Mauro Pucheta, Lecturer in Law, University of Kent / 15 October 2024
The respective ascensions of Javier Milei as President of Argentina in December 2023, and Keir Starmer as Prime Minister of the United Kingdom in July 2024, present two radically different visions of labour market regulation and workers’ rights. Despite the geographical and political disparities, both administrations have placed labour reforms at the centre of their agendas. Yet the philosophies guiding these reforms appear divergent. While Milei’s administration seeks to deregulate and liberalise the labour market in pursuit of economic growth, the Starmer administration is advancing policies aimed at strengthening workers’ rights and rebalancing power within employment relationships.
This brief analysis explores the divergent approaches of both administrations across three critical areas: first, the underlying rationale for labour market regulation; second, the modification of employment contract norms and their impact on workers’ rights; and third, the role of trade unions and collective bargaining in shaping employment relationships.
Labour Market Regulation: Economic Growth versus Strengthening Labour Rights
Javier Milei’s administration represents a decisive break from Argentina’s regulatory traditions, as evidenced by the sweeping labour law reforms introduced through emergency decree DNU 70/2023. Milei, has openly framed labour regulation as an obstacle to economic growth, advocating for the removal of barriers that, in his view, stifle market dynamism. The decree, issued just weeks after Milei assumed office in December/23, aimed to deregulate the Argentine economy and introduce substantial flexibility into labour relations. A key feature of the decree is the prioritisation of market-driven solutions over state intervention, with the government’s justification citing the need to enhance labour market ‘flexibility’ to boost employment and economic activity.
The comprehensive reforms of DNU 70/2023however, were quickly met with judicial resistance. An Employment Appeal Court in Buenos Aires declared the Labour Reform Title of the decree unconstitutional, leading to the suspension of its ‘Labour’ chapter – pending a final decision from the Supreme Court, which will decide whether the decree comes back into force or is definitively repealed. In response, the Milei administration pursued legislative approval for the ‘Foundations and Starting Points for the Freedom of Argentines Act’ (Ley Bases), which successfully passed through Congress in June 2024. The new law solidified many of the provisions initially introduced under DNU 70/23 and forms the foundation of the administration’s economic strategy. The law advances labour flexibility as a key tenet, emphasising deregulation and privatisation as tools for attracting investment and stimulating growth.
As per the rationale of the labour market regulations reforms, it is worth noting the recital of the DNU 70/23 that set out:
‘(…) private enterprises are the best option to develop a social safety net, through employment and the generation of goods and services necessary for the entire society, and for this, changes are required that allow an expansion of the labour demand.’ Furthermore, the aforementioned decree states that reforming several pieces of labour legislation is necessary, amongst other reasons, ‘(…) to provide legal security to labour relationships (…)’.
In contrast, Sir Keir Starmer’s Labour government in the UK has taken a different approach, prioritising the protection and enhancement of workers’ rights. In his first King’s Speech, Sir Starmer outlined the introduction of the Employment Rights Bill, a key legislative proposal that promises to strengthen workers’ rights, improve job security, and introduce measures to curb exploitative practices such as zero-hours[i] contracts. Where Milei sees deregulation as a path to prosperity, Starmer’s government views the protection of workers as fundamental to ensuring fairness and inclusivity in the labour market. The Labour administration has also declared to be a pro-business government. Specifically, it has stated that ‘[m]odernising the world of work will raise standards and tackle undercutting, so businesses are empowered to compete in a race to the top.’
The Employment Contract: Weakening versus Strengthening Workers’ Rights
One of the main contrasts between the two administrations can be observed in their treatment of employment contracts and workers’ rights. In Argentina, Milei’s reforms have introduced significant changes to the regulation of employment contracts, notably weakening protections for workers. The Ley Bases and its predecessor, DNU 70/23, have altered the legal framework governing employment status, effectively removing many workers from the scope of the Contract of Employment Act (LCT).
Notably, contracts for services, agency work, and project-based employment are now governed by Argentina’s Commercial and Civil Code, rather than the LCT. Furthermore, contracts for projects and/or professional services are no longer included in the Article 23 LCT presumption of the existence of a contract of employment. This shift effectively reduces the protections afforded to individuals in these employment relationships, as they are no longer presumed to be employees under the law. Moreover, the reforms introduce a new category of ‘independent workers,’ who are permitted to hire up to three employees without being subject to LCT protections. This change could be seen as potentially undermining the principle of employment security and may lead to an increase in the precariousness of employment relationships in Argentina.
On the contrary, the current UK government has proposed introducing a ‘single worker status’, which aims to simplify the current complex landscape of employment classifications in the UK, which includes categories like employee, worker, and self-employed. Under this proposal, a single worker status would apply to all individuals performing work, providing them with a unified set of rights, regardless of whether they are part of the gig economy, in traditional employment, or classified under other arrangements. This reform seeks to eliminate ambiguity in employment contracts and ensure that all workers enjoy key employment rights. This proposal is part of Labour’s broader focus on enhancing workplace protections, addressing precarious work, and improving conditions for those in insecure jobs.[ii]
Secondly, the Milei administration has decided to liberalise and encourage employers to rely on triangular employment relationships. Unlike the now-repealed Article 29 of the LCT, which allowed workers to claim that they were performing their work directly in favour of the end-user company[iii], the new provision sets out that the ‘only’ employer will be the one that registers workers in the social security system, that is the ‘agency’ or contractor.
The Starmer administration’s approach is different. The Labour’s
Plan to Make Work Pay seeks to strengthen the rights of workers across the UK by expanding protections for atypical workers, such as those in insecure and gig-economy jobs. Starmer’s government has committed to abolishing zero-hours contracts – a key feature of the UK’s flexible labour market – which have been criticised for fostering insecurity and eroding basic employment rights. Additionally, the Labour government has pledged to ensure that all workers, regardless of contract type, benefit from the same core protections, including access to sick pay and the national minimum wage.
