Argentine court suspends labor changes in a blow to President Milei’s economic plan

BUENOS AIRES, Argentina (AP) — President Javier Milei suffered a judicial blow Wednesday as a court suspended labor rule changes he recently announced as part of sweeping deregulation and austerity measures aimed at reviving Argentina’s struggling economy.

The ruling by a three-judge court came on a legal challenge brought by the main union group, the General Labor Confederation, which argued that the changes affected workers rights.

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Milei’s decree announced in December established several changes in labor rules, including increasing job probation from three to eight months, reducing severance compensation and allowing the possibility of dismissal for workers taking part of blockades during some protests.

Alejandro Sudera, one of the three judges, said the administration went beyond its authority to decree labor changes, which first needed to discussed and approved by Congress.

Milei’s government said it would appeal the court’s ruling.

The union confederation applauded the court, saying the decision “puts a stop to the regressive and anti-worker labor reform.”

Labor activists have questioned whether Milei, a self-described anarcho-capitalist who has long railed against the country’s “political caste,” can impose the measures using emergency decree bypass the legislature.

On Dec. 20, a few days after taking office as the new president, Milei announced sweeping initiatives to transform Argentina’s economy, including easing government regulation and allowing privatization of state-run industries. The libertarian economist made about 300 changes.

The measures have stirred protests in Buenos Aires, Argentina’s capital.

Since his inauguration Dec. 10, Milei has devalued the country’s currency by 50%, cut transport and energy subsidies, and said his government won’t renew contracts for more than 5,000 state employees hired before he took office.

He says he wants to transform Argentina’s economy and reduce the size of the state to address rising poverty and annual inflation expected to reach 200% by the end of the year.