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Buenos Aires, Argentina – After a marathon 12-hour session, Argentina’s lower house of Congress narrowly approved a controversial labour reform bill, in what is shaping up to be a significant win for President Javier Milei.
The vote came in the early hours of Friday after a national strike in protest against the bill caused widespread factory and business closures.
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“We have taken another step on the path to making Argentina great again,” Gabriel Bornoroni, a lawmaker in Milei’s party, La Libertad Avanza, wrote online after the vote.
The bill lays out new rules to govern relations between workers and employers. It is expected to become law before the end of the month, after the Senate reviews modifications to the version it first passed last week.
Members of La Libertad Avanza say the legislation will modernise the labour market by making it easier for companies to hire and fire workers, including through limits on severance pay and collective bargaining.
It also allows employers to extend the workday from 8 to 12 hours, creates a “time bank” to replace paid overtime and reduces the amount of uninterrupted holiday a worker can take, among other provisions.
Supporters argue the changes are essential to boost productivity, attract foreign investment and limit labour lawsuits.
They have also praised provisions that offer new tax incentives for hiring and pathways to legally register Argentina’s large population of informal workers.
“We have labour modernisation. Javier Milei gives answers to the millions of Argentines who are currently in the informal economy,” Bornoroni posted on social media after the vote.
Since the bill was first drafted, business leaders have been divided over its potential effectiveness.
Some warned that its provisions, including those affecting collective bargaining and contract stability, could generate feelings of uncertainty among employees.
Others questioned how much it would boost hiring. Ricardo Diab, president of the Argentinian Confederation of Medium-Sized Enterprises (CAME), said in an interview with Cadena 3 that a law alone is not enough to create jobs.
“To hire [people], I need to have a need, and for there to be a need, there must be production and consumption,” he said.
Meanwhile, opposition politicians and trade unionists argue that the law will strip workers of their basic rights.
“Workers were already under pressure, and this just delivers another heavy hit, leaving them with very little room to negotiate anything,” Roxana Monzon, a national deputy for the opposition party Union por la Patria, told Al Jazeera.
“It means job insecurity for workers, and it will affect the most vulnerable even more.”
She pointed to the “time bank” as an example of the bill’s problematic proposals.
Instead of mandating paid overtime, the legislation would allow employers to compensate workers with time off later on, subject to the company’s approval.
That system, Monzon explained, is ripe for exploitation, since some workers rely on overtime to pay the bills.
“The hour bank, for example, will affect women in particular, as employers can decide what hours they must work, regardless of other responsibilities they have, such as caring,” Monzon said.
Law enforcement erects a barricade around Argentina’s Congress in Buenos Aires [Patricio A Cabezas/Al Jazeera]Anxiety among workers
As members of Argentina’s Chamber of Deputies debated the bill on Thursday, thousands of people protested outside Congress in solidarity with a nationwide strike organised by the country’s main unions.
Gabriela Quiroz, a 31-year-old primary school teacher from Villa Soldati, near Buenos Aires, said she already works two jobs to make ends meet. She described the bill as an “abysmal step backwards”.
“I’m very concerned and anxious about what could happen. As a teacher, I do many extra hours, and now they won’t be paid in cash,” Quiroz said. “I barely make it to the end of the month as it is, and there are many people like me.”
She added that slashing overtime pay could have wider impacts on Argentina’s economy, with consumers spending less.
“When people don’t have money, everybody is affected,” she said. “If I don’t have money to spend, I don’t shop in my local shops, so they start to struggle. It’s a vicious circle.”
Quiroz was among the thousands of people who made their way to Congress, undeterred by the heat and the lack of public transport, one of the services disrupted by the strike.
The general strike also left airports empty, as hundreds of flights were cancelled. Factories and banks also shuttered for the day, and hospitals only provided emergency services.
As demonstrations in Buenos Aires drew to a close in the evening, security forces used water cannon, tear gas and rubber bullets against the protesters, a violent response that has become increasingly common.
Gabriela Quiroz holds up a sign that says, ‘I am the first formal worker in my family. I don’t want to be the last’ [Josefina Salomon/Al Jazeera]Thousands of businesses closed
The labour market has become a central concern in Argentina, amid a deep economic recession. The bill tries to tackle the issue from several angles.
Think tanks like the Argentina Institute of Fiscal Analysis have reported that the companies face high costs in hiring new workers, and as many as 40 percent of Argentina’s workers work in the informal sector, without job protections.
The bill offers incentives to address those issues. But analysts say what is needed is a broader look at the country’s economy.
While economic activity in Argentina has increased overall, that growth has been uneven. While sectors such as banking and agriculture have improved, manufacturing and commerce have experienced sharp declines in recent years.
More than 20,000 businesses with registered employees shut down between November 2023 and September 2025, at a pace of roughly 30 a day, according to the Center for Political Economics in Argentina (CEPA), a think tank.
During that same period, CEPA added, about 280,000 workers lost their jobs.
Stagnant salaries have also struggled to keep up with price increases for basic products and services like food.
“While in Congress, we are debating the cost of employing people, in many homes, families are discussing whether their children can continue to go to school or need to find any job to help pay for rent and food. Everything snaps at the weakest link,” Monzon said.
Young demonstrators walk past posters that read, ‘No to the slave labour reform’ [Patricio A Cabezas/Al Jazeera]Significant win
In political terms, meanwhile, analysts say the bill’s passage represents a show of strength from Milei and his party.
Milei, who was in Washington, DC, on Thursday, celebrated the bill’s success with a post on X.
“Historic. Argentina will be great again,” he wrote, offering his twist on a slogan made famous by United States President Donald Trump.
Andres Malamud, a senior research fellow at the University of Lisbon’s Institute of Social Sciences, said that for a country like Argentina, with a heavily regulated economy, the labour reform is not the most important bill, but it is the most symbolic.
It offers a blow to the historical power of Argentina’s unions, long associated with Peronism, the political movement that has governed since 1946, Malamud explained.
Milei, meanwhile, has rejected Peronism, and his party notched a decisive victory against the left-wing Peronist movement in October during Argentina’s midterm elections.
“If international conditions do not worsen and social patience holds, Milei will have achieved what no president since 1983 has: governing longer than non-Peronists while reforming more than Peronists,” Malamud said.
Meanwhile, in Buenos Aires, Susana Amatrudo, 54, a nurse from Avellaneda, told Al Jazeera she fears the changes will have a trickle-down effect across society.
“When factories close, and people lose their jobs, it affects everybody. People have less money, and they can buy less. This has been happening for a while and will only get worse,” Amatrudo said, tears streaming down her eyes, as she waved a large Argentinian flag in front of Congress.
“I’m OK, but I know a lot of people who are not, and that’s why we need to keep fighting.”
