A federal judge has suspended for three months two articles of President Milei’s labor reform: one that makes workers’ lawyers share liability for legal costs when a claim is inflated, and one that lets companies pay court-ordered judgments in installments.
Judge Martín Cormick, of Federal Administrative Court No. 11 in Buenos Aires, issued two orders in less than 24 hours, reported on October 14 and 15. One responded to about 30 bar associations from provinces including Córdoba, Santa Fe, Salta, Neuquén and Tierra del Fuego. The other granted a collective suit by the Colegio Público de la Abogacía de la Capital Federal (CPACF), Buenos Aires City’s bar association. Unions did not bring these cases. Each order lasts three months or until a final judgment, whichever comes first, and neither declares the articles unconstitutional.
Article 10 of the labor reform law (Law 27.802) rewrote a rule of the Labor Contract Law on “inexcusable overclaiming”. Labor lawsuits are free for workers, but if a claim is found to be unjustifiably inflated, the worker and the lawyer pay the costs together. The reform added that this applies “objectively” whenever the amount claimed is overestimated. Cormick said the addition “lacks clarity in its wording” and leaves workers and lawyers uncertain how to frame a claim. He held that only the judge in each case can decide, after examining the conduct of the worker and the lawyer.
Article 56 lets large companies pay court judgments in up to six monthly installments, and small and medium-sized firms in up to twelve, adjusted for inflation plus 3% a year. The bar associations argued the law does not say whether lawyers’ fees, which form part of the costs, can be split too. Cormick wrote that letting companies choose installments without any say from the creditor looks, “at this early stage,” like “a clear violation of the right to property.”
For workers, the earlier rules apply again for now: costs are shared only after a judge finds fault in the claim, and companies cannot split a judgment into installments. The CPACF said the installment system “postpones the collection” of labor credits and fees. The rest of the law, in force since March, is unaffected.
The Justice Ministry, which defended the articles in court, argued that any harm was hypothetical. It said the cost rule is meant to discourage abusive claims and that installments indexed to inflation balance a worker’s credit against keeping companies and jobs afloat.
The orders add a new front to the legal fight over the reform. The CGT, the main union confederation, has its own constitutional challenge, and in July an appeals court declined to suspend any part of the law at its request. Cormick also ruled against the government this month in the university funding case.
Appeals from Cormick’s court go to the federal administrative appeals court. The CPACF said it will continue its action to have both articles declared unconstitutional.