Enrique M Stile
Marval O'Farrell & Mairal, Buenos Aires
ems@marval.com

M Paola Forchiassin
Marval O'Farrell & Mairal, Buenos Aires
mpf@marval.com

The initial obligation under the Labour Contract Law

Unlike the US, Argentina has a civil law-based system where the Labour Contract Law^[1] (LCL) regulates most individual labour relationships. Enacted in the 1970s, the LCL established an obligation on employers to provide nurseries and day care centres for children of their personnel.

The LCL delegated to the National Executive Branch the duty to determine (1) how many women should be working in an establishment for the employer to be obliged to provide nurseries and day care centres; (2) the conditions these places should meet; and (3) at what age children should have to be admitted. The Executive’s failure to regulate the LCL prevented employees from requiring companies to comply with the obligation to provide childcare spaces for almost 50 years.

It is worth noting that this obligation to provide nurseries and day care centres is set forth in Article 179 of the LCL. This article grants mothers (female workers only) two half-hour breaks to breastfeed their child during the working day for one year from the date of birth. Article 179 is under Title VII, ‘Women's Work’, which – among other things – outlines that women have their capacity to execute employment contracts recognised, discrimination based on sex or marital status is prohibited and employers are forbidden from requesting women to carry out tasks deemed arduous, dangerous or unhealthy.

Under the title ‘Women's Work’, Article 179 is found in Chapter II ‘Maternity Protection’. To protect the mother and baby, this article of the LCL forbids women from working during the 45 days prior to childbirth and up to 45 days after it. Women are to receive a social security benefit during this period. The LCL also presumes that the dismissal of a woman within seven and a half months before or after the date of delivery is discriminatory and women found to have been discriminated against in this manner are issued an aggravated severance equal to 13 times their monthly salary. This severance is added to the regular severance pay due in cases of dismissal without cause.

All these rules show that the LCL reflected – and in most of its articles still reflects – a social context where the caregiver role is exclusively attributed to female workers. The obligation to provide childcare spaces was conceived with that same idea.

The Argentine Supreme Court of Justice’s order

The absence of regulation of Article 179 of the LCL for almost 50 years led to the filing of a lawsuit in 2015 (amparo), whereby an opinion was issued by the Argentine Supreme Court of Justice.^[2] In this opinion, the Court pointed out the state's duty to facilitate, encourage and support the participation of men in caregiving tasks based on the international human rights treaties Argentina had ratified^[3] (which have constitutional hierarchy) and under Convention 156 of the International Labour Organization on Equal Opportunity and Treatment for Men and Women Workers: Workers with Family Responsibilities.^[4] In line with international standards, the Court stated that promoting care spaces allows caretakers to work without having a conflict between their family and professional responsibilities. On 21 October 2021, the Court mandated the National Executive Branch to regulate the Article.

It is worth mentioning that the Court's ruling was issued in a post-pandemic context, after a Covid-19 lockdown that had a severe impact on the workload of women worldwide, many of whom were forced to leave the labour market because of the difficulty (or impossibility) of balancing childcare and work responsibilities.^[5]

The regulation

To comply with the Argentine Supreme Court of Justice's order, the Argentine Executive Branch issued Decree No 144/2022, establishing guidelines to regulate and enforce the obligation established in Article 179 of the LCL.

According to this new regulation, establishments with 100 or more workers must provide nurseries and day care centres for the children of their workers. In line with the Court's decision, the regulation established that the gender of the person working in the establishment is irrelevant and that all workers must be considered eligible. In contrast to the provisions laid out in the LCL, the regulation thus reflects a new paradigm consistent with international treaties, which requires greater participation by men in caregiving tasks to achieve real equality of opportunities for men and women in access to quality jobs and decision-making positions.

The regulation also establishes that childcare spaces should accommodate workers’ children from 45 days old to three years old for the duration of the employees’ working day.

Childcare centres and nurseries should be situated inside the workplace. However, in cases where this is impossible, the regulation authorised two alternatives: (1) childcare spaces in consortium with companies that are located within a two-kilometre radius; or (2) subcontracting childcare spaces.

As an exception – which must be agreed to in a collective bargaining agreement or if the person works in teleworking – employers may pay a non-salary sum as reimbursement of childcare expenses, instead of offering actual childcare spaces.

What have employers been doing?

The National Executive Branch granted one year for employers to comply with the obligation, which expired in March 2023.

As established by the LCL and the general principle under the regulatory decree, the original obligation for employers is to provide childcare spaces. However, the most widespread practice has been to reimburse expenses.

