The national government regulated the new system that allows for the replacement of severance pay

The national government formalized the new system that allows traditional severance pay for unjustified dismissal to be replaced by an alternative severance pay regime , which is more flexible and offers incentives for institutional savings. The measure was regulated by the National Securities Commission (CNV) and is in line with the provisions of the Basic Law, passed in September 2024.

The new model enables employers and employees to voluntarily agree to the creation of a Severance Fund, administered by Open Mutual Funds (FCI) or Financial Trusts (FF), as an alternative to the scheme contemplated in Article 245 of the Employment Contract Law.

According to the CNV, this new regime was developed after a public consultation process that allowed for the incorporation of comments from relevant actors in the labor and financial markets . "It is a structural transformation to modernize labor relations in line with the dynamics of long-term capital," said Roberto E. Silva , head of the organization.

The new scheme allows for replacing the payment of a monthly salary per year worked—current under the traditional system—with a system of periodic contributions that accumulate throughout the employment relationship . This option will only be valid if both parties agree and does not replace the traditional system, which will remain in effect for those who do not adhere to it or are not covered by the collective bargaining agreement.

The fund may be established through defined contributions between employers and workers, with clear operating rules:

• Flexibility : Contributions can be determined as a percentage of remuneration or fixed amounts, defined individually or by sector.
• Non-seizability : accumulated funds cannot be seized, which guarantees their preservation.
• Exclusive subscription : Only employers and workers will be able to participate, ensuring transparency and targeting.
• Free transfer : Upon termination of employment, the employee will receive the accumulated contributions, which he or she may manage without restrictions, although he or she will not be able to make new contributions to the fund.

Regarding administration, the FCIs that have ceased to operate may define their investment policies within the established diversification standards , while financial trusts may incorporate trustees without the obligation to publish public prospectuses on the CNV website.

Both instruments will be supervised by the National Securities Commission, which will be responsible for overseeing compliance with Regulatory Decree 847/2024 and General Resolution 1071.

The ruling party emphasizes that this new modality represents a step toward formalizing employment, allowing companies to plan their expenses in the event of layoffs without compromising their financial health. At the same time, it provides a channel to encourage the participation of labor savings in the capital market, aligned with the principles of economic freedom promoted by Javier Milei's government.

"It's a modern policy that respects the will of the parties and offers predictability to all stakeholders. We're replacing rigidities with productive consensus," emphasized an official from the Ministry of Economy who worked on the measure's development alongside Federico Sturzenegger 's team.