A recent social media post by Fran Casaretto has brought to light the significant challenges faced by small and medium-sized enterprises (SMEs) in Argentina due to the country's labor laws. The tweet detailed the experience of a new café owner in Recoleta, who, after just 20 days of an employee's tenure, is now facing a judicial claim for 2 million pesos following the employee's resignation.
The café owner, a mother from a local school, reportedly invested significantly to establish her business, ensuring all legal requirements were met, including formally registering her first employee. However, the employee resigned after less than three weeks, alleging mistreatment, and subsequently initiated a labor lawsuit. "Inventó que la trataba mal y ahora está en juicio. Dos millones por 20 días de trabajo," Casaretto stated, emphasizing the disproportionate nature of the claim.
Argentina's labor legislation is widely recognized as pro-employee, featuring comprehensive regulations that often result in high labor costs and significant severance payments. While a three-month trial period typically allows for termination without cause or compensation, claims of "maltrato" or moral harassment can lead to immediate legal action and substantial damages, even during this period. Such allegations can result in claims for severance, moral damages, and even punitive damages, making employers vulnerable.
The incident underscores a broader concern among Argentine SMEs, which frequently cite complex labor laws and the threat of costly lawsuits as major impediments to growth and formal employment. High taxes and the potential for litigation are often seen as undermining competitiveness and discouraging job creation. According to various reports, labor lawsuits contribute to the high operational costs for businesses in the country.
In response to these long-standing issues, there have been ongoing efforts to reform Argentina's labor framework. President Javier Milei's administration has proposed significant changes through the Decree of Necessity and Urgency (DNU) 70/23 and the "Ley Bases," aiming to modernize labor relations and reduce employer liabilities. However, many of these proposed reforms, including those related to trial periods and indemnities, have faced judicial challenges and strong opposition from labor unions, highlighting the deeply entrenched nature of the current system.
The case shared by Casaretto serves as a stark example of the precarious position many small business owners find themselves in. "Los juicios laborales están destruyendo a las pymes. No se trata de sacar derechos, se trata de que emprender no sea una condena. Es hora de una reforma laboral seria, moderna y justa para la gente que da laburo," the tweet concluded, advocating for a labor reform that balances worker rights with the sustainability of businesses and the encouragement of entrepreneurship.