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.
Employees' working conditions and rights are protected under labour law through the establishment of a number of principles that form the basis of the employer-employee relationship. Employers are entitled to perform controls over their employees as a consequence of their powers of organisation and direction of the company, provided that the dignity and privacy of employees are protected at all times.
Directors, partners, shareholders or controlling persons of a corporation can face potential liability as a result of labour actions pursued against the corporation. Decisions by the National Labour Court of Appeals offer some guidance as to the issues that may potentially lead to such a finding, including non-payment of social security contributions, incorrect registration of personnel and acts of discrimination.
Contractual stipulations providing that employees will not compete with their former employers' business after termination of employment are of doubtful validity under Argentine law. Nonetheless, it is relatively common for key employees to enter non-compete agreements with their former employer after termination of their contract. Such agreements have been accepted as valid by the Argentine courts in certain cases.
Employers and employees have a number of rights and obligations regarding the use of social networking in the workplace. Alongside topics relating to the misuse of such use during working hours, companies must consider the impact on their image and prestige and the confidentiality of information that may be disclosed by employees and remember that they cannot monitor employees' private use of such tools.
Argentina is currently facing a period of high inflation that raises concerns for employment in the country. The impact on white-collar workers and blue-collar workers has been markedly different, with white-collar workers much more affected by the inflation. It is not possible to force employees to execute agreements - employers must offer amounts on top of statutory benefits to obtain the employees' consent.
Argentina's employment law and the power of the unions depend on the political party in office at the time. Argentina has had a pro-employee government for a number of years. One of the hot topics of 2010 was the filing of a bill of law to give employees the right to participate in their company profits. If the bill becomes law, the unions will have even more power since they will collect a participation of the distributed amount.
Hiring expatriates in Argentina is not a simple procedure, as any employer that wishes to hire foreign employees must meet stringent immigration requirements before it can do so. In addition, before hiring a foreign employee, companies that conduct operations in Argentina must be registered with the National Registry of Sponsoring Entities and each prospective employee will require a work visa.