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End of employment in Argentina

As in many countries, there are specific rules in Argentina that govern the end of the employment relationship. For example, employers can dismiss employees with or without cause but must pay severance pay to dismiss an employee without a valid justification. Employees can also choose to resign from their positions, and there are set notice periods that apply in either case.

In this section, we’ll take you through everything you need to know about the end of the employment relationship in Argentina. We’ll cover notice periods for both employers and employees, different forms of dismissal, and the post-termination restrictions you can impose on your employees. We’ll also discuss the rules concerning what happens to employees after a transfer of undertaking.

Notice periods in Argentina

Both employers and employees in Argentina must give the appropriate notice to end their employment agreement. Notice periods are defined by Argentine labour law.

Notice periods for employers in Argentina

Notice periods for employers in Argentina depend on how long the employee has been employed, as follows:

  • Less than five years of employment: One month.
  • More than five years of employment: Two months.

During the probationary period, the notice period is 15 days. Probationary periods can last for a maximum of six months.

Notice periods for employees in Argentina

Employees in Argentina only have to give their employer 15 days’ notice to resign from their position. This is the case for all employees, regardless of their seniority or length of service.

Severance pay in Argentina

Employees who are dismissed without reasonable cause in Argentina are entitled to statutory sewerage pay of one month’s pay for each year of service or period of at least three months. This is calculated based on the employee’s highest monthly regular compensation over the last 12 months of work.

Termination of employment in Argentina

Employers in Argentina can terminate employees’ contracts at any time. However, if they don’t have a justified reason for termination, they must pay severance pay based on the employee’s salary and length of service.

Employees who are dismissed during the trial period are not eligible for severance pay. Union delegates have special protection and can’t be dismissed during their term and for one year afterwards. Dismissing employees who are pregnant, sick, or married carries additional severance compensation.

Termination with cause in Argentina

Employers don’t have to pay severance pay if they terminate an employee with cause in Argentina. Labour laws do not list specific valid justifications for termination, and breaches should be assessed on a case-by-case basis. As a general rule, employers can dismiss employees with just cause if the employee has failed to fulfil their obligations in a way that makes the continuation of the employment relationship impossible.

Employee-led termination in Argentina

Employees in Argentina can choose to end their employment contracts by giving their employer 15 days’ notice. There is no severance pay in this case. If an employee resigns due to a breach by the employer, this may be considered as dismissal without cause by a labour court.

Collective dismissals in Argentina

Special rules apply to collective dismissal in Argentina. If a company wants to dismiss a certain number of employees, it must first go through a mandatory conciliation procedure before the Ministry of Labour. The number of employees that constitute a collective dismissal is different depending on the size of the company, as follows:

  • Less than 400 employees: More than 15% of total payroll.
  • 400–100 employees: More than 10% of total payroll.
  • More than 1000 employees: More than 5% of total payroll.

Wrongful termination in Argentina

If an employee in Argentina believes that they have been wrongfully terminated, they can challenge the dismissal before a labour court, claiming for payment of severance pay plus interest and legal fees. The burden of proving the cause of the dismissal is on the employer.

Post-termination restraints in Argentina

Post-termination restraints are restrictions that an employer puts on its employees’ actions following the end of the employment contract. These are generally only possible if they are intended to protect the legitimate interests of the business.

Possible restrictive covenants in Argentina

The following types of post-termination restraints (or restrictive covenants) are possible in Argentina:

  • Non-compete agreements: These prevent employees from setting up or working for businesses that compete with their former employer.
  • Customer and service provider non-solicitation agreements: These prevent employees from poaching customers and service providers from their former employer.
  • Employee non-solicitation agreements: Similarly, these prevent employees from poaching employees from their former employer.

Restrictions on post-termination restraints in Argentina

There are certain rules that apply to post-termination restraints in Argentina. First, the employee must be compensated during the restriction period. The amount they receive must be fair and reasonable given their former salary and position and the extent of the restrictions.

There is no specific limit on the duration of restrictive covenants in Argentina, but they typically last between two and five years. In certain circumstances, courts have enforced restrictions lasting up to 10 years based on the business and the amount paid to the employee.

If an employee is in breach of an agreement, the employer may file a claim against them requesting compensation for damages. The court may require the employee to stop the violation immediately. Alternatively, a court may declare an agreement null and void if its terms are too broad.

Waivers in Argentina

In Argentina, any agreement that waives rights granted by labour laws is null and void. However, employers and employees can sign settlement agreements to terminate a contract while preventing employees from bringing a future claim against the company. Such an agreement is only valid if it is approved by the Ministry of Labour.

A settlement agreement that does not meet this condition does not prevent an employee from bringing a future claim, even if they received a settlement. In this case, the settlement amount would be taken on account of and deducted from any eventual ruling against the company.

Transfer of undertakings in Argentina

A transfer of undertakings is when one business is wholly or partially acquired by another. In this situation, there are specific rules that apply to the employees of the company being transferred.

Employee rights after a transfer of undertakings in Argentina

When an entity is transferred in Argentina, all obligations arising from the employment contracts in place are taken on by the transferee. Transferred employees retain their seniority and the rights arising from their contracts.

Employees who don’t want to be transferred can instead choose to terminate their contracts with the right to compensation. The transferer and transferee are jointly liable for any dismissals arising due to the transfer.

Consultation and information rights for employees before a transfer of undertakings

Before a business transfer can take place, employers are required to conduct internal consultations and collective consultations with trade unions. Neither the transferer nor the transferee are legally required to inform or consult with employees.

Avoid risk and missed opportunities with our end-to-end employment solutions

There are many different ways an employment contract can come to an end. But whatever the situation, you need to understand the rules that cover the end of employment in Argentina — or you could end up facing legal issues.

Our solutions ensure your business is protected from risk when a relationship with a worker comes to an end — whatever the reason. We can also help you to avoid missed opportunities by re-deploying talent where possible

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