Argentina Labor Court declares labor reform article unconstitutional

The National Chamber of Labor Appeals (Sala I) has declared Article 55 of Law 27.802, part of the government's labor reform, unconstitutional. The ruling, signed by judges Enrique Catani and Gabriela Vázquez, originated from a case involving a worker dismissed from a laundry in 2022.

The court determined that Article 55 violates several constitutional principles, specifically Articles 14, 16, 17, and 14 bis. The central issue is the mechanism for updating labor credits. While the general regime (Article 54) uses the Consumer Price Index (CPI) plus a 3% annual interest rate, Article 55 established a different rule for lawsuits already in progress at the time the law took effect.

Under Article 55, these pending claims were subject to a floor of only 67% of the amount that would have been calculated under the general regime. The judges argued this creates an unreasonable distinction that penalizes workers for seeking judicial protection, effectively resulting in a reduction of up to 33% in severance pay. The court rejected the 'doctrine of shared effort' as a justification for reducing the economic value of these credits.