Argentina Senate Passes Milei’s Labor Reform, Advancing Pro-Market Overhaul
BUENOS AIRES – The Argentine Senate passed a sweeping labor reform package on Thursday, marking a significant legislative victory for President Javier Milei and his administration’s broader efforts to deregulate the nation’s economy. The approval represents a critical step in the government’s pro-market overhaul, which aims to modernize labor regulations and stimulate private sector growth.
The legislation, which has been the subject of intense debate within the upper house, was approved following a marathon session that highlighted the deep ideological divides regarding the country’s economic future. The reform package introduces several key changes to Argentina’s employment laws, including the extension of probationary periods for new hires from three months to up to eight months in certain sectors. Additionally, the bill modifies the severance pay structure, allowing employers to opt for a private capitalization fund model—modeled after the construction industry—intended to reduce litigation costs and financial uncertainty for businesses.
Proponents of the bill, including the ruling coalition and center-right allies, argued that the reforms are necessary to incentivize hiring, particularly for small and medium-sized enterprises (SMEs) that have struggled under the weight of rigid labor codes and high inflation. The government maintains that reducing the regulatory burden on employers is essential to reversing years of economic stagnation and attracting foreign direct investment.
“This legislation provides the legal certainty required to modernize the labor market and generate genuine employment,” a government spokesperson stated following the vote. “It is a decisive move toward normalizing our economy and integrating Argentina into the global market.”
The measure faced fierce opposition from the Peronist bloc and labor union representatives, who characterized the reforms as a regression in worker rights. Critics argued that the changes would increase job insecurity and erode the bargaining power of organized labor. The General Confederation of Labor (CGT), the country’s largest union umbrella group, has previously mobilized protests against the administration’s austerity measures and warned that the new law could lead to widespread dismissals without adequate compensation.
Despite the political friction, market analysts viewed the Senate’s approval as a positive signal for Argentina’s investment climate. The passage of the bill suggests that President Milei retains the political capital necessary to navigate a fragmented Congress and implement structural changes.
With the Senate’s approval, the administration is expected to move quickly to implement the new regulations. The focus now shifts to the reaction from the labor sector and the practical application of the new rules in an economy that continues to grapple with the challenges of stabilization and recovery.
