In Argentina, termination of employment occurs when an employer ends an employee's contract, either with or without a specific reason. As the requirements to proceed with a termination of employment and the consequences of the decision are regulated by each piece of legislation, there are differences depending on the country whose legislation is to be applied. This article refers exclusively to termination of employees who, having worked in Argentina, are governed by the laws of that country.Pursuant to Article 3 of the Argentine Labor Contract Law, its provisions apply to all contracts executed in Argentina, whether entered into within or outside its territory.

In Argentina, the dismissal of workers is governed by the Labor Contract Law (LCL), established by Law 20744 in 1974, with later updates and additional rules. In 1976, Decree 390/76 was issued, which approved an ordered text reflecting these reforms, which is why it is sometimes referred to as Law 20744 (o.t. decree 390/76).

Employment stability

Concept and classification Employment stability is the right of the employee to keep their employment as long as there is no just cause for termination. Legal systems aimed at protecting stability can be classified as follows:

Stability or absolute stability: if there is no just cause, the termination is considered null and void, the employer's obligations subsist, including the payment of salaries, and the reinstatement to employment is ordered. Failure to reinstate the employee generates consequences that vary according to the chosen model: The employer must reinstate the terminated employee. If they fail to do so, they may face penalties. If the employer does not reinstate the employee, the employee is only entitled to compensation. Improper or relative stability: the worker terminated without cause is entitled to a severance payment which, depending on the legislation, may be: Tariffed, it is calculated on the basis of objective data (in general, length of service and remuneration). Non-tariffed, the judge fixes it according to the damage caused by the termination. In this case, the personal circumstances of the employee, such as dependent family, difficulty in obtaining new employment, age, etc. are relevant.

Legal regime in Argentina The 1957 reform of the Argentine Constitution introduced Article 14 bis, giving employees the right to protection against unfair dismissal. Before 1957, protective laws already existed, but the reform strengthened these laws and gave judges more power to enforce them, even allowing judges to overturn dismissals in extreme cases.

In Argentina, bankLaw 12637 and insurance employeesDecree-law 12366/45 once had a system of absolute job stability, allowing them to keep earning their salaries until retirement unless they were fired for a valid reason. However, the country's Supreme Court later declared this system unconstitutional, and it was repealed.

Most employees in Argentina now have a system of relative stability, introduced by Law 11729 in 1932. This means they only receive compensation if dismissed. The exception is union representatives, who still have absolute job stability, discussed in another section.

Stability due to union activity Staff delegates, internal commissions and similar bodies exercising their functions in the workplace, as well as employees who, due to occupying elective or representative positions in trade union associations with trade union status, in bodies requiring trade union representation, or in political positions in the public authorities, cease to render services for a period of one year as from the end of their term of office (articles 50 and 51 of Law 23551), are entitled to union stability.

The same benefit is valid for six months for those who apply for a union representation position. Employees with union stability can only be terminated if just cause is invoked and there is prior judicial authorization. If the termination does not meet these conditions, the affected party may sue for reinstatement in their position, plus the salaries paid during the judicial process.

If the reinstatement is decided, the judge may impose fines on the employer who does not comply with the final decision. The employee, except in the case of a non-elected candidate, may choose to consider the labor relationship terminated by virtue of the employer's decision, placing them in a situation of indirect dismissal, in which case they will be entitled to receive, in addition to severance pay, a sum equivalent to the amount of the remunerations that would have corresponded to them during the remaining term of office and the subsequent year of stability. If the employee is a non-elected candidate, they shall be entitled to receive, in addition to the indemnities and the remunerations attributable to the period of stability not yet exhausted, the amount of one more year's remunerations (art. 52 Law 23551).

Regime of the Labor Contract Law

Scope of application The LCL applies to all employees with the exception of:

a) those dependent on the Municipal, Provincial or National Public Administration, except when they are included therein or in the regime of collective bargaining agreements by express act.

b) domestic workers.

c) agricultural workers (article 3 LCL).

There are also special statutes referring to workers in certain activities for which the application of the LCL will be conditioned to the application of its provisions being compatible with the nature and modalities of the activity in question and with the specific legal regime to which it is subject (art. 3 LCL).

Probationary period Employment contracts are typically considered probationary for the first three months, except for seasonal or fixed-term contracts.

