Companies extending their operations into Argentina need a complete grasp of Argentinian employment contracts. A critical decision for international companies intending to expand into Argentina is which business structure best suits their plans. The typical and most popular choice is to open a limited liability company as a subsidiary, which in Argentina is a Sociedad de Responsabilidad Limitada, SRL, and needs two or more members or partners. The General Companies Act will regulate the subsidiary.
The company’s employment relationship with its employees will be governed by the Argentinian Employment Contracts Law, which, despite its name, covers far more than simply contracts and spells out compliance regulations with virtually every aspect of Argentina’s employment legislation. This is mandatory for foreign companies operating payroll for their staff to comply with rules of the Federal Administration of Public Revenues, the Administración Federal de Ingresos Públicos (AFIP) and the National Administration of Social Security (Nacional de la Seguridad Social, ANSES). These are significant issues to be dealt with during hiring, onboarding and drawing up contracts with new staff.
Once Bradford Jacobs’ Professional Employer Organisation (PEO) recruitment networks have located the best talent for your company, we step in to steer you through this crucial element of recruitment.
The Argentinian Employment Contracts law has no mandatory requirements to conclude employment contracts in a specific form, and full-time permanent contracts can be oral or written. Other rules apply to fixed-term contracts.
Open-ended, indefinite, full-time employment contracts: These are the norm. It is advisable to conclude written contracts, but as all aspects of employment are covered by the Employment Contracts Law, they are often considered unnecessary. However, the employment relationship must be entered into the Special Payroll Book, which is liable for inspection by the Ministry of Labor.
Fixed-term employment contracts: A written contract is mandatory, and they are allowed only if there is an unavoidable need. The contract must stipulate the length and the end date. Otherwise, it is deemed open-ended. The contract, including renewals, cannot exceed five years and must not include a probationary period. If the employment exceeds one year, dismissal without cause entitles the employee to 50% of the standard severance settlement. Employers are generally expected to give the employee at least one month’s notification before the end of the fixed term.
Temporary employment contracts apply to completing a specific task rather than a time frame, as is the case with the fixed-term contract.
Part-time employment contracts: Where employees work no more than two-thirds of the hours in a typical working week, they can be on a part-time contract. If the employer requires them to exceed the limit, they must be paid the same as a full-time employee.
Probation Periods: Trial periods cannot exceed three months and cannot be applied to fixed-term contracts. As long as 15 days’ notice is given, the trial can be ended without severance or compensation for the probationer. When the trial is completed successfully, the employee must be offered permanent employment.
Collective Bargaining Agreements (CBAs): Under the Law on Trade Unions, workers have the right to set up trade unions without authorization and hold meetings; they have the right to join or not join unions as they wish. Additionally, the Law on Collective Agreements states that agreements can be concluded by individual companies, employers’ organizations, by sector, regionally or nationally. It is estimated more than 60% of workers in the formal employment market are covered by CBAs, although managerial staff are usually excluded. To negotiate an agreement, employers’ associations must be recognized by the Ministry of Labor.
General considerations include:
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