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Covid-19

Labor Matters in Times of a Global Crisis – V.3 UPDATED 4/7/2020

Executive Summary

Decrees No. 297/20 – 329/20 – 332/20 and 347/20

Labor Matters

From the events that occurred with the advance of COVID-19 during the month of March of this year, and the legal framework set out below this, it clearly emerges how, in order to protect Public Health, the State gradually ordered measures that promoted a range of waivers to attend work, until finally determining by Decree 297/20 preventive social isolation in general.

As a general principle, the framework of continuity of tasks was established remotely, and for those who could carry out remote work as well as those who did not, the payment of remuneration was established on a regular basis. All this in a framework of contractual good faith. On the other hand, for those workers with essential activities, the possibility of requiring additional hours was arranged, as well as adapting tasks and reorganizing the working-day.

Subsequently, Decree No. 329/20 prohibited dismissals without fair cause, as well as dismissals and suspensions, for reasons of lack or reduction of work and force majeure for the period of SIXTY (60) days counted from March 31, 2020. The situation provided in section 223 bis of the Labor Contract Act was excepted, which establishes, in the event of force majeure or lack or reduction of work, the possibility of agreeing non-remunerative individually or collectively amounts approved by the enforcement authority.

Complementary to the prohibition of all dismissals without cause, as well as dismissals and suspensions based on causes of force majeure or economic crisis, DNU 332/20 was issued creating the Emergency Assistance Program for Work and Production.

This program establishes different benefits to which companies and employees can access to the extent that they meet certain requirements validated by the Program authorities.

All these legal norms and complementary provisions are considered in the following points. Notwithstanding the foregoing, in the current context where the normal development of work activities has been impacted in one way or another, we believe it is important not to rule out the possibility of promoting temporary agreements at different levels of activity and / or individuals, both with staff and with the respective union entities if feasible, observing the special situation of each company, and the impact on its own activity.

1. Regulatory Framework. DNU 297/20 and Complementary Norm.        

Since the advance of COVID-19 and the first measures taken by Executive Branch in our country, various changes began to occur in the daily activities.The successive regulations that were issued gradually expanded and established the isolation of people, causing several impacts on labor relations, and differently in each specific activity.

On March 13, 2020, preventive measures were taken by the Executive Branch (DNU 260/20[i]), establishing 14 days of isolation to any suspected case, for those who had medical confirmation of having contracted COVID-19, for those who had close contact with people from both cases and also those who arrived in the country after having passed through “affected areas” in the previous 14 days.

Likewise, by Resolution of the Ministry of Labor and Social Security No. 202/20 of the same date, the duty of assistance to the workplace, with full remuneration, was established for all the workers who are in the situations described in section 7 of DNU N ° 260 and all others of a similar nature that in the future emanate from the health authority, regardless of the nature of the legal relationship at issue, considering for these purposes also those who provide services continuously under non-dependent figures such as service locations and those that are developed in an analogous way within the private sector, the benefits resulting from scholarships, internships and medical residences. In the case of moonlighting or multiple recipients of services, the effects envisaged in the suspension referred to in this rule will reach the different contracts.

Workers reached by the exemption from the duty of assistance to the workplace who do not have medical confirmation of having contracted COVID-19, or the symptoms described in inc. a) of section 7 of DNU N ° 260, whose habitual or other similar tasks may be carried out from the place of isolation, must, within the framework of contractual good faith, establish with their employer the conditions under which said work will be carried out.

The scope of DNU 260/20 was subsequently extended by Resolution No. 207/20 of the Labor and Social Security Ministry[ii], dated March 16, 20, to all workers over sixty (60) years of age, pregnant workers, and those defined by the national health authority as a risk group, such as those with obstructive respiratory or lung diseases, heart diseases, immunodeficiencies, diabetics, kidney failure, among others. Beyond the exemption from going to work, if the habitual or other similar tasks could be carried out from the place of isolation, within the framework of contractual good faith, they should establish with their employer the conditions in which said work would be carried out.

