Argentina’s Senate has formally approved a far-reaching overhaul of the country’s labor laws, delivering a major political victory to President Javier Milei and firmly advancing his libertarian, pro-market agenda despite widespread public opposition and violent protests. Lawmakers on Friday voted 42 to 28, with two abstentions, to enact the so-called labor modernisation law, which alters decades-old protections and regulations that have shaped employment relations in Argentina for generations. The passage of the bill marks one of Milei’s most significant legislative achievements since taking office in December 2023 and cements his control of Congress as he pushes through a broader economic transformation.
The new labor legislation introduces sweeping changes to how work is regulated across Argentina, where roughly 40 percent of workers remain in the informal economy. Among the most contentious elements are provisions that allow employers to extend the maximum workday from eight to 12 hours, relax hiring and firing regulations, and significantly reduce the cost of dismissals by calculating severance pay using a simplified formula that excludes bonuses and other extra income. Employers will contribute to a newly established severance fund, and unions will see their influence over collective bargaining agreements diminished by provisions that encourage negotiation at the company level instead of nationwide sectoral arrangements. The legislation also lowers employer taxes and alters vacation and overtime rules, including the possibility of compensating overtime with time off rather than additional pay.
Milei’s government has staunchly defended the reforms as necessary to revive formal employment, reduce labor costs, and attract investment to an economy that has long grappled with high inflation, weak growth, and deep structural problems. Supporters argue that rigid labor protections have discouraged companies from hiring formally and have contributed to persistent informality and unemployment. The administration points to data showing inflation has cooled and the currency has stabilised under its economic policies, and it presents the reform as a cornerstone of broader efforts to modernise Argentina’s economy.
However, critics from labour unions, opposition parties, and civil society groups have vehemently condemned the law as a rollback of hard-won worker rights that undermines constitutional protections. The General Confederation of Labour (CGT), Argentina’s largest union federation, described the reform as an attack on workers and pledged legal challenges to block its implementation. Mass protests erupted in Buenos Aires and other cities during the legislative process, with demonstrators clashing with police outside Congress in some instances, leading to arrests and the use of water cannons and rubber bullets to disperse crowds. Workers and union leaders argue that the reforms will make it easier for companies to fire staff, erode collective bargaining power, and weaken the right to strike, particularly in sectors now classified as essential where minimum operations must be maintained.
The passage of the labor reform has exposed deep divisions within Argentine society. Opinion polls cited in recent reports indicate that the public remains split over the changes, with nearly equal shares expressing support or opposition. Small business owners and industry representatives have welcomed the prospect of fewer labour lawsuits and more flexibility in hiring, but economists aligned with concerns from unions note that legislation alone may do little to boost employment without underlying economic growth. Opposition figures have also pointed to job losses and business closures that have occurred since Milei took office as evidence that structural challenges run deeper than labour regulations.
As the new law begins to take effect, both sides of the political spectrum are preparing for ongoing battles. Unions have planned further protests and court actions, while the government is expected to highlight the reform as a key achievement in its upcoming congressional address. The outcome of these disputes will likely influence Argentina’s social and political landscape in the months ahead, as the nation grapples with balancing economic liberalisation with protections for workers in one of Latin America’s most turbulent labour markets.
