Argentina

    1.1 In what circumstances does the employee transfer law apply?

    Under Argentinian law, a transfer may occur in two different situations:

    • transfer of a business (i.e. a transfer of assets, rights and obligations from one company to another);
    • transfer of employment contracts (where a company transfers only the employment contract of employees to another company, e.g. upon a merger, transformation to another legal form or a spin-off).
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    Author: Funes de Rioja & Asociados

    Date: January 2017

    1.2 Does the employee transfer law apply to (a) a sale of a business or (b) outsourcing?

    (a) Sale of a business

    In the case of the sale of a business as a whole, employee transfer law applies and legal provisions relating to the ‘transfer of establishments’ apply.

    In the case of a reorganisation or other situations involving third parties, (e.g. a merger, transformation to another legal form or a spin-off, or other business arrangement with third parties involving the transfer of individual employees), the transfer of employment contract provisions apply and only individual contracts will transfer.

    Note that the law regarding transfers of establishments and transfers of employment contracts does not apply to simple changes in the ownership of shares.

    (b) Outsourcing

    The rules on transfers do not apply to outsourcing.

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    Author: Funes de Rioja & Asociados

    Date: January 2017

    1.3 In outline, what are the implications of the employee transfer law?

    Where a business is transferred, all the obligations arising from the employment contract between the transferor and employee at the time of the transfer pass to the transferee. The employment contract continues with the transferee and the employee retains his or her length of service with the transferor and all rights derived from it.

    The transfer of employment contracts only (e.g. upon a merger, transformation to another legal form or a spin-off or because of the transfer of individual employees) requires the express, written consent of the employee. The transferor and transferee are jointly and severally liable for all obligations resulting from the transferred employment relationship.

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    Author: Funes de Rioja & Asociados

    Date: January 2017

    2.1 Who transfers?

    Any employee may transfer, whatever their arrangement with the employer. Therefore, for example, they can transfer even if they are only working for part of their time in the transferring business.

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    Author: Funes de Rioja & Asociados

    Date: January 2017

    2.2 Can employees object to transferring?

    Employees can challenge a transfer if their employment conditions change substantially. If that is the case, they may make a claim for constructive dismissal. If successful, they will be entitled to mandatory severance.

    An employee may consider his or her employment contract to be terminated if, upon transfer, the employee loses out in a way that justifies termination. Therefore, employers should be careful to consider cases in which a transfer will cause significant changes to the employment contracts of transferees.

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    Author: Funes de Rioja & Asociados

    Date: January 2017

    2.3 What happens to terms of employment contracts?

    The terms of employment and all rights and obligations under it transfer to the transferee.

    A transfer does not constitute grounds to change the terms of employment contracts. Employment terms can only be changed in accordance with the law. This means that the changes must not involve an unreasonable exercise of employer power, essential conditions of the contract must not be altered and no material or moral damage may be caused to the employee.

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    Author: Funes de Rioja & Asociados

    Date: January 2017

    2.4 What about other employee benefits?

    All statutory minimum benefits must be guaranteed by the transferee. Any additional benefits provided by the transferor must also be retained. Benefits agreed in the employment contract can only be changed if they do not involve an unreasonable exercise of employer power, alter essential conditions of the contract, or cause material or moral harm to the employee. If a particular benefit is difficult to replicate, the employer could try to offer something equivalent, but it would be open to challenge by the employees.

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    Author: Funes de Rioja & Asociados

    Date: January 2017

    2.5 What happens to pension rights?

    All statutory pension rights remain in force, and the transferee must pay into the state pension fund for each employee. Any additional pension rights that were provided by the transferor are treated in the same way as benefits. Therefore, private pension schemes transfer and must be treated in accordance with their terms.

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    Author: Funes de Rioja & Asociados

    Date: January 2017

    2.6 What liabilities transfer?

    The transferor and transferee are jointly and severally liable for employment obligations existing at the time of the transfer. This applies whether the transfer is temporary or permanent, whether or not the transferee is outright owner or a lessee, or has acquired the business by means of a loan and whatever the motivation for the transfer. It also applies if the transferee is considered a risk in any other way . Note that joint liability also operates where a business is temporarily transferred and is then returned to the original owner.

