Article Published in “El Cronista Comercial”
By Martín Pagano
Partner in charge of the Labor Department of Canosa Abogados
It is characteristic of the Argentinean society the emerging conflict of the allocation of the corporate profits. On one hand some go for a fifty-fifty distribution of the profits, on the other hand, they state profits should not be shared.
In a society in which the force is stronger than reason, the possibility to negotiate depends on how strong each party is, and how much strength each party has to resist the fight.
Obviously, in the end, the conflict shall be resolved, and both parties and the society will have made an unnecessary waste of energy. Translate it into money, that is what this matter is about, and we shall elucidate huge losses. Strikes, ‘piquetes’, lock-outs. All of them are ‘legitimate’ measures. But, who benefited during the conflict? Nobody, except those who always benefit during conflicts. Who is harmed? Everybody else, us, the society in its entirety, workers and companies in particular.
Denying or rejecting the claim of the working class makes no sense, especially considering a constitutional mandate in the near term. Even more, taking into account the arguments stated by the representatives of the General Confederation of Labor, about the ‘association’ between the profits and the direct benefit which implies the good performance of each employee.
Consequently, this matter shall be considered as an –unique- opportunity to renovate and innovate the body of labor laws. It is a truth of Perogrullo that our labor regime greatly discourages productive investments.
The first possible –and convenient- innovation to be made is the one relating to severance pay. Take this proposal as a beginning for a general debate on the labor regime.
The reformulation of section 245 of the Employment Law is needed to give certainty to the companies at the moment of calculating their liabilities. The current multiplicity of interpretations on the items that compose the monetary variable in the base of the calculation of this indemnification, and the duality between that stated by law, and the interpretations of the National Supreme Court in the case “Vizotti”, make necessary to state a clear and unchanging rule. That would allow, on one hand, the clarifications of costs, and on the other hand, the reduction of judicial claims with this motive.
If the distribution by proportions established by law was related to the workers’ seniority, a continuing commitment shall be achieved, discouraging conflictive workers. The more the jobs the worker has had, the less his seniority, and consequently, the less his proportion in the distribution of profits.
Prejudices must be discard. The reformulation of the legal basis of our labor regime gives opportunity to address the relationship of the productive world in a point of view in which both parties involved are directly benefited, and that, ultimately and indirectly, the entire society benefits as well. Obviously, the solution of this matter must be based in a sustainable agreement, and for that to happen, both parties must cede till the point in where both parties are conform and benefited in the change.
This solution exists if both parties have the greatness to give up some ‘iron clauses’ which exist at present. The solution is simple, but requires on both parties the acknowledgement and the mutual commitment of respecting the production factors, the capital, the effort and the commitment at work.
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Javier Canosa wrote an opinion piece in the latest edition of Alternative Latin Investor, "Tax Incentives Software Development in Argentina" (Only available in english). Click here to access the article »
Javier Canosa wrote an opinion piece on the current projects for amending the Argentine law on financial entities in the latest edition of Alternative Latin Investor. (Only available in english). Click here to access the article »
Martín Pagano, Partner in charge of the Labor Department of Canosa Abogados, Article Published in “El Cronista Comercial”: “Profit sharing: between fifty-fifty and nothing.”
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Javier Canosa wrote an opinion piece on the current activity of the Financial Information Unit, administrative entity responsible for preventing and prosecuting money laundering activities in Argentina in the edition of November 19, 2010 of the Argentine Newspaper “El Cronista Comercial”. (Only available in spanish).
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Javier Canosa contributed with an article in the last edition of Alternative Latin Investor.
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Javier Canosa has contributed to the 2010 Argentine Chapter of Getting the Deal Through - Banking Regulation 2010, (published in April 2010; contributing editor: Craig Wasserman of Wachtell Lipton Rosen & Katz). (*)
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Corporate Governance Rules in Argentina.
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The link to June's Contributor Most Read In Argentina »
Javier Canosa has contributed with the Argentine Chapter of Getting the Deal Through - Banking Regulation 2009, (published in April 2009; contributing editor Craig Wasserman).
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Insolvency and Bankruptcy Rules in Argentina.
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Javier Canosa was distinguished in Real Estate & Construction section of Who’s Who Legal for the 2008 edition. “His competence is well known throughout the community” said the distinguished UK publication.
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