Finally, as of the issuance of DNU 297/2020[iii] subsequently issued by the Executive Branch on March 19, 2020 and within the framework of the measure of “preventive and compulsory social isolation” from March 20 to 31 inclusive of current year, section 2 established that all workers must refrain from attending their workplaces. The mentioned isolation recognizes exceptions, within the framework of section 6 of the aforementioned decree, in relation to the people affected by the activities and services declared essential in the emergency, and their movements should be limited to the strict compliance with those activities and services.

In all these cases, employers must guarantee hygiene and security conditions established by the MINISTRY OF HEALTH to preserve the health of workers, and workers will have the right to full enjoyment of their usual income, in the terms established by the regulations of the MINISTRY OF WORK, EMPLOYMENT AND SOCIAL SECURITY.

In accordance with Administrative Decision 429/2020[iv], it was decided to incorporate new essential activities and services, and the posting of workers should be limited to strict compliance with the activities and services considered essential.

In line with the mandatory social isolation, Resolution 297/2020[v] of the Ministry of Labor and Social Security of the Nation, provided in its section 1 that workers reached by the “preventive and compulsory social isolation” will be exempt from the duty of assistance to the workplace, but when their tasks or other similar ones can be carried out from the place of isolation, they must within the framework of contractual good faith, establish with their employers the conditions under which said work will be carried out. In this case, they will receive their usual remuneration.

Likewise, workers who provide services in the activities described in section 6 of DNU 297/20 and its regulations, will be considered “essential personnel” in the terms of the Resolution of the MINISTRY OF LABOR, EMPLOYMENT AND SOCIAL SECURITY No. 207 dated March 16, 2020. The continuity of such activities in these circumstances constitutes an exceptional requirement of the national economy (section 203, Labor Contract Act No. 20,744, OT 1976 and its amendments).

Also, according to section 4, the reorganization of the working day is enabled in order to guarantee the continuity of the production of the activities declared essential in adequate health conditions in accordance with the protocols established by the health authority. In this sense, the regulation provides that it will be considered a reasonable exercise of the powers of the employer.

2. Summary of the New Regulatory Framework. DNU 329/20

 On the occasion of the publication of DNU No. 329/2020[vi], the extension of the health emergency provided by DNUNo. 260/20 and its amendment, DNU No. 297/20 was decreed, establishing the measure of “preventive and mandatory social isolation”. Thus, the measure has been extended until April 12, inclusive, as well as the effect of its complementary regulations.

At the same time and by provision of the same DNU No. 329/20, dismissals without fair cause were prohibited, as well as dismissals and suspensions for the reasons of lack or decrease of work and force majeure for the period of sixty (60) days counted from the date of publication of the decree in the Official Gazette, a circumstance that took place on March 31, 2020.

As determined by DNU 329/20, any dismissal or suspension contrary arranged to what has been indicated, will not produce any effect, keeping existing labor relations and their current conditions in force.

Finally, it has been ratified that suspensions made under the terms of section 223 bis of the Labor Contract Act, which enables the payment of cash assignments, as non-remunerative benefits, will not be included within the prohibitions. It is referred to those who are delivered in compensation for suspensions of the labor benefit and that are based on lack or reduction of work causes, not attributable to the employer, or force majeure duly proven. Such suspensions and the designated assignments should be agreed individually or collectively or approved by the enforcement authority. The aforementioned applies when, by virtue of the aforementioned reasons, the worker does not perform the tasks at his expense. These allocations are only taxed the contributions established in Laws No. 23.660 and 23.661.

Likewise, by Resolution No. 279/20 of the Ministry of Labor[vii], Resolution No. 219/20[viii]  of the Ministry itself was repealed, as well as the remaining regulations issued as a consequence of it, and it was ratified that workers reached by the “preventive and mandatory social isolation” will be exempt from the duty of assistance to the workplace, although if their tasks or other similar ones could be carried out from the place of isolation, in this sense, they must, within the framework of contractual good faith, establish with their employer the conditions in which said work will be done.

