BUENOS AIRES: Argentina's Congress on Friday adopted President Javier Milei's flagship labor reform, handing victory to the libertarian leader in his push to boost hiring by loosening rules on working hours, dismissals and overtime.
The so-called "labor modernization law" allows working days of up to 12 hours, reduces severance pay, limits the right to strike and lowers employer taxes, among other provisions.
It returned on Friday to the Senate for a second and final vote after being ratified last week by the lower house Chamber of Deputies following government concessions on issues such as sick pay.
Milei hailed the passing of the law, which is the centerpiece of his radical free market agenda.
"HISTORIC. We have labor modernization," he wrote on X Friday.
The law brought thousands of people onto the streets in the past two weeks in protest over what they see as a rollback in workers' rights.
Two protests outside parliament ended in clashes between the police and protesters but a third demonstration on Friday saw only minor disturbances.
Polls show Argentines divided on the reform, with 48.6 percent in favor and 45.2 percent against in a recent survey.
The General Confederation of Labor (CGT), which called a general strike last week that ground Argentina to a halt, said ahead of the Senate vote that it would now take its fight to the courts.
Milei insists that Argentina's labor laws are outdated, too restrictive and discourage formal hiring.
Over 43 percent of Argentine workers lack formal employment contracts.
Sergio Emiliozzi, a 60-year-old teacher, said that while the law was being promoted as a job creation tool, "it's quite the opposite."
"What this allows is for me to be easily fired."
Opposition parties and unions have scorned Milei's claim that the reform will spur a hiring bonanza.
'False premise'
They point to the closure of some 21,000 companies and loss of 300,000 jobs since he took office as proof that his budget-slashing, deregulatory agenda, while praised for driving down inflation, is hurting the economy.
For Matias Cremonte, President of the Latin American Association of Labor Lawyers, the reform is "regressive" and "based on a false premise."
"Studies have shown that in no country in the world has labor legislation been decisive in creating or destroying jobs. That depends on economic policy," he told AFP.
A report by the national statistics institute Indec on business sentiment showed 80 percent of companies have no hiring plans for the next three months and 15 percent even planning to lay off staff.
The president of the Argentine Industrial Union, Martin Rappallini, welcomed the law's aim to reduce the number of workplace lawsuits but cautioned that unemployment "cannot be solved with a single law."
Milei has accelerated his reforms since winning October mid-terms, backed by US President Donald Trump, who promised to withhold a financial aid package for Argentina's currency unless his candidate won.