“On December 11, the ghost reveals itself.” This week, Sergio Palazzo mocked the appearance of the allegedly unknown in that situation. Amid jokes and concern, the bank leader and national deputy, one of Cristina Kirchner’s preferred union interlocutors, commented on Javier Milei’s decision.
Three days after his statement on FM Millenium, Palazzo sent an open letter to the president-elect rejecting the austerity plan, privatization of public companies, dollarization, and possible labor law reforms. The extensive statement, titled “Within the Constitution, everything; outside the Constitution, nothing,” cited Articles 14 and 14 bis, crucial for protecting workers’ rights.
In addition to being a warning, it was also a response to the libertarian’s triumphant speech on the night of the runoff, where he stated that he would not allow violent protests from those opposing his policies. Everything is within the law, and nothing is outside it. After 10 pm on that historic Sunday when an anti-system candidate charged a united Peronism, Milei delivered one of his first messages as president-elect: “We will be relentless with those who want to use force to maintain their privileges.”
Two days after the relaunch of the alliance between the three labor unions and social movements, Palazzo’s open letter to Milei was staged in a CGT hall as a symbol of resistance. The meeting of union leaders, protesters, and cooperatives is due to historical differences that make joint action unlikely. For now, it was just a momentary image, similar to the support Massa had received in the elections. Despite the statistical increase in informal labor and poverty, the CGT remains the one holding power and acting as a cohesive component of that complex puzzle.
However, three reliable sources from La Libertad Avanza suggest a question arises about how these political and social actors will relate to Milei’s government starting tomorrow. In his first presidential speech, Milei would include more references to the legacy and how to defuse the economic bomb than the chainsaw politics.
The most dialogue-prone group in the CGT, composed of the “Gordos” and the “independents,” has separated itself and has already opened a communication channel with the libertarians. The leaders of both factions stated that there was even a direct conversation with the president-elect. The following action would be to find the first institutional meeting between the CGT and the newly appointed State leader. Union leaders hope it happens before Christmas. On the other hand, Milei’s labor advisers rejected formality and recommended sectoral meetings. They do not distinguish whether the president-elect can leverage that close relationship with the union caste.
Milei would have conveyed a conciliatory message to the dialogue-prone wing of the CGT through his future ministers Guillermo Francos and Guillermo Ferraro, primarily, but also through two national deputies with union ties. The labor reform would be milder than expected; an audit would be conducted instead of immediately pruning social plans; current public works contracts would remain as in the Procrear plan and White Flag Indicators. Myriam Bregman, a Trotskyist, mocks a cuddly kitten.
The labor chapter of the “omnibus” law that Milei would send to Congress next week would be less ambitious than the one proposed by Miguel Ángel Punte, who was the number two to Jorge Triaca in the Ministry of Labor during the Cambiemos administration and is currently the Human Resources manager at Ternium, part of the Techint Group. Although it would be voluntary and negotiated by collective agreement for each activity, the labor cessation fund in the style of Uocra would be incorporated instead of immediate severance pay. With the implementation of modifications to Law 2403, the aim is to reduce the number of legal claims and take the first step to transfer labor justice to the city of Buenos Aires, one of Mauricio Macri’s commitments in his historical fight against what he calls “the lawsuit industry.”
However, no measures would directly impact union power, such as unlinking employers from their role as “withholding agents” of union fees or some mandatory contributions today. Also, it is questionable to move against the concept of excessive activity of collective bargaining agreements. Ultra-activity means that all CBAs have a duration, and if there are no new CBAs, the current one remains. Article 6 of Law 14,250 currently establishes this. Patricia Bullrich’s labor issues advisor, Dante Sica, proposed a temporary suspension. Some of Milei’s advisors justify their strategy by arguing that it is pragmatism and that there is no need to confront Peronist unions in advance.
Adjustment and Remuneration
The super-ministry of Human Capital, led by Sandra Pettovello, will absorb the Ministry of Labor, which will be downgraded to a secretariat. Omar Yasin, a Pro-affiliated labor lawyer who worked for Cambiemos as director of the Mandatory Labor Conciliation Service under Triaca’s direction, will be in charge of the Labor Secretariat. Before the end of the year, one of Yasin’s first challenges would be to request that the Salary Council update the minimum, vital, and mobile wage, which is currently $156,000. The new official may use the update to avoid the indexation of wage negotiations. One problem is that the minimum wage refers to the number of social plans, retirement benefits, and unemployment insurance. It could happen as with the budget law indicators: inflation consumes them. Are negotiations expected to remain frozen? The management will be deregulatory. A Yasin advisor said that the problem is not the salaries but the adjustment of prices.”