Another area of divergence is the treatment of unfair dismissal. Milei’s reforms have reduced compensation for unfair dismissal governed by Article 245 of the LCT, through the Emergency Decree 70/23, which is currently suspended. Furthermore, under the Ley Bases, employers are only required to provide financial compensation in cases of discriminatory dismissal, eliminating the previously available right to reinstatement. Moreover, it has repealed compensation for unregistered employees, representing a significant rollback of workers’ rights. This change is particularly consequential given the high levels of informal employment in Argentina, where an estimated 35-40% of workers lack formal registration.
In contrast, the Starmer administration has sought to bolster dismissal protections. The Labour administration proposal, which may be included in the Employment Rights Bill, proposes the introduction of ‘day-one rights,’ which would eliminate the current two-year qualifying period before an employee can claim protection from unfair dismissal. This move is intended to enhance job security and provide workers with greater recourse against arbitrary dismissal.
Trade Unions and Collective Bargaining: Deregulation versus Empowerment
The role of trade unions and collective bargaining in regulating employment relationships is another area where the approaches of the Milei and Starmer administrations diverge considerably. In Argentina, Milei’s reforms aim to weaken the influence of trade unions and collective bargaining, with the explicit goal of promoting deregulation. One of the key mechanisms on which the government relies under the Ley Bases is the notion of disponibilidad colectiva, which allows collective agreements to derogate from statutory employment protections. This provision empowers employers and unions to negotiate away rights enshrined in the LCT, effectively enabling a ‘race to the bottom’ in terms of employment standards.
Despite the ostensibly deregulatory agenda, Milei has sought to engage with trade unions, particularly in the face of strong resistance to his reforms. The Ley Bases relies on collective bargaining at the sectoral level to implement many of its provisions, including changes to the regulation of working time, the extension of probationary periods and the adoption of an end-of-service payment fund.
The Milei administration has employed the disponibilidad colectiva methodology as a key instrument for advancing labour law reforms. Notably, Article 79 of Decree 70/23 (currently suspended) empowered social partners, through collective agreements, to liberalize working time regulations.
A second significant area where disponibilidad colectiva plays a central role is in extending the probationary period. The standard legal probationary period has been lengthened from three to six months. In addition, the Ley Bases allows social partners, via collective agreements, to further extend this period to:
- Eight months for companies with 6 to 100 employees;
- One year for companies employing up to five workers.
A third and contentious application of disponibilidad colectiva is related to the proposed Fondo de Cese Laboral (End-of-Service Payment Fund), which could replace the current severance compensation for unfair dismissal under the LCT . Modelled after the system used in the construction sector, this fund is voluntary and would be governed by collective agreements. In this context, the involvement of social partners is critical, as their agreements could lead to sweeping changes in Argentina’s labour law framework. However, this provision has sparked considerable debate, as it challenges job stability, a core principle of Argentine labour law, and raises concerns about its constitutionality.
The Starmer administration’s position on trade unions and collective bargaining is fundamentally different. Starmer’s government has emphasised the need to rebalance power within employment relationships, in part by empowering trade unions. The current Labour government has committed to strengthening the role of unions in representing workers and negotiating better terms and conditions. It has also committed to reforming and repealing anti-union legislation passed under previous Conservative governments, which placed significant restrictions on industrial action, particularly the Trade Union Act 2016 and the Strikes (Minimum Service Levels) Act 2023. In line with this commitment, the new government has promised to restore and extend workers’ rights to organise, bargain collectively, and take industrial action, seeing these as essential tools for improving wages and working conditions.
Conclusion
The labour market reforms of the Milei and Starmer administrations reflect two radically different ideological perspectives on the role of the state, the market, and workers’ rights. In Argentina, Milei’s policies are geared towards economic liberalisation, with the deregulation of labour laws seen as a means to reduce costs for employers, attract investment, and stimulate job creation. However, these reforms come at the expense of workers’ protections and raise concerns about the growth of precarious employment.
In the United Kingdom, by contrast, Starmer’s Labour government is pursuing a more interventionist approach, seeking to strengthen workers’ rights, enhance job security, and rebalance power in favour of employees in favour of a more efficient and productive economy. The eventual introduction of the Employment Rights Bill, alongside commitments to improve conditions for atypical workers and empower trade unions, will mark a significant departure from the deregulatory agenda of previous Conservative governments.
Ultimately, these contrasting approaches highlight the broader political divide between those who view labour market flexibility as essential to economic competitiveness and those who see the protection of workers’ rights as a fundamental component of a fair and equitable society. While it remains to be seen whether the reforms in either country will achieve their stated aims, the divergent paths of Argentina and the UK offer a telling case study in the global debate over the future of work and workers’ rights.
[1] This paper was developed before the introduction in Parliament of the new Employment Bill, published on Thursday 10/10/2024.
[i] A zero-hours essentially means that there is no guaranteed limited number of working hours for the employee. In other words, employees are ‘on call’ and only work when they are needed. This means of course that the hours (and pay) can change considerably from week to week leading to a general sense of unpredictability even if allowing flexibility.
[ii] LABOUR’S PLAN TO MAKE WORK PAY. Delivering A New Deal for Working People. https://labour.org.uk/wp-content/uploads/2024/06/MakeWorkPay.pdf
[iii] For example: if a company relied on agency workers (‘temps’) for specific roles like cashiers and these workers then performed their roles directly in the retail stores and were integrated into the store’s day-to-day operations, they could argue under the existing LCT that they were directly employed by the end-user company (the retail company), not just the agency.
SOBAL 