The Tricky Language of Argentine Labor Law: Remuneration (Part 1 of 2)

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Photo by David Siglin via Unsplash

The most important legal concept to both employers and workers in Argentina is that of “remuneración.” The term “remuneración” translates into English as payment, compensation or, literally, remuneration. In this post, I’ll use the English term remuneration for the simple reason that Argentina’s Labor Contract Act (Ley de Contrato de Trabajo) follows the same terminology as the ILO Conventions, several of which have been ratified by Argentina.

Why is the concept of remuneration so important under Argentine labor law?

Mainly for historical and ideological reasons. Argentina’s labor law was ideologically conceived as an attempt to even the playing field between “powerful” employers and “exploited” workers. It is not uncommon when reading labor law jurisprudence in Argentina to find references to Marxist theory.

From a historical point of view, Argentina’s current labor law was initially reshaped by Juan Domingo Perón, who focused a significant part of his political platform on workers’ rights. During the administration of president Edelmiro Farrell, Perón (then Director of the National Department of Labor and Pensions) reformed the Argentine labor system to include unemployment compensation (indemnización por desempleo), compensation for workplace injury (indemnización por accidente laboral), mandatory yearly bonuses (aguinaldo), paid vacation days (vacaciones pagas), and other measures that earned him enough popularity among the Argentine working class to eventually rise to power and win his first presidential race in 1946.

Argentine labor law is, therefore, ideologically charged and aimed at protecting workers and ensuring the rights enshrined in the Constitution. Whether or not it is successful (or even fair) in that quest is a whole other story that exceeds the scope of this post. What you need to know if you’re doing business in Argentina is that the Labor Contract Act is designed to protect workers, not employers.

What do you need to know about remuneration to understand Argentina’s Labor Contract Law?

Remuneration in Argentina has eleven characteristics arising out of different labor law principles. Each has its own distinct name that you will hear a lot when discussing labor law with Argentine lawyers or when reading the Labor Contract Act. Let’s take a look at them:

1) Remuneration is patrimonial in nature: Luckily for you, the Spanish word for patrimonial is identical to its English counterpart. This is because both in English and in Spanish, the word “patrimonial” derives from the Latin word “patrimonium,” meaning a paternal estate or inheritance from a father. In the context of labor law, when Argentine lawyers say that “remuneration is patrimonial in nature” what they mean is that, once payment is made to a worker, that remuneration goes to his or her patrimony, which under civil law implies that it will be part of the worker’s “assets and liabilities capable of monetary valuation and subject to execution for a creditor’s benefit” (Black’s Law) and that it may ultimately be part of the estate, legacy or heritage left behind by that worker. So, the practical implication of this is that it can be taken away from the worker by his her or creditors (subject to certain legal limitations) and that, if the worker should happen to die, his or her heirs may demand whatever remuneration said worker was owed.

2) Remuneration must be equal and fair (“igual y justa”): You may be wondering why I chose “fair” and not “just” to translate “igual y justa.” As an English speaker, you know there is a significant, albeit abstract, difference between the words “justice” and “fairness” (the later having found its way into Old English via it’s long lost cousin, Old High German). Spanish had no such marriage with German and therefore uses the word “justicia” (and its adjective form “justa”) to mean both “justice” and “fairness.” Can this get confusing? Not really. Spanish-speaking lawyers are philosophically equipped to handle both levels of analysis when determining whether a decision was fair or justice was served. They’ll just express that with the same word. With that in mind, what they mean when they say that remuneration must be “igual y justa” can basically be summed up as equal pay for equal work.

3) Remuneration is not subject to any kind of substitution (“insustituible”): In plain English, remuneration must take the form of an actual payment (as opposed to, for example, social benefits or allowances).

4) Remuneration is monetary in nature (“carácter dinerario”): While it may seem obvious to readers in the English-speaking world that you pay your workers with money, this was not always the case in Argentina, where workers were often paid in kind or in a different legal tender (such as paper money, coins or banknotes) that was not valid at a national level and could often only be used at a provincial level. Thus, Argentina’s Labor Contract Act specifies that workers must be paid at least 80% of their salary or wage in the country’s designated money (moneda de curso legal), which today is the Argentine peso. This means that, even to this day, up to 20% of a worker’s remuneration can still be paid in kind. In that same vein, the law also expressly prohibits payment in foreign currencies.

5) Remuneration is unalterable and intangible (“inalterable e intangible”): What that means is that employers cannot unilaterally decrease their workers’ remuneration. In addition, remuneration can never fall below minimum wage (mínimo vital y móvil) or below the convened amount in a collective bargaining agreement (convenio colectivo). In addition, Argentine law also restricts salary advances (adelantos salariales) and salary deductions (deducciones salariales).

6) Remuneration must be paid in full (“integral”): Advances cannot exceed 50% of a worker’s total remuneration and discounts can never exceed 20%.