During the probationary period, the employer can end the employment without a reason and without paying compensation, but they must give advance notice. The probationary period doesn’t apply if the employer had already hired the worker before using a probationary period. It also doesn’t apply if the employer failed to officially record the employee at the start of their employment. In these situations, the employer is considered to have waived the probationary period (Art. 92 bis LCL). Some specific laws with different rules on probationary periods are discussed below.

Employment contracts term The employment contract shall be understood to be entered into for an indefinite term, unless its term results from the following circumstances:

a) The duration of the term has been expressly fixed in writing.

b) The, reasonably assessed, nature of the tasks or the activity, justifies it.

The formalization of successive fixed-term contracts, which exceeds the requirements set forth in paragraph b) of this article, converts the contract into an indefinite-term contract (article 90 LCL). The burden of proof that the contract is for a fixed term is on the employer (article 92 LCL). The fixed-term employment contract will last until the expiration of the agreed term, and may not be entered into for more than five years (article 93 LCL).

Conversion of a fixed-term contract into an indefinite-term contract The parties must give notice of the termination of the contract more than one month and less than two months prior to the expiration of the agreed term, except in those cases in which the contract is for a fixed term and its duration is less than one month. If the latter fails to do so, it will be understood that it accepts the conversion of the contract to an indefinite term, unless an express act of renewal for a term equal to or different from that originally foreseen, and without prejudice to the provisions of article 90, second part, of this law (art. 94 LCL).

Computation of seniority in employment For all purposes of the law, seniority in employment shall be considered taken into account:

a) the time worked since the beginning of the relationship;

b) that which corresponds to the successive term contracts entered into by the parties;

c) the time of previous service, when the employee, having left the job for any reason, returns to work for the same employer (art. 18 LCL).

d) the notice period when it has been granted (art. 19 LCL).

e) the probationary period (art. 92 bis LCL).

f) the days in which they did not work due to legal or conventional leave, or because they were affected by an incurable illness or work-related accident, or for other causes not attributable to the employee (art. 152 LCL).

g) the period during which the employee does not perform work because they have been called to perform compulsory military service, by ordinary call-up, mobilization or special summons (art. 214 LCL).

h) the period during which the employee does not perform work due to holding elective office at the national, provincial or municipal level (art. 215 LCL).

i) the period during which the employee does not perform tasks due to occupying elective or representative positions in professional associations of workers with union status or in organizations or commissions that require union representation at the national, provincial or municipal level (art. 217 LCL).

j) the period of maternity leave (art. 177 LCL).

Retired worker. Referral Regarding the retired worker who returns to work for the same employer, see art. 253 LCL.

Notice of termination

Concept It is the advance notice given by one of the parties to the employment contract to the other that it is going to terminate the employment contract. It is intended to avoid or, at least, mitigate the damage caused to one of the parties by the untimely termination of the employment contract decided by the other party. The notice can only be withdrawn by mutual agreement and must be in writing. During the notice period, the obligations arising from the employment contract subsist (art. 238 LCL). When the termination is due to a justified cause, neither the obligation to give prior notice nor the obligation to pay the substitutive indemnity apply.

Notice periods In the case of an employment contract for an indefinite term, when the parties do not fix a longer term, notice must be given with the following anticipation:

a) by the employee, fifteen days;

b) by the employer, fifteen days when the employee is in a probationary period; one month when the employee has been employed for a period not exceeding five years and two months when the employee has been employed for more than five years (article 231 LCL).

The terms will run from the day following the day of the notice (art. 233 LCL).

In fixed-term contracts, the parties must give notice of termination of the contract not less than one month nor more than two months prior to the expiration of the agreed term, except in those cases in which the contract is for a fixed term and its duration is less than one month. If the latter fails to do so, it will be understood that it accepts the conversion of the contract as an indefinite term, unless an express act of renewal for a term equal to or different from that originally foreseen (Art. 94 LCL).

Notice and suspension of rendering of services The notice given to the employee while the rendering of services is suspended due to any of the causes entitled to the payment of wages by the employee, will have no effect, unless it has been expressly granted to begin to run from the moment in which the cause of suspension of the rendering of services ceases.Refers to paid leave due to illness, accident, vacation, childbirth, maternity, marriage, death, etc.