Argentina's Senate gave final approval to President Javier Milei's labor-law overhaul on February 27, voting 42 to 28 with two abstentions, Spain's RTVE reported. The result converted one of the administration's most contentious proposals into legislation after the lower house had changed the Senate's earlier text. The political victory did not end the dispute. Unions and opposition lawmakers objected to reduced protections, while government allies argued that making employment rules less costly and more predictable could bring workers into the formal economy.
A revised bill clears the chamber
The Senate had first approved a version of the measure on February 11. Deputies subsequently amended it, requiring another vote in the upper house. RTVE reported that an article modifying the treatment of sick leave was removed. Distinguishing these stages matters: the February 27 vote was the definitive Senate decision on the modified legislation, not the first time senators had considered labor reform. The chamber also approved a separate juvenile criminal-law change that day; its provisions should not be confused with the labor statute.
Among the labor measure's changes, RTVE identified a narrower basis for calculating dismissal compensation, excluding certain items such as annual bonus and vacation pay from the calculation. The legislation also allows an hours bank so that additional time worked can be compensated through time off or shorter days, rather than only through conventional overtime payments. Employers and workers could also arrange wages in a foreign currency. Each provision would affect negotiations differently depending on sector and contract; none by itself established that formal employment would immediately increase.
Unions and employers face a changed bargaining system
RTVE reported provisions requiring minimum service of 75% in sectors designated essential during strikes, and restrictions on union assemblies that impede a company's ordinary operation. The law changed the relationship between collective agreements reached at company level and those agreed across industries. It also altered the continuing force of expired contracts, while preserving certain working conditions. These rules reached well beyond an individual firm's hiring decision into the balance of power between unions and employers.
Supporters and critics presented sharply different interpretations of the same package. Senator Patricia Bullrich, leading the government bloc, argued that the old system discouraged hiring and pushed workers into informality, according to RTVE. Peronist senators objected to the severance-assistance fund: Jorge Capitanich called it an incentive to dismiss workers, while Mariano Recalde argued that it socialized employers' liabilities. Justicialist leader José Mayans called the limitations on strikes unconstitutional. Those are attributed positions, not judicial findings. The presence of demonstrators outside Congress showed that legislative approval did not amount to social consensus.
The next test is implementation
The government had obtained a major statute, but passage alone could not demonstrate that lower dismissal costs would result in new formal jobs. That claim required evidence from future employment, wages and compliance data. Opponents' constitutional arguments, too, would have to be tested through actual challenges and judgments, rather than assumed to have prevailed or failed on the day of the vote. Companies, unions, administrators and courts still had to interpret the new rules. The vote closed an important congressional chapter and opened a potentially longer contest over how Argentine work would be organized.
