Procedures For Terminating the Agreement
Labour Contract Law lists the different grounds on which an employment contract can be terminated e.g., fair dismissal, employee’s resignation, employer’s bankruptcy, etc. The law provides various rules which are applicable in each case.
In the event that the employee is responsible for gross misconduct, the employer is entitled to dismiss him instantly without any severance pay.
The employee’s resignation is only effective if notice of the employee’s intention to resign is communicated to the employer by means of a registered telegram or the employee notifies an administrative authority.
Termination On Notice
The employee may terminate an agreement by giving the employer 15 days advance notice. In order for the employer to terminate the contract by notice, the employer has to give the employee one month or two months advance notice, depending on the employee’s seniority and date the employee started at the company. The party that fails to provide the due notice within the required minimum period must compensate the other party.
Termination By Reason Of The Employee's Age
Argentinean legislation sets an age for retirement. That is 70 years old.
Automatic Termination In Cases Of Force Majeure
There is a crisis procedure that must be followed before suspending or dismissing employees due to force majeure.
Dismissals, reductions of working hours or suspensions both for reasons of force majeure and for economic reasons; or lack or reduction of work in accordance with the provisions of Section 247 of the Employment Contract Law that affect more than 15% of the total payroll in companies with less than 400 employees, the 10% of the total payroll in companies with more than 400 and less than 1000 employees and 5% in companies with more than 1000 employees must be carried out through a special Crisis Preventive Procedure in accordance to Section 98 of Act No. 24.013.
Termination By Parties’ Agreement
The parties are entirely free to agree termination on any grounds they desire. Where the parties agree to terminate the employment, the agreement should be in writing and placed before the Labour Ministry or a Notary Public. The employee has to be present in the agreement.
Directors Or Other Senior Officers
If the directors or senior officers are employees, they are subject to the same rules as everyone else.
Special Rules For Categories Of Employee
Trade unions delegates are subject to special employment rules. In addition, there are some situations in which an employee is entitled to a higher compensation (e.g. fair dismissal during pregnancy, illness, etc.) Trade Union delegates are protected from dismissal for one year from the date of appointment.
Specific Rules For Companies in Financial Difficulties
The contract of employment may be terminated due to lack of or decrease in the workload, for which the employer is not liable. The employer must pay the employee a reduced compensation, previously the company has to initiate a procedure before the Labour Ministry named “Procedure for Companies in crisis”.
In the event of the employer’s reorganization proceeding (Chapter 11), the collective bargaining agreement will cease to be in effect for three years or until the date on which the reorganization plan is fully performed, whichever is shorter.
Restricting Future Activities
An employer can restrict the future activities of employees unless the restriction injures an employee’s rights.
There are no specific or special whistleblower laws in Contract Law N° 20.744.
Special Rules For Garden Leave
There are no specific or special rules for garden leave.
A severance payment is calculated according to the employee’s seniority (a monthly salary per year worked or a period over 3 months). Also, the company has to pay advance notice (calculated on the same basis as the severance payment with a limit of two monthly salaries), unpaid holidays and a proportional 13th of the employee’s salary.
Special Tax Provisions And Severance Payments
Severance payments are not within the scope of social security contributions (i.e. retirement funds, etc). Furthermore, if the severance payment is calculated and paid in accordance with the Labour Contract Law, income tax is not levied upon it. However, if the parties agree on a higher compensation than the employee is entitled to under the Labour Contract Law, income tax is levied on that part of the compensation which is beyond the scope of the law.
Allowances Payable To Employees After Termination
Employers are not under a mandatory obligation to pay an allowance to employees at termination but in some situations parties can agree some type of allowance.
Time Limits For Claims Following Termination
The time limit for presenting a claim following termination in the Court is two years.