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Justice in Argentina suspends President Javier Milei’s labor reform, but the government appeals and doubts about its validity grow

In Argentina, an appeals court suspended the labor reform contained in President Javier Milei’s decree of necessity and urgency (DNU) No. 70/2023. While the government prepares to appeal the decision, the execution of measures related to the labor aspect included in the decree is temporarily halted.

The Labor Appeals Chamber considered that “the ‘necessity’ of adopting so many measures would not be objectively evident,” according to the document signed by two judges of the Chamber, José Alejandro Sudera and Andrea García Vior. A third magistrate, María Dora González, dissented, stating that the court does not have jurisdiction, and the case should be transferred to the administrative litigation court.

The ruling states that there are no reasons alleged that constitute an urgency “to avoid the proper intervention of the Legislative Power regarding substantive legislation.” The tribunal cited the Constitution emphatically: “The National Constitution does not allow choosing discretionary between passing a law or imposing certain material contents more quickly through a decree.”

Now, what does the labor chapter of DNU 70/2023, currently suspended by the justice, establish? Regarding this, there are two main issues that have generated controversy:

  • 8-month probation period The DNU extends the probationary period in an indefinite-term employment contract from 3 to 8 months, stating that “it will be considered probationary during the first 8 months of validity.” Additionally, the decree states that “either party may terminate the relationship during that period, without cause and without the right to compensation.”

Labor lawyer Alexander Rodríguez sees this point of the decree as a solution that “should be positive, as it encourages the entry of workers.” According to him, “companies do not hire personnel justifying that labor law is too demanding. So, instead of facilitating the entry of workers, their exit is facilitated. If the probation period is extended, there would be no fines for undeclared work or withheld contributions. Therefore, if you want more staff, you should facilitate entry, not exit.”

In contrast, labor lawyer Leandro Recalde argues that “the probationary period is a time granted to the employer to assess the suitability of the employee and gives them the possibility to terminate the employment relationship once that period is over, without the possibility of paying compensation.” Recalde asks, “How much time is really necessary to assess the employee’s suitability? What they are trying to do with this decree is distort that probationary period to eliminate or degrade the compensatory institute.”

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  • Severance pay Milei’s DNU states: “In cases of dismissal without just cause by the employer, with or without prior notice, and after the probationary period has elapsed, the employer must pay the worker severance pay equivalent to one month’s salary for each year of service or fraction exceeding 3 months, taking as a basis for calculation the best monthly, normal, and habitual remuneration earned during the last year or during the time of service if less.”

In this regard, Recalde considers that the basic objective of the DNU is to “lower the amount of severance pay.” In this aspect, he emphasized: “The DNU reduces the compensation by attacking how the remuneration or the calculation base for compensation is calculated. That is, if the Labor Contract Law took the best monthly, normal, and habitual remuneration, the DNU excludes the Christmas bonus, semi-annual and annual bonuses, and, in the case of variable remuneration, the best remuneration is not taken, but an average.”

Labor Secretary Omar Yasin declared weeks ago on the news channel La Nación + (LN+) that the DNU “is truly an instrument to generate employment” and that “it does not reduce any worker’s rights.” Regarding severance pay, Yasin argued that the DNU includes “an objective cause for dismissal, which is participating in a block against an employer, causing damage to the employer, the company, or third parties, and, fundamentally, preventing a worker from going to his workplace and not adhering to the strike.”

A topic that has generated controversies and disagreements among different representatives of labor law has to do with the unemployment fund. In statements to LN+, Yasin stated that “another positive aspect of the DNU is the possibility of creating an unemployment fund or termination fund.” As the head of the Labor Secretary established, the termination fund is created by collective agreement. The worker will turn to that fund if dismissed to immediately collect compensation without delay.

“The most serious thing that the decree provides is the possibility that through collective bargaining, unions and business chambers can repeal the compensation system and create series funds that do not adequately protect against dismissal,” argues Recalde. From another perspective, labor lawyer Alexander Rossi maintains that the indemnity resolution by collective agreement “does not make sense” because each business and union sector will have its own agreement.

Yasin also stated that the new DNU generates compensation for discriminatory dismissal, considering sexual, ethnic, or religious orientation. In this regard, the head of the Labor Secretary argued that, in these cases, compensations increase by 50% or 100%, according to judges.

Hours after the news of the suspension of the labor reform included in the DNU became known, it was reported that the State would appeal the precautionary measure. According to a source from the Ministry of Justice of the Nation, the presentation was being prepared by the Treasury Solicitor’s Office of the Nation, led by Rodolfo Barra, a former judge of the Supreme Court. In this regard, the Ministry argues: “They are ignoring the criterion adopted by all other courts in the country, both in the city and in the interior, which sent the case to the natural and universal judge.”