In relation to workers who provide services in the activities described in section 6 of DNU No. 297/20[ix]  and its regulations, they will continue to be considered “essential personnel” in the terms of the Ministry of Labor, Employment and Social Security Resolution No. 207 of March 16, 2020, taking into account that the continuity of such activities in these circumstances constitutes an exceptional requirement of the national economy (section 203 Labor Contract Act).

Those who provide services continuously under non-dependent figures such as service locations and those that are developed in an analogous way within the private sector, scholarships in workplaces and internships, as well as medical residences and cases of moonlighting or multiple recipients of services, were included within the concept of workers.

In the framework of the provision, the power to reorganize the working day was ratified in order to guarantee the continuity of the production of the activities that were declared essential in adequate health conditions in accordance with the protocols established by the health authority, noting that it will be considered in this sense as a reasonable exercise of the powers of the employer.

At the same time, it was ratified that in the event of necessity of hiring personnel and while the validity of the “preventive and compulsory social isolation” lasts, said hiring should be considered extraordinary and transitory under the terms of section 99 of the Labor Contract Act.

Abstention from attending the workplace -which implies a prohibition to do so except in the exceptional indicated cases- will not constitute a day off, vacation or holiday, but rather a public health decision in the framework of the emergency decreed, in such a so that the remuneration or income corresponding to the days included in the prohibition, supplements or additional legally or conventionally provided for “holidays”, may not be applied, except in those cases in which said prohibition coincides with a legally or contractually foreseen holiday.

It is important to note that, despite the measure being published on April 1st,2020, its validity was determined retrospectively and since Resolution No. 219 came into force (previous and repealed), that is, from March 20, 2020, and it will continue in force while the sanitary emergency imposed in order to protect public health lasts.

Finally, we highlight that by means of Administrative Decision 446/20[x], it was established that only as of April 6, 2020, the instrument to validate the situation of those who fall within any of the exceptions provided for in section 6 of the DNU No. 297/20, its amending and complementary regulations and in Administrative Decision No. 429/20, as well as those established in the future, will be the “Unique Enabling Certificate for Circulation – Emergency COVID-19”, previously approved by Resolution No. 48/20 of the Ministry of the Interior. Likewise, the aforementioned certificate will be valid for the period of social, preventive and mandatory isolation, while on the same date those issued under any other format will lose their validity.

Finally, those workers who may have to move due to force majeure, (section 6, inc. 6, of DNUNo. 297/20), must prove such circumstance, in accordance with the provisions of section 2 of the Resolution of the Ministry of the Interior No. 48/20[xi].

3. Regulatory Framework Summary. DNU 332/20

Through DNU No. 332/20, the Emergency Work and Production Assistance Program was created for employers and workers affected by the health emergency, which consist in obtaining one or more benefits indicated below.

I. Benefits of the Emergency Work Assistance Program:

  1. Postponement or reduction up to NINETY FIVE PERCENT (95%) of the payment of employer contributions to the Argentine Integrated Social Security System.
  2. Compensatory Allocation to the Salary paid by the State for all workers of the private sector included in the collective bargaining regime in the terms of Act No. 14.250 (ordered text 2004) and its modifications, for companies up to ONE HUNDRED (100) workers.
  3. REPRO Health Emergency Assistance, which consist in a non-contributory sum with respect to the Argentine Integrated Social Security System paid by the State for workers under dependent relationships in relation to the private sector, included in the collective bargaining regime under the terms of Act No. 14.250 (ordered text 2004) and its modifications in employers that exceed the HUNDRED (100) workers.
  4. Comprehensive unemployment benefits system: workers who meet the requirements set forth in Acts Nro. 24.013 and 25.371 will receive an economic unemployment benefit in accordance with the considerations stipulated in section 11 of this Decree.

