The rules on severance pay in detail

Severance pay in Argentina is payable at the rate of one month’s salary per year of work or a proportion of that for periods of more than three months. If the employee worked less than three months, s/he is not entitled to severance pay.

For example, if the employee has worked for one year, s/he is entitled to a severance payment of one month’s salary. If the employee has worked for one year and four months, s/he is entitled to two months’ salary. The salary amount is the normal monthly salary.

Collective bargaining agreements set out a cap on severance payment at a percentage of the salary agreed in the collective bargaining agreement. However, the Supreme Court has established that if the cap is less than 67% of the employees' normal monthly salary, the cap should be raised to 67%. Whether bonuses should be included in the calculation of severance pay is decided case by case.

Additional compensation is possible if the employer’s behaviour has been seriously culpable.

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Author: Funes de Rioja & Asociados

Date: December 2018


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