A labour reform for inclusion and growth

The central assumptions The two central premises guiding this research are:

1. A labour reform should not be defined by reducing overall business costs or undermining labour rights, but by the need to improve the quality of employment.
2. Labour reform is not the main tool for job creation; economic policy is.

Supply and demand-side reforms

This paper develops the minimum contents of each of the following proposals, many of which will be the subject of focused and detailed study in individual papers to come. The proposal has two dimensions: “supply-side”, which aims at facilitating supply and entrepreneurial costs, and “demand-side”, which focuses on labour demand and improving its quality. In detail:

Supply-side dimension and entrepreneurial costs	Demand dimension and quality employment.
Special regime of contributions and ART in micro and small enterprises.	Reform of working hours and breaks (reduction, limits on time management, eligible breaks, limits on the use of hour banks).
Crisis procedure/controlled labour flexibility in companies/sectors/geographical areas.	Reform of the Minimum, Vital and Mobile Wage (periodicity, disengagement from social programmes, retirement and earnings).
Updating of collective agreements -especially pre-1990- to the new forms of production and services.	Extension/modification of leave (paternity, etc.).
Simplification of fines and general reform/homogenisation of the base calculation for compensation.	Regulation of fraudulent outsourcing.
Cross-sectoral coordination of collective bargaining (standardise non-wage costs, e.g. solidarity quota and employer contributions; common framework for reopening and extending agreements, productivity criteria and profit sharing).	Regulation of work on digital platforms.
	Regulation of Joint Health and Safety Committees.

   

Improving the supply side to facilitate the flow of formal employment.

The supply-side dimension presents five policies that promote greater tax fairness, regulatory simplification and updating, inter-sectoral coordination and crisis navigation tools for the business sector. These policies are:

1. Reform of employer contributions for micro and small enterprises and the ART system. Currently, the system of employer contributions has an overlapping of regulatory patches made over time, which make it unreadable and unpredictable. To this end, it is proposed to simplify the system by unifying the various differential rates and a reduction in employer contributions that will be permanent for micro-enterprises and, for small enterprises, temporary for new hires. In addition, limits are proposed on the ceilings of labour risk tax rates in micro-enterprises with a greater breakdown by sector.
2. Creation of an Employment and Production Stabilisation System (SEEPRO), an anti-cyclical labour policy that provides tools for companies to navigate and recover from Argentina’s economic crises. In this sense, the SEEPRO proposes controlled and temporarily limited flexibility through the institutionalisation of different crisis procedures, such as suspensions and reduction of working hours, accompanied by the possibility of applying for a wage subsidy.

1. 1. Updating, within the framework of the Social Dialogue, of collective agreements whose categories are affected by the new forms of production and deployment of services.
   2. Simplification of the system of fines for unregistered work and homogenisation of the basis for calculating severance pay in order to provide predictability, reduce litigation and give certainty to business costs. In addition, this simplification is complemented by a permanent platform for monitoring and technical assistance in labour relations.
   3. Creation of the Council for Income and Labour Policies (COPyL), a tripartite institutional mechanism – the Economic and Social Council, the Wage Council and the National Teachers’ Paritaria – in order to manage the distributive dispute at the end of the social pact.

Improving demand for quality employment

The demand dimension presents six policies that seek to advance new rights linked to greater working time sovereignty as well as to strengthen minimum wage labour institutions and the fight against outsourcing in order to guarantee quality jobs. These are:

 

1. Reduction of the working day for the distribution of time and income in perspective compared with the countries of the region and taking into account sectoral differences.
2. Institutional strengthening of the Minimum, Vital and Mobile Wage by disengaging it from other programmes so that it can once again become the distributive parameter of workers’ income.
3. New labour rights through the extension of leave, distribution of care hours and eligible holidays and breaks in order to achieve greater sovereignty over working time.
4. Establishment of a system of regulations and sanctions for labour outsourcing to prevent fraud and misrepresentation.
5. Creation of a Statute for Platform Workers that combines standards of the Labour Contract Law (LCT) with the recognition of new labour rights and guidelines such as the algorithmic explainability of automated decisions that impact on work.

1. 1. Innovations in the Joint Health and Safety Committees through the incorporation of trade unions to improve the working environment and control the accident rate.