Argentina Lower House Backs Milei Labor Reform

Argentina’s lower house of Congress on Friday approved a controversial labor reform bill backed by libertarian President Javier Milei, despite a nationwide strike staged by unions a day earlier.

After debating amendments into the early hours, lawmakers passed the bill by 135 votes to 115, sending it back to the Senate for a final vote. Investors are closely watching whether Milei can continue advancing his free-market agenda.

The government says the reform will attract investment and boost formal employment. Ruling party lawmaker Lisandro Almiron questioned the value of extensive labor laws if they fail to create jobs.

The overhaul lowers severance costs by excluding certain bonuses from compensation calculations and introduces an employers’ fund for severance payments, financed by contributions currently directed to the pension system.

Opposition lawmakers warn the fund could ease layoffs and strain pension resources. The reform also relaxes hiring rules, modifies vacation policies, allows longer workdays of up to 12 hours and permits salaries to be paid in foreign currency.

Unions argue the changes undermine worker protections and restrict the right to strike. The CGT union federation called a 24-hour stoppage that disrupted transport and grain exports. The Senate is expected to vote next week.

(reuters, luc)