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    Author: Funes de Rioja & Asociados

    Date: January 2017

    2.7 Do collective agreements transfer?

    In both transfers of businesses and transfers of employment contracts, collective agreements remain in force and cannot be changed, altered or modified for as long at the transferee runs the business.

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    Author: Funes de Rioja & Asociados

    Date: January 2017

    2.8 How does the transferee obtain information on transferring employees?

    There are no statutory rules about how a transferee can obtain information about employees. However, in practice, the personnel files of the employees must be given to the transferee.

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    Author: Funes de Rioja & Asociados

    Date: January 2017

    3.1 Can employers make changes to employment contracts?

    In general terms, the employer has the power to introduce any changes it likes to the form and content of the employment contracts, provided they do not involve an unreasonable exercise of that power, alter the essential terms of the contract, or cause material or moral harm to the employees.

    If the employer fails to comply with these principles, the employee may terminate the contract and challenge the changes in court or ask the court to reinstate the old terms. In the latter case, the employer will not be able to implement the changes unless they apply to the whole of the business or unit until the court has made its final judgment.

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    Author: Funes de Rioja & Asociados

    Date: January 2017

    3.2 When can employers safely dismiss employees before or after a transfer?

    There is no statutory term (apart from the notice period for dismissal) that employers need to observe before they can carry out redundancies. Thus, the transferee could do so as soon as the transfer is complete. However, it is generally prudent to wait three or four months to avoid potential discrimination claims in court.

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    Author: Funes de Rioja & Asociados

    Date: January 2017

    4.1 Who must employers consult?

    The law provides no obligation on employers to consult about a transfer, although, in the case of a ‘transfer of an establishment’, employees must be notified of the transfer.

    In the case of a transfer of the employment contract only (i.e. where no transfer of the establishment takes place) the express written consent of the employee is required.

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    Author: Funes de Rioja & Asociados

    Date: January 2017

    4.2	What information must they provide?

    The name of the new employer, the date on which the transfer will become effective and details of the employees’ working conditions must be provided.

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    Author: Funes de Rioja & Asociados

    Date: January 2017

    4.3	What does consultation involve?

    There is no obligation to consult, but in practice it may be wise to do so if the business activities are going to change, people’s jobs will alter, or if the business is going to be reorganised in such a way that this increases the risk of insolvency of the employer. This is because if employees will lose out as a result of the transfer, they may decide to terminate their employment.

    Consultation could involve discussing the changes with the employees and the trade union, and if changes are accepted, a new contract should be signed.

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    Author: Funes de Rioja & Asociados

    Date: January 2017

    4.4	How long does consultation last?

    The length of any consultation will depend on the size of the transfer and the number of employees involved. It is not possible to generalise.

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    Author: Funes de Rioja & Asociados

    Date: January 2017

    4.5	What happens if an employer fails properly to inform or consult?

    In the case of a ‘transfer of establishment’, if an employer fails to inform employees about the transfer, the employee demand to be given information and/or consider that he or she has been dismissed.

    In the case of the transfer of employment contracts (which may occur, e.g. on a merger or spin-off or based on another arrangement with the transferee), the transfer will be void and the original employer will remain liable under the employment contract.

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    Author: Funes de Rioja & Asociados

    Date: January 2017

    5.1	Identify up to three issues in this country of which employers should be aware?

    The transfer of an employment contract (which may occur, e.g. on a merger, spin-off or other arrangement with the transferee) will not be valid and will have no legal effect without the express written consent of the employee. Note that consent will not be deemed to have been given just because the employee continues to work. It must be obtained expressly.

    Note that the law regarding ‘transfers of establishments’ and transfers of employment contracts does not apply to simple changes in ownership of shares.

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    Author: Funes de Rioja & Asociados

    Date: January 2017

    5.2	Would the employee transfer law apply on a cross-border transfer into or out of this country?

    Transfer law applies to employment contracts executed in Argentina but does not apply to cross-border transfers executed beyond the borders.

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    Author: Funes de Rioja & Asociados

    Date: January 2017

    6.1	What are the main national laws protecting employees upon transfers of businesses?

    The rules relating to transfers are contained in Employment Contract Law Nº 20.744.

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    Funes de Rioja & Asociados

     

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