MAY 26, 2020

Ministry of Labor of the Province of Buenos Aires Resolution No. 169: Crisis Preventive Procedure in accordance with Act No. 24,013 provisions.



Labor & Social Security Law Department Report | Ministry of Labor of the Province of Buenos Aires Resolution No. 169: Crisis Preventive Procedure in accordance with Act No. 24,013 provisions

Dear Sir or Madam,

On May 14, 2020, Resolution 169-MTGP-2020 (the “Resolution”) was published in the Official Gazette of the Province of Buenos Aires (“BO”), establishing that, prior to the communication of dismissals, reductions of working hours or suspensions that affect all or part of the personnel, both for reasons of force majeure and for economic reasons; or lack or reduction of work in accordance with the provisions of Section 247 of the Employment Contract Law (the “Measures”), a Crisis Preventive Procedure must be substantiated in accordance with the provisions of Act No. 24,013 (the “Procedure”).

The Resolution establishes:

(i) That the commencement of the Procedure will not in itself imply the validity of the Measures, nor the application of the reduced severance payments in accordance with section 247 ECL;

(ii) That any Measure taken without initiating the Procedure will lack cause in accordance with the provisions of Section 4 of Decree No. 265/2002.

(iii) That the Procedure should be initiated before the Regional Delegation of the Ministry of Labor in which jurisdiction the offices to which the affected workers belong are located. In the event that several offices from different jurisdictions are involved, the Procedure will be issued before the Delegation where the employer has its labor books stamped or where the greatest number of affected workers is located, leaving said choice at the petitioner. In the event that companies employ employees in different jurisdictions and/or when the crisis is of such importance as to affect provincial interests, the Provincial Directorate for Collective Bargaining may intervene.

(iv) That the Procedure may be initiated by the employer, the trade union associations, and even ex officio when elements are presented that may presume the existence of a crisis that may lead to the adoption of the Measures.

(v) That, in the event that the employer fails to initiate the Procedure, the administrative authority will proceed to request the immediate cessation of the Measures or to nullify them.

(vi) That the initial presentation of the Procedure may be both on paper and in digital format, and the petitioner must prove his/her capacity, and establish a physical and electronic domicile in the initial document.

In the event that the opening of the Procedure is requested by the trade union representative, the initial presentation must also contain the name of the employer, address(es) of the affected offices, detail of the adopted -or to be adopted- measures and the amount of affected workers, all duly substantiated and accompanying all necessary prove.

In the event that the Procedure was initiated by the employer, it must also support its presentation in writing, which must have at least:

(a) Company data, name, Personal Tax Identification Number, the activity carried out;

(b) Address of each office where the workers affected by the Measures actually perform tasks;

(c) List of the facts that support the request; causes that justify the measures if said causes affect the entire company or only one of its sections, and if they are presumed to have a transitory or definitive effect and, if applicable, the time they will last;

(d) The measures adopted by the employer to overcome or mitigate the effects of the invoked causes;

(e) The Measures to be adopted, their initiation date and duration in the event they are suspensions;

(f) The total number of personnel working in the company, detailed by the office, and the number of affected workers, detailing – regarding the latter – name and surname, Personal Labor Identification Number, start date, family in charge, the area where they perform tasks, category, specialty, and monthly remuneration;

(g) The applicable collective bargaining agreement and the union that represents the workers;

(h) The economic-financial elements tending to prove the crisis situation. The presentation of the financial statements corresponding to the last three years -signed by a public accountant and certified by the respective Professional Council- will be mandatory. Likewise, in relation to the current fiscal year, the petitioner must present the cash flow statement, signed by a public accountant, and certified by the respective Professional Council. Companies that employ more than 500 workers must also accompany the social balance;

(i) In the event that the measures are based on reasons of force majeure, all evidentiary elements to prove such allegations must be accompanied.

(j) In case of having subsidies, exemptions, credits, or promotional benefits of any kind granted by any National, Provincial, or Municipal organism, a certified copy of the acts and/or instruments by which those benefits were granted must be attached.

(k) Companies with more than 50 workers must also comply with the provisions of Decree No. 2072/94, and must explain in their presentation the measures that the company proposes to overcome the crisis or mitigate its effects, in each of the following subjects:

1- Effects of the crisis on employment and, when appropriate, proposal for its maintenance.
2- Functional, hourly, or salary mobility.
3- Investments, technological innovation, productive reconversion and organizational change.
4- Qualification and professional training of the workforce employed by the company.
5- Internal or external relocation of surplus workers and relocation aid schemes.
6- Reformulation of operating modalities, concept and remuneration structures, and content of positions and functions.
7- Agreed contributions to the comprehensive retirement and pension system.
8- Aid for the creation by surplus workers of productive entrepreneurship.

(l) That, in the event of the employer’s bankruptcy in court, the petitioner must prove its initiation, detailing the intervening court and the procedural status at the time of filing.

(vii) When the employer’s proposal to overcome the crisis includes downsizing, the initial presentation shall:

(a) Indicate the number and categories of the workers that it intends to dismiss, following the order provided for in section 247 of the ECL.
(b) An offer addressed to each of the affected workers.

(viii) That in the event that any of the requirements set forth in the Resolution are omitted, the intervening administrative authority will request the correction of said defects, suspending the processing of the Procedure until its effective fulfillment.

(ix) That, once the initial presentation has been made, within 48 hours, the administrative authority will notify the other party and appoint a conciliation hearing to which both the employer and the union shall be summoned.

(x) That, in the event of reaching an agreement in the conciliation hearing, the administrative authority will analyze whether the agreement directly or indirectly involves the elimination, reduction, or alteration of social charges of the National State’s resources. In the event that the agreement involves the total or partial exclusion of a company in crisis from the applicable collective bargaining agreement, the proceeding will be suspended and it will be submitted to the Secretariat of Labor Relations who will take notice and send it to the National Ministry of Labor for its intervention. In the remaining cases, once an opinion has been issued by the legal counsel, the administrative authority will proceed to the approval or registration of the agreement within ten days.

(xi) That, when there is no agreement, the administrative authority will analyze whether the grounds invoked by the employer are proven and will dictate an act by which it orders or rejects the opening of a negotiation period between the employer and the union which maximum duration will be ten days.

(xii) That the administrative authority shall have powers to:

(a) Obtain explanatory or expanded reports on the basis of the petition.
(b) Conduct research, request opinions and advice, and any other measure that it considers necessary.

(xiii) That, once the terms have expired without the parties’ agreement, the crisis procedure will be terminated.

Both in the event of agreement or closure without an agreement, the intervening authority must send the agreement or the closing act to the Provincial Directorate for Collective Bargaining, which will create a special register of the initiated Procedures.

(xiv) That as of the notification and until the conclusion of the Procedure, the employer will not be able to execute any Measures, nor the workers will be able to strike or take any other measure of union action. Failure by the employer will imply that the affected workers maintain their employment relationship, so they will continue to accrue wages. Likewise, the administrative authority will notify the immediate cessation of said measures by calling a conciliation hearing.

(xv) That the violation of the provisions of the Resolution will also imply the application of the sanctions provided for in the General Regime of Sanctions for Labor Offenses -Annex II- of the Federal Labor Pact, ratified by Act No. 12,415, according to the qualification of the verified infractions. Likewise, the labor administrative authority may request the suspension, reduction or loss of subsidies, exemptions, credits, or promotional benefits of any kind that were granted by any National, Provincial or Municipal Organism to the offending employer.

Should you require any further information on this matter, please do not hesitate to contact us.


Alvaro J. Galli