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Barra said this Wednesday in an interview on Radio con vos that “the National Labor Appeals Chamber has a bias identified with some sectors that could have been affected by the DNU, which acted outside its jurisdiction.” The Treasury Solicitor anticipated that they will take the discussion first “in the administrative litigation court,” and if they are not successful, they will go to the Supreme Court.

Now, is the precautionary measure annulled with the appeal? For labor law specialist Jorge Fontán, the State required a “reconsideration appeal” for the same appeals chamber to review the precautionary measure. In this way, Fontán explained, “After the review, that appeal goes to the Supreme Court.” The Supreme Court will deal with all precautionary measures, but when the judicial recess or vacation, during which judicial activities cease between January 1 and 31 in Argentina, ends. In fact, the court that granted the precautionary measure is a holiday court. So, as Fontán said, the Supreme Court will deal with all precautionary measures when the judicial recess ends. In this way, given that the precautionary measure does not have a suspensive effect, it remains in force according to Fontán.

For labor lawyer Alexander Rodríguez, there are two scenarios: on the one hand, the decree remains suspended until the Supreme Court says otherwise. On the other hand, “A direct presentation of the Executive Power to the Supreme Court is possible, to immediately resolve the issue due to institutional gravity.”

International

Noboa once again entrusts the Vice President of Ecuador to the vice president he appointed by decree

The President of Ecuador, Daniel Noboa, returned this Thursday to delegate – for the second time – the Presidency to the Secretary of Public Administration and Cabinet of the Presidency Cynthia Gellibert, whom he himself appointed by decree vice president in charge, in the face of the open confrontation he maintains with the vice president, Verónica Abad.

As he did last week, Noboa again issued a decree in which he announces that he is absent from the Presidency from Thursday to Sunday, to make an electoral campaign in search of his re-election in the elections of February 9, and during that period of time it will be Gellibert who will be in charge of the head of the State.

This action of the president of Ecuador is a matter of evaluation by the ordinary and constitutional justice at the request of the vice president, Verónica Abad, who claims to assume the presidential functions during the full period of the electoral campaign, in which according to the Constitution the head of state must ask for leave for being a candidate for re-election.

In his decree, Noboa argues that, although the Constitution determines that the Vice Presidency must assume the head of State in the event of the absence of the president, this “is not limited to the elected vice-president, but to the person who to date is exercising the functions of the Vice Presidency.”

Before appointing Gellibert as vice president in charge by decree, Noboa sent Abad to the Ecuadorian Embassy in Turkey, after a judge annulled the five-month suspension that the same Government had imposed on him. Until now, the vice president remains in Ecuador to claim to be the one who temporarily assumes the Presidency.

The new period of Gellibert with presidential powers began at 18:00 local time (23:00 GMT) this Thursday and is scheduled to end at 22:00 (03:00 GMT) next Sunday, time at which the debate between presidential candidates is expected to end where Noboa is summoned to participate.

After the debate, Noboa plans to travel to Washington to attend Donald Trump’s presidential inauguration, according to the Ecuadorian Presidency.

After the first assignment of the Presidency to Gellibert, Abad denounced a “coup d’état” and urged the Organization of American States (OAS) to apply the Democratic Charter, considering that the constitutional order had been broken because it had not received the presidential powers, as contemplated in the Ecuadorian Constitution.

In addition, he filed a protection action with which he seeks that the Justice annul the decrees in which Noboa appointed Gellibert as vice president in charge and delegated the Presidency to him. A court admitted the appeal on Friday, but did not accept some precautionary measures that Abad also asked for to suspend those effects immediately.

Controversies like this will be part of the analysis and evaluation of the electoral observation mission (EOM) of the European Union (EU) for the Ecuadorian elections, as anticipated on Wednesday by its leader, Spanish MEP Gabriel Mato.

The confrontation between Noboa and Abad began in the electoral campaign for the second round of elections for the extraordinary elections of 2023, and was reflected when he assumed the charges, when in one of his first decisions, the president sent the vice president to Israel as ambassador, with the mission of seeking peace between Israelis and Palestinians.

Abad has denounced Noboa for alleged political gender violence and has accused her of leading a harassment against her to force her to resign and thus avoid having to delegate the Presidency to her during the electoral campaign period, which runs from January 5 to February 6.

The titular vice president has also accused the Government of being behind the corruption investigation in the offices of the Vice Presidency that involves her son in a case where the Prosecutor’s Office also sought to indict Abad, but the National Assembly (Parliament) voted mostly against lifting the jurisdiction, although the ruling party voted in favor.

