Argentina’s Senate on Thursday gave a first-step endorsement to President Javier Milei’s contentious labor overhaul, voting 42-30 in principle after hours of debate that played out under the tension of a mass protest outside Congress. The vote, reached around 1:30 a.m., was described by supporters as an early win for Milei’s shock-therapy program and by opponents as a direct challenge to labor rights in a country where Peronism has long cast itself as the champion of workers.
According to the Associated Press, thousands of workers mobilized by powerful trade unions converged on a central square in downtown Buenos Aires earlier Wednesday, blocking traffic and clashing with police as lawmakers began what became a marathon session. The confrontations underscored the political sensitivity surrounding labor policy in Argentina, where the battle over rights and protections has repeatedly aligned with broader ideological swings.
After backing the bill in principle, senators began a lengthy article-by-article process rather than closing the matter in a single vote. The legislation still faces a new test next month in the lower house, where senators’ amendments could be altered or reversed, leaving the final shape of the overhaul uncertain.
Supporters argue the changes target structural barriers to formal hiring. They contend that high severance payouts and taxes make firing employees difficult, limiting productivity and discouraging business from taking jobs into the formal economy—where critics note that almost half of Argentines work off the books and private-sector job growth has remained stagnant for years.
Milei’s La Libertad Avanza party said in a statement at the start of the debate that “With the modernization of the labor system, more people will have access to formal, legal employment,” adding, “We are rebuilding Argentina from the ground up, starting with employment.” The bill would, as described by AP, curb the right to strike, extend trial periods in which companies can fire unproductive new employees, defang national trade unions by shifting collective bargaining to the company level, and unwind a system of severance payments by narrowing grounds for wrongful dismissal.
Opposition leaders and allied unions reject the premise that the overhaul will improve working conditions. Axel Kicillof, governor of Buenos Aires province and a leading figure in the Peronist opposition, said: “If severance pay, overtime and vacation time — in other words, all the protections workers have gained over time — are up for grabs, it won’t make things better for anyone.” Other officials framed the vote as part of a longer push that Milei has now revived after prior attempts failed.
Sen. Patricia Bullrich, who leads Milei’s La Libertad Avanza bloc, called it a decisive step, saying: “This is the most important reform in the last 50 years,” and adding, “No government has achieved it, and I believe we will.” AP notes that reform efforts have repeatedly foundered: one bid nearly succeeded in 1984 but collapsed by a single vote; another cleared the Peronist-dominated Congress in 2000 before being derailed by a scandal and later overturned; and a 2017 attempt failed to reach a vote due to union pushback.
Milei had previously used an executive order to muscle through an overhaul after taking office in 2023, but AP reports it later became tied up in court after unions sought injunctions. After Milei’s midterm victory last year, supporters said he has fresh political momentum to pursue changes businesses have long sought and international financial institutions have demanded.
Outside the chamber, the opposition and government exchanged sharp language as security forces struggled to control protesters, with AP describing water cannons and rubber bullets and demonstrators throwing petrol bombs, stones and water bottles. Authorities said they made at least 15 arrests, including protesters accused of attacking police officers. Government spokesperson Javier Lanari wrote on X that “The stale old union establishment is calling to ‘set the country on fire’ because they don’t like labor modernization,” adding that unions “choose to protect their sectoral privileges at the expense of harming Argentines.”
Even with the protests and confrontations, analysts described negotiation as continuing behind the scenes. Medley Global Advisors senior analyst Ignacio Labaqui said he was skeptical about whether the bill would drive a major shift into formal work, adding that “I’m skeptical about whether it’s going to induce a massive formalization of workers in the labor market. That’s why I think the importance is much more political, symbolic,” and that for Peronism “it would definitely be a huge defeat.” Ana Iparraguirre, an Argentine political analyst and partner at Washington-based strategy firm GBAO, said the unions’ public confrontation was matched with negotiation in private, adding: “The unions needed to protest today to reinforce their base and show them that they’re fighting, but the true negotiations happened behind closed doors,” and “They were smart enough to negotiate to preserve the things that were important to them.”