Marval O'Farrell & Mairal
Founded in 1923, Marval, O’Farrell & Mairal is the largest law firm in Argentina. A market leader at both local and Latin American levels, the firm has been providing sophisticated, high quality advice to international and local clients for 90 years. The firm comprises over 300 lawyers and has wide experience of international business issues and the complexities of cross-border transactions.Show more
Employment & Benefits
The government recently enacted Decree 394/16, which increases the tax-free minimum salary, favouring pensioners and unionised employees. However, the taxation of severance payments in cases of dismissal without cause is a contentious issue for the tax authorities and taxpayers and there has been significant increase in claims for income tax withheld from employees on the termination of employment.
Jurisdiction, the application of local law and the currency of benefits based on share option plans were key factors that resulted in a $6 million award by the National Labour Court of Appeals in favour of a former director general of a large telecommunications corporation. The case illustrates that the risks associated with share option plans increase in cases of termination of employment.
Under the Labour Act, termination without just cause entitles an employee to a severance payment. When defining the basis of calculation of severance payments, the Labour Contract Act refers to the highest and average monthly salaries that an employee accrued during his or her last year of service. The inclusion of bonuses in this calculation is a highly contested issue in labour disputes.
Granting social security rights to migrant employees is of fundamental importance. Depending on the country that expatriates come from and taking into account the length of time that they have worked in Argentina, certain employees are entitled to request recognition of work carried out in Argentina under the relevant international social security agreement in order to receive social security benefits.
There is no specific regulation in Argentina regarding the monitoring of work or company emails. However, the Court of Appeals recently ruled that once an employee is given a user name and password for a company server or IT system, all communications made using that system are private. Employers and employees need to be aware of this decision, as it could be the start of a new trend in this regard.
Under Argentine law a labour relationship exists when one person provides personal services to another in exchange for remuneration, while in a legal, economic and technically subordinate position. All labour relationships in Argentina are governed by the Labour Contract Law, the Constitution and international treaties and conventions with international hierarchical status.
The Court of Appeals recently issued a groundbreaking decision on the application of the new Civil and Commercial Code's arbitrability exclusions to an agreement made before the code came into effect. The court considered the arbitration agreement in a consumer contract to be null and void pursuant to the exclusions in Section 1651 of the new code.
The new Civil and Commercial Code introduced the principle of equal treatment for foreign nationals who litigate in Argentina. In a recent ruling, the Court of Appeals in Civil Proceedings analysed the impact of this provision on certain procedural rules which require foreign nationals who do not maintain a domicile or immovable property in Argentina to provide a bond or similar undertaking when litigating in Argentina.
A recent ruling sets an important judicial precedent regarding the recognition and enforcement of International Centre for the Settlement of Investment Disputes (ICSID) awards in Argentina. The case involved the enforcement of an ICSID award against two Argentine companies in favour of Peru. The ruling established that the award could be enforced in Argentina without the need for exequatur proceedings.
A bondholder of Argentine restructured debt filed for an injunction before the courts against the Bank of New York Mellon, as trustee under the exchange bonds. The plaintiff claimed the distribution of funds (frozen by a US court order) that Argentina had deposited in the bank's account to comply with the payments under the bonds. The Argentine courts dismissed the request due to lack of jurisdiction.
Argentina recently enacted a new Civil and Commercial Code. The new code introduces a specific chapter on international jurisdiction that will substantially alter the framework which governs international litigation in Argentina. The new measures include the power to issue provisional measures and injunctions, international lis pendens and international cooperation.
The Supreme Court has dismissed a claim to obtain an antisuit injunction purporting to stop a judicial claim filed by Candlewood Timber Group LLC before the Delaware Chancery Court against the Argentine branch of a US company. Candlewood's claim was based on the Hydrocarbons Law and two concession agreements for the production and transportation of oil held by the US company.