The general elections in Ecuador are called for Sunday, February 9 and, according to the polls published so far, Noboa and the candidate of the correismo Luisa González appear as prominent favorites to move on to the second round.

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International

Musk’s Starship was lost after a smooth takeoff

The second stage of the Starship spacecraft, the largest and most powerful rocket in the world, was lost this Thursday after a smooth takeoff from the SpaceX base in Boca Chica, in southern Texas (USA), on the border with Mexico.

Before confirming the news, the company of technology tycoon Elon Musk pointed out during the live broadcast that it had lost contact with the rocket, which was supposed to dwell in the Indian Ocean.

However, the takeoff itself had no problems, and even the first stage, the Super Heavy, managed to return to land, to the base, and be caught by the clamps in a spectacular way, for the second time.

“The Starship spacecraft suffered a rapid and unforeseen dismantling during its ascent. The teams will continue to review the data from today’s flight test to better understand the root cause,” SpaceX said on the social network X.

He added that in a test like this, “success depends on what we learn, and today’s flight will help us improve the reliability of the Starship spacecraft.”

The rocket had been improved for this seventh test flight and the part that was lost was carrying cargo into space for the first time, in this case a dozen replicas of Starlink internet satellites.

The lost spacecraft was to fly in a suborbital trajectory for about an hour, after which it planned to land in the Indian Ocean, as in the last tests.

In these initial test flights, the idea is not to reach orbit but to go around the planet and descend by the tail ahead and propelled by rockets in the Indian Ocean.

The SpaceX company signed up for a new success on Thursday with the launch of the seventh test flight of the Starship, the largest and most powerful rocket in the world, which this time was improved, took cargo into space for the first time and also managed to catch the propeller on the ground for the second time on its return to the base in Texas.

The rocket had taken off today at 16:37 local time (22:37 GMT) powered by the Super Heavy as planned after several delays due to unfavorable weather conditions.

SpaceX proposed in this new Starship test to launch a ship with significant improvements, and attempt the first payload deployment test, the Starlink.

He also wanted to fly multiple reentry experiments aimed at capturing and reusing ships, and launching and returning the Super Heavy thruster to the base in Texas, as he succeeded.

As in the most recent test flights, the first stage propelled the upper one out of the dense lower atmosphere before returning in a controlled manner.

Remains of the Starship ship, the largest and most powerful rocket in the world, passed through the north of the Dominican Republic, according to electronic news pages from the United States and according to images spread on social networks.

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International

Mark Carney announces his candidacy to replace Trudeau as Prime Minister of Canada

Former Bank of Canada governor (2008-2013) Mark Carney announced on Thursday that he will present his candidacy to lead the Liberal Party and become the country’s prime minister.

Carney, 59, who was also governor of the Bank of England (2013-2020), is the first of the main candidates to publicly communicate his desire to replace Justin Trudeau, who announced his resignation in December.

In a speech in the city of Edmonton, in the west of the country, he acknowledged that “the system is not working as it should” and that many people do not find affordable housing or a family doctor.

With a centrist and nationalist language, Carney declared that “these are normal times for us” and warned that “in just four days Donald Trump will become the 47th president (of the United States), a man who threatens his closest and most faithful allies, including Canada, with economic strength.”

In this sense, he explained that he wants to be the leader of the Liberal Party and Canadian Prime Minister because Canada faces “unprecedented challenges.”

Carney also referred to the leader of the Conservative Party, Pierre Poilievre, whom polls point so far as the winner of the next general elections, and criticized that he is worried “looking for the support of Donald Trump and Elon Musk.”

“Sending Poilievre to negotiate with Trump is the worst possible idea,” he added.

The former governor of the Bank of Canada recalled the seven years he spent at the head of the Bank of England: “In the United Kingdom I saw from the front row what happened there after years in which the conservatives shouted that the country was broken.”

“Conservatives don’t shout that Canada is broken because they want to fix it, what they want is permission to destroy it,” he said.
Carney concluded by pointing out that he will win the next elections to “build a strong economy for all and to defend Canada against Trump.”

The Liberal Party will reveal on March 9 the name of Trudeau’s substitute, who on December 16 announced that he will resign when the political formation chooses his substitute.

Chrystia Freeland, until December vice prime minister of the country, is expected to announce her candidacy next week, which will make her Carney’s main rival.

The opposition parties, which have a majority in Parliament, have already announced that as soon as the sessions of Parliament resume on March 24, they will present a motion of censure to hold early elections.

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