that reduced sickness-related benefits for employees.
The Senate is expected to pass the bill into law next week and President Milei intends to have the legislation approved by the time Congress begins its ordinary sessions on March 1. REUTERS
