Argentina Employment Guide

Navigating Employee Termination in Argentina: A Guide for International Employers

Terminating an employment relationship in Argentina is a legally intricate process that requires strict adherence to national labor regulations. Employers cannot dismiss employees at will, especially beyond the probationary period, without facing significant legal and financial repercussions.

Permissible Grounds for Termination

To ensure compliance, employers must base terminations on specific, legally recognized grounds. Acceptable scenarios include:

• Voluntary resignation initiated by the employee.
• Mutual agreement between the employer and the employee to end the contract.
• Unilateral termination by the employer, justified by:
  • Dismissal during the probation period.
  • Objective reasons, such as force majeure or economic necessity.
  • Disciplinary dismissal due to misconduct.
  • Termination for poor performance or lack of suitability for the role.
• Natural expiration of a fixed-term contract.

Understanding the Mandatory Notice Period

Argentine law mandates a minimum notice period, the length of which escalates with the employee's tenure. This allows the employee time to seek new employment.

• For employees with less than five years of service: 30 calendar days' notice.
• For employees with more than five years of service: 60 calendar days' notice.
• During the probationary period, a shorter notice period of 15 days applies.

Calculating Severance Pay for Unjust Dismissal

A critical aspect of Argentine labor law is the right to severance pay for employees dismissed without just cause. It is important to note that reasons such as underperformance or company restructuring are generally not considered valid just causes for dismissal outside the probation period.

The severance payment is calculated based on the employee's length of service. The standard formula grants one month's salary for every full year of service or fraction thereof exceeding three months.

Illustrative Scenarios:

• An employee dismissed without cause after 4 months of work is entitled to 1 month's salary as severance.
• An employee with 1 year and 2 months of service receives 1 month's salary.
• An employee with 1 year and 3 months of service is entitled to 2 months' salary.

For multinational companies like SailGlobal, navigating these regulations is essential for maintaining compliance and managing human capital effectively in the Argentine market. Properly structuring termination processes with local legal counsel is highly recommended to mitigate risks.