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ECONOMY | 10-11-2018 10:53

Government agrees bonus deal with CGT

Macri administration offers 5,000-peso bonus for workers in exchange for peace during G20 summit.

The Mauricio Macri administration has inked a deal with the General Confederation of Labour (CGT) umbrella union grouping, in order to buy peace ahead of the G20 Leaders Summit later this month. A presidential decree is expected Monday, in which the president will formalise the deal Production and Labour Minister Dante Sica already closed with union leaders during tense negotiations earlier this week: a 5,000-peso bonus to privatesector workers to be paid in November and January.

Negotiations between Sica, the private sector and union leaders ran all week, as the minister attempted to mediate between sectors suffering the impact of a deep recession. Union leaders, represented by the CGT, were seeking to compensate the falling purchasingpower of wages, while securing some sort of protection against further lay-offs. Business leaders, who will be forced to pay the bonus, indicated that rising costs, particularly public services including electricity, and a stalled economy make the payment unfeasible, particularly for small- and medium-sized businesses. In between was Sica, supported by the former Labour minister — now downgraded to Labour secretary — Jorge Triaca (who was rumoured to be on his way out of the government this week.)

The government’s intention was to pass on the cost to the private sector, while avoiding an embarrassing general strike on the eve of the G20 summit. At the same time, they are looking to reduce social conflict in the historically turbulent month of December, in the midst of a crippling recession and inflation that could end the year nearing 50 percent.

The compulsory bonus was discussed in a series of tense meetings that included representatives of the Argentine Industrial Union (UIA), the Chamber of Commerce, the Chamber of Construction, and the Argentine Confederation of Medium Enterprises (CAME). Controversy surrounded the fourth point of the document — which was leaked to the press yesterday — which indicated the payment wasn’t necessarily to be included in upcoming collective wage negotiations, as the private sector sought. In other words, during the 2019 wage negotiations, unions will be looking for additional increases.

The government also included a clause forcing businesses to inform Sica’s Ministry about any intended lay-offs, looking to curtail redundancies in the face of falling output. While there wasn’t an outright ban of layoffs per se, the government indicated it will mediate in cases in order to negotiate a consensus between workers and business owners.

In response, and at the expense of the private sector, the government received a sign from the CGT that it will rule out any potential general strike during the week of the G20 Leaders Summit. This was unofficially confirmed by members of the CGT close to leaders Héctor Dar and Juan Carlos Acuña, who run the organisation.

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