ARGENTINA Law and Practice Contributed by: Agustin Ferrari, Hernán Alal and Astrid Nottebohm, Naveira, Truffat, Martínez, Ferrari & Mallo Abogados
2.5 Labour Law Regulations In 2026, Argentina enacted the labour Market Mod - ernization Law ( Ley de Modernización laboural ), fur- ther advancing the labour market reforms initiated by the Ley de Bases . The new legislation forms part of the government’s broader agenda to modernise the labour framework, reduce litigation, and promote for - mal employment, while seeking to increase flexibility in hiring and employment arrangements. Among other measures, the reform: • clarifies the basis for calculating severance pay - ments, establishing that only the employee’s regu - lar monthly salary should be considered, thereby excluding certain non-monthly items from the indemnification base; • introduces a salary cap for the purposes of cal - culating the remuneration base, which may not exceed three times the average monthly salary established under the collective bargaining agree - ment applicable to the employee’s category; • allows the extension of the daily working schedule from eight to 12 hours without triggering overtime payments, provided that a minimum 12-hour rest period between shifts is respected and the legal weekly limit of 48 working hours is not exceeded; • provides for greater flexibility in the organisation of working time, including the possibility of imple - menting “hour banks” that allow overtime to be compensated with rest periods; • allows collective bargaining agreements to replace the traditional severance system with capitalisa - tion-based termination funds financed through employer contributions; • creates a labour Assistance Fund (FAL), financed by employer contributions, to cover certain labour contingencies and reduce the financial impact of severance liabilities; • introduces greater flexibility in vacation scheduling by allowing vacation periods to be split and ena - bling employers and employees to agree on dates outside the traditional framework; • expands the scope for company-level agreements between employers and employees regarding working conditions;
• introduces mechanisms aimed at reducing labour litigation and increasing predictability in the calcu - lation of labour credits; and • seeks to align labour jurisprudence with prec - edents of the Supreme Court in order to reduce inconsistent judicial interpretations. These developments are intended to lower the legal and financial risks associated with hiring, encourage formalisation of employment relationships, and create a more predictable labour framework for businesses and investors operating in Argentina. 2.6 National Security Review There is no national security review of acquisitions in Argentina, other than the review of acquisitions by foreign investors of media, aviation and ownership of certain land, as previously described (see 2.3 Restric- tions on Foreign Investments ). 3. Recent Legal Developments 3.1 Significant Court Decisions or Legal Developments There has been no significant court decision in Argen - tina in the past three years relating strictly to an M&A deal. However, the following relevant decisions may affect M&A activity. • In the case of Lacuadra Jonatan c/DIRECT TV Argentina S.A. y otros s/Despido , dated 13 August 2024, the Supreme Court overturned a ruling that had adjusted a labour credit based on the CER mechanism (regulated by the Argentine Central Bank) plus 6% annual interest, with interest com - pounding at the time the complaint was served, due to high inflation. The Court deemed the deci - sion arbitrary, as it resulted in an outcome consid - ered excessively disproportionate. • In Décima, Verónica Mabel v ISS Argentina S.A. and MTV Networks Argentina S.R.L. , on 10 Feb- ruary 2026, the Argentine Supreme Court set aside a labour appellate decision that had modi - fied the calculation of interests and increased the employer’s liability beyond what the parties had requested. The Court held that such action vio - lated the principle of congruence and constituted
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