7) Remuneration must be proportional to the work at hand (“conmutativa”): Of course, a more literal way of explaining this concept in English would involve using the adjective “commutative” or its noun form “commutation,” but the concept of “conmutativa” in Spanish is slightly different from its English counterpart. While the English word “commutation” means exchanging money for an extracted service (Merriam-Webster), the Spanish term, as used in Argentina’s Labor Contract Act, also implies that the amount paid must be somehow proportional to the work involved. What the law does not tell us is how exactly one should go about calculating that proportionality. But that is a legal oversight that only Congress can fix.

8) Remuneration must be continuous (“continua” or “de tracto sucesivo”): What this basically means is that if workers are to be paid monthly, then you have to pay them every month, if weekly, then every week. Though this might seem like the overstatement of the century, throughout Argentina’s multiple financial crises, payment was often withheld from workers for months at a time, forcing lawmakers to explicitly clarify that remuneration must be paid regularly or uninterruptedly.

9) Remuneration is the means by which workers support themselves (“tiene carácter alimentario”): This is just one of those terms that are impossible to translate literally into English. What the law means by “la remuneración tiene carácter alimentario” is that remuneration is the means by which workers support themselves and, therefore, it cannot be messed with. It’s the driving principle behind the constitutional right to a living wage and the reason why wages or salaries cannot be seized beyond the necessary amount for workers to support themselves and their families under Argentine law (i.e. workers are still paid a minimum amount no matter how much they owe or to whom).

10) Remuneration is unseizable (“inembargable”): The amount mentioned in item 9 above is minimum wage. As of January 1, 2017, minimum wage in Argentina is $40.30 Argentine pesos per hour, with a standard 9-hour workday, that amounts to $7254.00 Argentine pesos a month. If a worker earns $10,000.00 Argentine pesos a month only $2746.00 can be seized.

11) Remuneration is non-renounceable (“irrenunciable”): What this means is simply that workers cannot renounce to or waive their right to remuneration, which is not the same as saying people can’t do volunteer work. The point here is to protect workers from a late 18th century and early 19th century custom of forcing them to renounce to all or part of their salary and accept payment in the form of food and housing instead, hence the payment in kind issue explained above in item 4.

If you’ve made it all the way to the end of this post, you’ve learned 20 words that are commonly used by Spanish-speaking lawyers in Argentina when talking about labor law. If you liked this post, join us next week for Part 2.


  8 comments for “The Tricky Language of Argentine Labor Law: Remuneration (Part 1 of 2)

  1. June 7, 2017 at 9:38 am

    A very nice clear and enlightening piece of writing, which I appreciate.


    • June 7, 2017 at 12:10 pm

      Thank you for reading and commenting, Bernardita!


      • June 8, 2017 at 11:25 am

        I would like to point out a difference I found, which may be useful for readers. Concerning the term “collective bargain convention (convenio colectivo)”, in Argentina we say “collective bargaining agreement” for “convenio colectivo de trabajo”.

        Liked by 1 person

        • June 8, 2017 at 1:29 pm

          Actually, you know what? Scratch my last comment, Bernardita. I realized what you were pointing out is that I used the convention name instead of the agreement type in my post. I just updated my post. Thanks for that!


  2. Paulo Mendes
    July 17, 2017 at 7:34 pm

    Interesting post. It looks like both Brazil and Argentina reached a powerful-bosses-vs.-exploited-workers paradigm in labor relations. A few years ago, a Brazilian observer said that, “In Brazil and much of Latin America, the ancient Roman division between patricians and plebeians is a much better fit than the left-right dichotomy of the French Revolution.”

    One historical difference, however, is that Brazil reached the exploiters-vs.-exploited paradigm from the right, by grafting Mussolini’s Carta del Lavoro into its Consolidação das Leis do Trabalho (CLT) in 1940. Fascist Italy sought to forestall class struggle and Communism by regulating every nook and cranny of labor relations. Brazil copied their scheme of mandatory, tax-supported unionization, a highly scripted form of collective bargaining, stringent regulation of trades, a dedicated labor court circuit, and even a state-run training scheme called the “sistema S.”

    These labyrinthine regulations saddle Brazil to this day. Brazilian labor law is virtually a standing invitation for employees to sue their employers, and this generates a prodigious volume of lawsuits. Brazil’s labor courts (Justiça do Trabalho) consume a greater share of GDP than the entire Judiciary in some countries. Interestingly, the JT’s running costs are approximately the same as the sum total of awards granted to plaintiffs.

    There has been, for the bazillionth time, talk of reform. Some updates are bring voted in Congress, despite fierce opposition from a formidable array of vested interests. Eppur si muove, I guess.


    • July 28, 2017 at 8:55 am

      Thank you so much for your fascinating comment, Paulo. It seems that whether from the right or the left, our countries have reached similar outcomes. Argentinean labor law also results in copious amounts of (often avoidable) lawsuits and backed-up courts, costing tax-payers millions each year. Our most recent reform created some incentives to settle out of court, but getting both lawyers and clients to embrace the new paradigm has proven quite challenging.


    • Paulo Mendes
      September 6, 2017 at 2:24 pm

      UPDATE: Apparently Brazil is breaking new records in the labor-law department


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