A pivotal event in this development was an agreement between the Commerce Union – which represents the majority of employers in the private sector – and the Chamber representing employers in commerce and services, which established that all employers will comply with Decree 144/22 by reimbursing childcare expenses.

In a post-pandemic context in which many companies maintain a hybrid work scheme, many workers prefer to be reimbursed for childcare expenses in order to freely choose the place or person who will take care of their children. This alternative is also easier to reconcile when both caretakers are employed by different companies – as is often the case – and in telework.

Reimbursement of expenses is less burdensome to implement; it does not require a large investment and it does not detract companies from undertaking their core business activities. Also, although it could expose employers to risks if the enforcement authority interprets that the company does not fall within the exceptions authorised for this alternative, these are known contingencies that companies are willing to assume.

Considering that such practice has become so widespread, the General Confederation of Workers (CGT) and the Chamber representing employers from industrial activity (UIA), with the approval of the Ministry of Labour and the Ministry of Women, agreed that until 31 July 2023, employers could comply with Decree 144/2022 by reimbursing childcare expenses.

Limited time has passed since this term elapsed and employers now need to decide how they will proceed to comply with the law and its regulation.

Challenges and advantages of providing day care centres

It seems that most companies would be either covered by the agreement of the commerce and services sectors (and, therefore, authorised to reimburse expenses) or willing to assume the risks associated with the implementation of the reimbursement arrangement. As aforementioned, both the LCL and its regulation aim to oblige employers to provide childcare centres on their premises (or nearby) and the possibility of replacing such obligation with the reimbursement of expenses should be viewed as an exception. Failure to comply with this duty is considered a very serious infringement of the law,^[6] which means that the Ministry of Labour may impose fines that could range between approximately $150 and $6,000 per affected employee.

Replacing the provision of childcare facilities with reimbursement of expenses when it is not strictly allowed appears to be more of a formal breach than a very serious infringement, but the rule does not clarify this. In any case, as aforementioned, companies are willing to assume that risk.

Providing day care centres is not a simple or quick decision to make: it takes time to analyse the options, costs and risks, especially when there have been few experiences in the country. However, organisations promoting equal opportunities for women and members of the LGBTQ+ community are usually willing to undertake challenging scenarios and make disruptive decisions when the purpose is aligned with their values and ethical principles. For these reasons, it is likely that such organisations will assess whether reimbursing expenses effectively helps to create equality in their organisations or whether they should reconsider providing childcare facilities.

According to the Gender Module of the Survey of Labour Indicators^[7] published by the Ministry of Labour in March 2023, in Argentina the number of women employed in the labour market decreases when they have children, and gets lower the more children a woman has (76.6 per cent of employed women do not have children, 75.8 per cent of employed women have one child, 63.7 per cent of employed women have two children, and 49.9 per cent of employed women have three or more children).

Similarly, the number of women reducing their hours of productive work to dedicate themselves to caregiving tasks increases to the point where the underemployment gap between women and men reaches almost four points. This is related to the amount of time women devote to caregiving tasks. According to the Time Use Survey conducted by the Argentine National Institute of Statistics and Census (INDEC),^[8] female workers spend twice as much time as male workers on caregiving tasks. The cost of outsourcing caregiving usually results in a negative economic equation for the family, resulting in the decision for the woman to leave her job to take care of the children. This is consistent with the gender wage gap of 27.7 per cent in the registered labour market.^[9]

However, some companies in Argentina have already set up childcare facilities in the workplace. They are few and, for the most part, public sector companies. The advantages of setting up childcare spaces include women returning to work shortly after their maternity leave, lower absenteeism and turnover, as well as a strong company culture.

Final considerations

The regulation is already in force, and although there are discussions on the legality, it is reasonable that companies choose the reimbursement of expenses as the quickest and easiest way to comply with the childcare obligation in the short term.

There is no single solution that can be applied equally to all organisations. Each company must analyse its own reality and consider, among other things, the way in which production is organised, the composition of its workforce and the needs of its personnel, which differ in each case. The costs to  companies in an extremely challenging economic and financial context of the country cannot be overlooked.

However, we are confident that this will not prevent companies from re-evaluating their strategies in the medium to long term to embrace this new way of creating workspaces with equal opportunities for all of their workers – especially if they seek to increase the presence of women in their workforce, aim for personal care responsibilities not to be an obstacle in women’s professional development, and commit to unbiased working policies.