Amendments to the Labor Risk Insurance Regime
Yesterday, Argentina’s Government amended the Labor Risk Insurance Regime through Decree 54/2017, mainly introducing a mandatory administrative procedure prior to employees filing a judicial labor claim related to labor accidents or disease.
Through this amendment, President Macri aims to reduce the increasing labor litigation related to occupational hazards recorded over the past years in Argentina.
The amendment, published yesterday in the Official Gazette, was enacted through a presidential Decree, although a similar bill of law was currently under discussion in Argentina ’s Congress (and had obtained approval by the Senate last year), which demonstrates how serious Argentina’s new government is willing to reduce labor costs.
The Decree is in force as of January 24, 2017.
Please find below key issues of the Decree:
- Employee, counseled by an attorney in law, must go through a mandatory medical examination to be performed by a Medical Commission of the Labor Ministry of each jurisdiction, prior to filing any labor court claim related to labor accidents or disease.
- Medical Commission has a 60 business-day term to rule if employee has suffered a labor accident or disease, the extent of the disability and the compensation payable by the labor risk insurance company, in accordance to Labor Risk Insurance Law No. 24,557.
- Employee (counseled by an attorney in law) and the labor risk insurance company shall attend a mandatory hearing at which both parties will be served notice of the ruling of the Medical Commission.
- Employee and labor risk insurance companies are entitled to: (i) accept the ruling of the Medical Commission; (ii) request its review by the Central Medical Commission; or (iii) reject the ruling and file an appeal before a labor court.
- In case both the employee and the labor risk insurance company accept the ruling (either from the Medical Commission or the Central Medical Commission), or in case neither of them files an appeal within the legal term, the ruling will be final and non-appealable. Parties may also at that time settle the case agreeing a better compensation than the one ruled by the Medical Commission (also final and binding after approval by the Medical Commission).
- Base salary for calculation of the compensation to be paid by the labor risk insurance company will be adjusted in accordance with a salary increase average indicator (RIPTE) plus interest accrued from the date of disability until payment, increasing the compensation to be paid by labor risks insurance companies, as an incentive for employees to accept the compensation and avoid litigation.
- In case an employee files a labor court claim, the medical expert to be appointed by the court shall be selected from the Forensic Medical Group. This provision also aims to eliminate incentives to litigate, by excluding ordinary medical experts appointed by the court, that only collected fees in case of an adverse ruling against labor risk insurance companies.
For further information on this topic please contact Nicolás Grandi