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ECONOMY | 31-12-2021 12:35

Government extends 2021 Budget and restructures double severance

The extension of the 2021 Budget and the phasing out of double severance were published last Thursday in the Official Gazette, via decrees signed by President Alberto Fernández.

The extension of the 2021 Budget and the phasing out of double severance were published last Thursday in the Official Gazette, via decrees signed by President Alberto Fernández, as anticipated by Economy Minister Martín Guzmán. The employment emergency has been extended until next June.

The government prolonged the 2021 Budget, after the harsh defeat suffered by its 2022 successor in the Chamber of Deputies, while restructuring the payment of double severance.  The presidential decrees thus make official the use of the old budget to govern the country in the new year, thus countering the posture of the opposition, which prevented the Frente de Todos government from commanding the necessary funding for public spending.

Last month the government’s 2022 Budget was defeated by the opposition in the Chamber of Deputies by a 132-121 vote after a marathon session.

The national government extended until mid-2022 the employment emergency, accompanied by a timetable scaling down double severance which is to be phased out during the first half of the new year.

"If there is currently a marked process of recovery of wage labour in the private sector, as revealed by the formal employment of 129,000 men and women in the first three quarters of 2021, even if in the most recent month, the number of workers with registered employment in private companies remains five percent below the level of December, 2015," maintained the decree.

After the various rumours regarding introduction of this measure in 2022, the government finally decided to implement in the new year a gradual reduction in the double severance for unjustified dismissals.

The new norm disposes that in the event of dismissal without cause, the affected worker "will have the right to collect, along with the severance prescribed by the corresponding legislation, an increment equivalent to 75 percent of that sum between January 1 and February 28, 2022."

That percentage will go down to 50 in March and April and to 25 percent from May 1 to June 30, 2022. Along with the ban on dismissals, which will end next December 31, double severance was one of the two measures implemented by the Casa Rosada in the context of the pandemic crisis. Both were successively extended throughout 2020 and also 2021 in the light of the continued advance of the coronavirus pandemic. Both these decisions respond to the claims of various business chambers in recent months.

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