Argentina court suspends Milei's 'mega-decree' labor law reforms

The CGT trade union body had challenged the changes, which technically took effect last Friday, on grounds that they erode basic worker protections such as the right to strike and parental leave.

The three judges of Argentina's labor appeals chamber froze elements of Milei's decree which, among other things, increased the legal job probation period from three to eight months, reduced compensation in case of dismissal, and cut pregnancy leave.

Judge Alejandro Sudera questioned the "necessity" and "urgency" of the decree Milei signed on December 20 -- just days after taking office -- and suspended the measures until they can be properly considered by Congress.

Some of the measures appeared to be "repressive or punitive in nature" and it was not clear how their application would aid Milei's objective of "creating real jobs," Sudera added in a ruling distributed to the media.

Solicitor General Rodolfo Barra told AFP that the government will appeal Wednesday's ruling.

Thousands took to the streets last week to protest the reforms of self-proclaimed "anarcho-capitalist" Milei, who won elections in November with promises of slashing state spending as Argentina deals with an economic crisis, including triple-digit inflation.

The CGT has called a general strike for January 24.

'Rebuilding the country' 

The measures have drawn heated debate among jurists about their constitutionality and is the subject of several court challenges.

When he announced his mega-degree, Milei said the goal was to "start along the path to rebuilding the country... and start to undo the huge number of regulations that have held back and prevented economic growth."

The decree changed or scrapped more than 350 economic regulations in a country accustomed to heavy government intervention in the market.

It eliminates a law regulating rent, envisages the privatisation of state enterprises and terminates some 7,000 civil service contracts.

Latin America's third-biggest economy is on its knees after decades of debt and financial mismanagement, with inflation surpassing 160 percent year-on-year and 40 percent of Argentines living in poverty.

Milei has pledged to curb inflation, but warned that economic "shock" treatment is the only solution and that the situation will get worse before it improves.

The 53-year-old won a resounding election victory on a wave of fury over the country's decades of economic crises marked by debt, rampant money printing, inflation and fiscal deficit.

Milei has targeted spending cuts equivalent to five percent of gross domestic product.

Shortly after taking office, his administration devalued Argentina's peso by more than 50 percent, and announced huge cuts in generous state subsidies of fuel and transport.

Milei has also announced a halt to all new public construction projects and a year-long suspension of state advertising.

Argentines remain haunted by hyperinflation of up to 3,000 percent in 1989-1990 and a dramatic economic implosion in 2001.

(AFP)