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Argentine Courts Escalate Pushback, Striking Down Labor Reform’s Article 55

Judges argue the BCRA-based cap-and-floor scheme undercuts real payouts, breaching constitutional labor protections.

Overview

  • Sala I of the National Labor Appeals Court declared Article 55 unconstitutional and ordered updates by the general formula tied to CPI plus 3% annual interest, while upholding a case of constructive dismissal over unpaid wages.
  • Tribunal del Trabajo Nº 4 de La Plata issued a March 16 ruling against Article 55, finding the new method would sharply reduce judicially claimed credits and directing the CPI plus 3% update instead.
  • In illustrating the impact, the La Plata court estimated a claim would total about ARS 127 million under CPI plus 3%, versus ARS 50.9 million with the passive BCRA rate or ARS 84.2 million using the article’s minimum.
  • A separate first-instance ruling from Tribunal del Trabajo Nº 3 de La Plata also struck down Article 55 and ordered employers to pay more than ARS 12.8 million within ten days using the prior updating mechanism.
  • The contested provision applies a passive BCRA rate with a floor equal to 67% of CPI plus 3% and a cap of inflation plus 3%, a retroactive reach to pending suits that multiple courts rejected as improper.