Employment Tax

Argentina | Argentine courts revive enhanced breach indemnities amid push to shift to tort‑based labor claims

Summary

Argentina’s repeal of certain labor penalties has led to a shift toward civil liability claims for employer misconduct, with courts starting to accept this approach.

The detail

Following the repeal of aggravated indemnities by Decree 70/2023 and Law 27,742, Argentine courts and scholars are exploring civil liability mechanisms under the Civil and Commercial Code to claim damages for employer misconduct, such as improper registration or non-payment of severance. Early case law supports this shift, but claimants must now prove harm and causality.

Key Details:

• Repealed provisions previously imposed automatic penalties for employer breaches (e.g., unregistered work, late severance, unpaid social security).
• Legal debate now centers on using general civil liability principles (e.g., fault, intent, foreseeability) to pursue compensation.
• Courts have started accepting damage claims based on civil law, as seen in Vera v. Quilmes and Villalón v. Minera Santa Cruz, citing Articles 1724, 1728, and 777 of the Civil Code.
• Workers must now prove actual damage, unlike the prior system of presumed harm and fixed compensation.
• Litigation risks and labor costs may rise due to this shift in the legal framework.

What this means for employers

The end of automatic labor penalties doesn’t eliminate financial exposure. Employers may now face individual claims under civil law frameworks, requiring greater care in employment registration, severance processing, and documentation. Strengthening compliance is critical to limit costly legal disputes.

Contact us

For a deeper discussion on the above, please reach out to your Vialto Partners point of contact, or alternatively:

Javier Fernandez Biondi
Senior Manager

Lilian Falcon
Director

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