In lieu of compensation for seniority, the employee and the employer agree between themselves on a labor separation agreement. The Termination Fund may be individual or collective and must be administered under certain regimes.
First we make it clear that the severance pay for the art 245 LCTa salary for each year of service and/or fraction minimum 3 months, remains as is. Now, I will tell you how the current labor compensation scheme can be replaced with the Labor Termination System.
Through the decree 847/2024 published today in the Official Gazettethe Executive Branch partially regulated the labor reform ordered by the Law Bases and Starting Points for the Freedom of Argentines No. 27,742.
Annex II of the regulations determines that the Labor Termination Systemis an alternative regime agreed upon with the unions that grants workers employers and employees the possibility of replacing the seniority compensation provided for in article 245 of the Employment Contract Law with a severance fund.
He first systemis the well-known severance fund. It is the one that is applied in the construction regime and it is where employees pay a monthly % to a bank account, a common investment fund or a bond in the name of the employee. He Labor Termination System must precisely determine the causes, facts and/or conditions under which a monetary benefit must be paid to the worker upon termination of the employment relationship.
The other system is called Individual Cancellation System. In replacement of the compensation for seniority provided for in article 245 of the Employment Contract Law No. 20,744, as well as any other compensation item whose calculation takes the aforementioned compensation as a parameter, the employee and the employer they agree with each other labor separation agreement. The Termination Fund may be individual or collective and must be administered under one of the following modalities:
a) Labor Termination Bank Account Regime;
b) Regime of Open Joint Investment Funds for Labor Termination;
c) Regime of Financial Trusts for Labor Termination.
In all cases, a differential treatment in favor of the employee dismissed without just cause.
Source: Ambito
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