II. Requirements to obtain the benefits of the points 1, 2 and 3. (must meet one or more of them)

  1. Economic activities critically affected in the geographical areas where they take place.
  2. Relevant number of workers infected by COVID-19 or in compulsory isolation or with a work exemption for being included in a risk group or family care obligations related to COVID-19.
  3. Substantial reduction in sales after March 20, 2020.

Considering that the Program attends services and activities affected by isolation, workers who carry out activities and services declared essential in the health emergency and whose personnel were exempt to comply with “preventive and compulsory social isolation”, were excluded from the benefits, in accordance with DNU No. 297/20 and Administrative Decision No. 429/20[xii] and its possible extensions. Also any other employer that does not show specific indications that allow a representative decrease in their level of activity to be inferred, and whose objective criterion, sector and activity, as well as other evaluation elements to determine the award, has been delegated to the Head of Cabinet of Ministers.

  • Postponement of maturities

Those who meet the requirements established in the Decree, will have access to:

  1. Postponement of maturities for the payment of employer contributions to the Argentine Integrated Social Security System.
  2. Reduction of up to NINETY FIVE PERCENT (95%) of employer contributions to the SIPA Regime accrued during the month of April 2020. (maximum cap of workers = 60).

Those employers whose workforce exceeds sixty (60) workers, must promote the Business Crisis Preventive Procedure as established by the regulations of each case.

In the same Decree, AFIP was delegated to establish special maturities for the payment of employer contributions to the Argentine Integrated Social Security System accrued during the months of March and April of the current year, and in turn, facilities for the their payment applicable to employers who will define the regulations to be issued.

  • Asignación Compensatoria al Salario

It will consist of a sum paid by ANSES for all or part of the workers included in the collective bargaining regime in the case of employers of up to ONE HUNDRED (100) workers who meet the requirements indicated above.

The amount of the allocation will be determined according to the following parameters:

Number of Workers % over Gross Salary Maximum Limit
Up to 25 100 100% from MVMS[xiii]
From 26 to 60 100 75% from MVMS
From 61 to 100 100 50% from MVMS

This Salary Compensatory Allocation will be considered as payment of the remuneration of the affected personnel expense, and the employer must pay the remaining balance until completing the salary as remuneration.

When requesting the benefit, the corresponding part to the contributions to the Argentine Integrated Social Security System, social assistance and the contribution to the Comprehensive Health Care Program will be withheld.

In the event that the employer suspends the labor benefit, the amount of the allowance will be reduced by TWENTY-FIVE PERCENT (25%) and it may be considered as part of the non-remunerative benefit defined in the terms of section 223 bis of the Labor Contract Act. No. 20.744 Ordered Text 1976 and its modifications.

  • REPRO Program – Health Emergency Assistance

The Program will grant a non-contributory allocation with respect to the Argentine Integrated Social Security System, to workers through the RePro Program in charge of the Ministry of Labor and Social Security, for companies not included in the Compensatory Allowance who meet the requirements indicated at the beginning.

The benefit per worker will have a minimum of SIX THOUSAND PESOS ($ 6,000) and a maximum of TEN THOUSAND PESOS ($ 10,000). For these purposes, the Application Authority will establish a new differentiated and simplified Productive Recovery Program, keeping in force the one that was previously established. (Resolution No. 25/2018) in everything that is compatible.

Finally, it was determined to raise the unemployment benefit during the period established by the Head of Cabinet of Ministers, to a minimum of SIX THOUSAND PESOS ($ 6,000) and a maximum of TEN THOUSAND PESOS ($ 10,000), delegating to the Ministry of Labor and Security Social the operation for the system. In all cases, the employers reached by the benefits must accredit to AFIP the payroll of the personnel reached and its effect on the activities achieved.

The Ministry of Labor and Social Security will consider the information and documentation sent by the company, being able to reveal additional data that allows expanding and / or verifying those initially provided and requesting the documentation it deems necessary. Likewise, it may arrange to carry out evaluation visits at the establishment’s headquarters, in order to ratify and / or rectify conclusions already taken.

