Argentina's top union sues to halt President Milei's sweeping labor overhaul

BUENOS AIRES, Argentina — Argentina’s largest trade union group on Monday filed a lawsuit to block a sweeping labor reform promoted by President Javier Milei and aimed at radically altering labor relations in the South American country.

The reform, which was approved Friday by Congress, grants employers greater flexibility in matters of hiring, firing, severance and collective bargaining and seeks to limit the historical power of unions.

“This law represents a serious infringement of collective and individual rights that expressly violate constitutional principles,” the General Confederation of Labor, CGT, said in a statement after its lawyers filed the complaint in the courts of Buenos Aires.

The complaint challenges the reform’s constitutionality, arguing it violates both the “principle of progressivity,” which prevents the reversal of labor rights, and the “protective principle,” a legal standard aimed at preventing employer abuses and restoring balance to the workplace.

“The damages are not collateral effects of an isolated decision, but are consistent with the national government’s economic and social program,” the CGT said, warning that over 300,000 jobs have been lost since Milei took office in late 2023 with a mandate for austerity and deep economic reform.

Milei called the overhaul "historic" on Friday after its approval. "We have a labor modernization,” he said.

The legislative process has been fraught with tension between the governing party and the opposition. The friction boiled over last month during the bill’s debate in the lower house of Congress, as the GCT launched a 24-hour nationwide strike, while demonstrators from various leftist groups clashed with police outside Congress.

Milei considers the changes to Argentina’s half-century-old labor code crucial to his efforts to lure foreign investment, increase productivity and boost job creation in a country where about two in five workers are employed off the books.

Unions argue that the law will weaken the workers’ protections that have defined Argentina since the rise of Peronism, the country’s dominant populist political movement, in the 1940s.

The courts must now decide whether to admit or dismiss the CGT’s filing, a decision that could result in an injunction suspending the reform until judges issue a final ruling.