Employment Contracts in Argentina

1. Minimum Requirements

The LCL (Labour Contract Law No. 20,744) sets that there is an employment contract, whatever the form or denomination parties have given, as long as an individual performs acts, works, or renders services in favor of another person and under his authority, for a specified or indefinite period of time, and receives as consideration the payment of an amount of money (compensation).

The contract features are subject to the public order provisions, CBAs, statutes and customs and habits. This means that they cannot be altered in a contrary way to the provisions previously mentioned. The only way in which they can be altered is if they are more beneficial to the employee.

In Argentina, the employment contract exists by mere consent of the parties and does not require a particular form to be executed. However, there are some exceptions such as fixed-term relationships, internships or temporary labor relationships, which require the contracts to be in writing.

To enter into an employment contract, the employee must have a minimum age of sixteen (16) years.

One of the bases of local labor regulation is the principle of continuity of the labor relationship, according to which employment contracts are for an indefinite period of time, unless the parties expressly stipulate that the contract is for a fixed-term.

2. Fixed-term/Open-ended Contracts

Fixed term contracts require the accomplishment of the following requirements: i) it has to be in writing, ii) a term not exceeding five (5) years must be agreed between the parties, and iii) the extraordinary cause that justifies the execution of this type of contract has to be expressed. This kind of contract has no trial period.

Continuous use of fixed-term contracts or in excess of legal requirements will automatically convert it into a permanent labour contract. There is also a maximum five (5) year term for these types of contracts, but only if the above-mentioned requirements are duly complied with.

The advanced notice of termination is a very important item in a fixed-term contract. The omission in giving such advanced notice cannot be replaced by any compensation and will convert the contract into a permanent one. Advanced notice must be given no less than one (1) month and not over two (2) months. The only exception is the fixed term contract whose duration is less than one (1) month, in which no notice is required.

3. Trial Period

In Argentina, the trial period is of three (3) months and is subject to the following rules:

  1. An employer cannot hire the same worker, more than once, using the trial period
  2. The employer must duly register the worker who begins his employment for the trial period.
  3. The parties have the rights and obligations inherent to the employment relationship, including employee’s union rights.
  4. The parties are obliged to contribute to the Social Security System.
  5. The employee has the right, during the trial period, to benefit from the leave of absence regime applicable to special situations and sick leaves provided by law. Also, laws regulating work related accidents apply.
  6. The trial period is considered as time of service for all purposes.

During the trial period, any party has the right to terminate the employment relationship with no expression of cause and no severance compensation is due provided prior notice of fifteen (15) days is granted. If such prior notice is not granted, the employer will have to pay an amount of money in lieu of prior notice, equal to fifteen (15) days of work.

4. Notice Period

The LCL provides that the employer must give a prior written notice to the employee in the event of a wrongful termination of employment. The employer must give such notice within fifteen (15) days if the labour contract is under the trial period; and with one (1) or two (2) months’ anticipation depending on the employee’s seniority – more or less than five (5) years.

If the employer does not give such prior notice, it must pay an indemnification in lieu of notice equivalent to one (1) or two (2) monthly salaries, depending on the same parameters.

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