Three important business entities asked the Supreme Court of Justice to review the decision of the National Chamber of Labor Appeals (CNAT) of Buenos Aires and to modify how the benefits are calculated. interest rates which is taken into consideration to estimate the cost of labor lawsuits.
“The Argentine Confederation of Medium Enterprises (CAME), the Argentine Rural Society (SRA) and the Agricultural Intercooperative Confederation (CONINAGRO) appeared on Friday before the Supreme Court of Justice of the Nation (CSJN) and the National Court of Appeals of the Work (CNAT) for request interest rate reduction again applicable for labor credits in the National Labor Justice.”, the entities mentioned.
This new presentation by the three chambers – their original claim is from July 2023 – responds to the fact that the highest court recently resolved in the file “OLIVA, FABIO OMAR v COMA SA without dismissal” that this annual capitalization is inadmissible and determined “the unreasonableness of the previous interest rate indicating that: ‘In the case, the ordered periodic and successive capitalization of interest resulted in a disproportionate and unsupported economic result…’.
“’In particular, even though the interest applicable to labor credits is a matter located within the reasonable discretion of the judges in the case, it is possible to deviate from such principle when the questioned decision, in addition to lacking legal support , arrives at a manifestly disproportionate result that disregards the economic reality existing at the time of the pronouncement,’” stated that opinion of the CSJN.
A chamber ruling had enabled an interest-based update of a labor trial at 7,745.30 percent and the Supreme Court rejected it
“Consequently, the CNAT set the current interest rate intending to adapt to the aforementioned parameters, however, This solution is equally or even more disproportionate depending on the specific case. It is important to highlight that the rate refers to the application of the Reference Stabilization Coefficient (CER) plus six percent (6%) and involves setting an update index as an interest rate, which, is not permitted by law, and it was also already outlined,” questioned the three chambers. “In conclusion, the entities ratify the solution provided in the previous presentation in the sense that the rate cannot be higher than that set for food trials in civil matters,” they maintained.
In their first original writing, CAME, SRA and Coninagro had stated that the decision of the Buenos Aires CNAT generated “a new distortion, this time much more serious, unfair and inequitable, to the detriment of employers,” they said.
“The application of this act, far from providing a solution in the matter, what produces is greater unemployment, since it is difficult for employers, and especially small and medium-sized companies, to be encouraged to employ given the possibility that a labor eventuality has a cost much higher than the business itself. In this way, an impact of enormous relevance is caused, seriously, unfairly and disproportionately compromising companies,” stated the three business chambers.
At the end of February, the Supreme Court opined that the criterion of the chambermaids for calculating compensation for dismissal is not provided for in the law and caused a disproportionate increase in the sentence of 7745.30% percent.
Although it applies to the specific case, the ruling of the Supreme Court implies a clear signal in the framework of compensation and above all a strong blow to the interpretations about the multiplication of interests in labor demands.
Chamber IX of the National Chamber of Labor Appeals confirmed a sentence for labor compensation, increased its amount and ordered that interest calculated according to the terms of Act 2764/2022 be added to the capital of the sentence, invoking an alleged support in the article 770 of the Civil and Commercial Code.
Specifically, the ruling confirmed the sentence for salary credits and labor compensation, and raised its amount to the sum of $2,107,531.75. It also ordered that interest be added to the capital of the sentence to be calculated according to the terms of minute 2764/2022 of the CNAT. This occurred on February 27, 2015. As of November 24, 2023, it was approved a liquidation with progressive annual capitalizations of interest that increased the sentence year after year to a total of $165,342,185.66, which represents an increase in capital of 7745.30 percent.
“In such a way, the questioned interest accumulations involved repetitively multiplying the result of the effective active rates applied and exceeded without justification any reasonable weighting parameter,” determined the CSJN.