The provisions of DNU 332/20 will be applied with respect to the economic results of the companies that occurred between March 20 and April 30, 2020, inclusive, entering into force on April 1, 2020 and with the authority of the Executive Branch to extend it.

4. Regulatory Framework Summary. DNU 347/20

Through decree 347/20, dated April 6, 2020, the EVALUATION AND MONITORING COMMITTEE OF THE EMERGENCY ASSISTANCE PROGRAM FOR WORK AND PRODUCTION was created.

The aforementioned Committee will be made up of the heads of the MINISTRIES OF PRODUCTIVE DEVELOPMENT, OF THE ECONOMY and OF LABOR, EMPLOYMENT AND SOCIAL SECURITY, and of the FEDERAL ADMINISTRATION OF PUBLIC REVENUE.

The Committee will define the criteria that make it possible to frame the provisions of section 3 of Decree 332/20, where the requirements to access benefits were defined. To this end, the Committee shall have the following functions:

  1. Define, based on technical criteria, the relevant facts that justify the inclusion of the “beneficiaries”
  2. Judging, based on technical criteria and the definitions established in subsection a), regarding the situation of the different economic activities and recommending or advising against their inclusion
  3. Judge, based on technical criteria and the definitions established in subsection a), regarding specific requests that require a special treatment and recommend or advise against their inclusion
  4. Propose to the Chief of the Cabinet of Ministers all the measures he deems conducive in order to achieve greater efficiency in meeting the objectives of the Assistance Program.

Despite the exclusion from the Assistance Program, given special circumstances that would have caused a high negative impact on the development of their activity or service, employers of activities excepted as considered essential, may submit the application to join the Program, and as in all other cases, following the opinion of the ASSESSMENT AND MONITORING COMMITTEE OF THE EMERGENCY ASSISTANCE PROGRAM FOR WORK AND PRODUCTION based on technical criteria, the Chief of the Cabinet of Ministers may accept or deny such requests.

[i] Executive Branch (DNU 260/20 http://servicios.infoleg.gob.ar/infolegInternet/anexos/335000-339999/335423/norma.htm

[ii] Resolution No. 207/20 of Ministry of Labor, dated March 16, 2020  http://servicios.infoleg.gob.ar/infolegInternet/anexos/335000-339999/335541/norma.htm

[iii] DNU No. 297/20 http://servicios.infoleg.gob.ar/infolegInternet/anexos/335000-339999/335741/norma.htm.

[iv] Administrative Decision 429/2020 http://servicios.infoleg.gob.ar/infolegInternet/anexos/335000-339999/335789/norma.htm

[v] Resolution No. 279/20 http://servicios.infoleg.gob.ar/infolegInternet/anexos/335000-339999/335988/norma.htm

[vi] DNU No. 329/20. (http://servicios.infoleg.gob.ar/infolegInternet/anexos/335000-339999/335976/norma.htm)

[vii] Resolution No. 279/20 (http://servicios.infoleg.gob.ar/infolegInternet/anexos/335000-339999/335988/norma.htm)

[viii] Resolution No. 219/20 (http://servicios.infoleg.gob.ar/infolegInternet/anexos/335000-339999/335796/norma.htm)

[ix] DNU No. 297/20 (http://servicios.infoleg.gob.ar/infolegInternet/anexos/335000-339999/335741/norma.htm)

[x] Administrative Decision No. 446/20 (http://servicios.infoleg.gob.ar/infolegInternet/anexos/335000-339999/335981/norma.htm)

[xi] Resolution No. 48/20 (http://servicios.infoleg.gob.ar/infolegInternet/anexos/335000-339999/335940/norma.htm)

[xii] AD 429/20, http://servicios.infoleg.gob.ar/infolegInternet/anexos/335000-339999/335789/norma.htm

[xiii] MVMS (Minimum, Vital and Mobile Salary in force $ 16.875)