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  • Legal system, currency, language

    Constitutional and civil law with certain application of case law. Pesos (ARS). Spanish.

     

  • Corporate presence requirements & payroll set-up

    A foreign entity cannot hire employees in Argentina without a local corporate presence.

    Employers must pay social security contributions (23% or 27% on top of salaries, depending on the company's activity and revenues). Employees must contribute 17% of their salaries to the social security system (to be withheld by the employer and subject to certain taxable limits). Income tax is also withheld by the employer when paying employees' salaries (maximum rate 35%, subject to a progressive scale).

    Collective bargaining agreements for certain activities provide payments to be made by the employer and/or the unionized employees to the relevant unions.

  • Pre-hire checks

    Required

    • Pre-hire medical checks are required pursuant to resolutions issued by the Occupational Hazard Superintendence. If an employee does not complete a pre-hire medical check, the employee will be deemed to have begun work in optimal health; therefore, any injuries or diseases which subsequently arise will be deemed to have happened during the employment relationship.
    • Criminal record checks are required for foreign employees to obtain a work visa.

    Permissible

    Where criminal checks are not required for work visa purposes, they are only permissible (and often done in practice) for specific roles (eg, high-level managerial positions). Reference and educational checks are common and permissible, provided applicant consent is previously obtained.

  • Immigration

    Foreigners from non-Mercosur countries must obtain a temporary residence permit that permits them to enter and work in Argentina. Temporary residency is granted for a maximum period of up to 1 year, extendable for periods of equal or shorter terms. After 3 consecutive years as a temporary resident, foreign employees are entitled to apply for permanent residence.

    Citizens of Mercosur countries can apply for temporary Mercosur residence in Argentina without the need to present a work contract to the authorities. Temporary Mercosur residence is granted for 2 years and enables the individual to work and to apply for permanent residence on expiry of the temporary residence.

  • Hiring options

    Employee

    Full-time, part-time, fixed-term, indefinite-term employees or trainees.

    The following factors tend to indicate a labor relationship: availability to work for his/her employer; an employer who directs and subordinates the individual; an employer who instructs the services and duties required and creates the individual's schedule. Courts will also look at the extent to which the worker depends economically on the employer.

    Independent contractor

    Contractors should only be engaged where there is no labor relationship, that is, no direction/subordination or economic dependence.

    Misclassification, that is failure to register an individual as an employee, or submission of an incomplete or defective registration, carries the risk of severe sanctions and fines from the authorities (including amounts owed to social security for unpaid contributions). In addition, steep fines are levied upon statutory severance, including the doubling of the amount of severance owed to a (misclassified) employee.

    Agency worker

    Employers can engage workers through agencies. Agencies must be authorized by the authorities to function as an agency.

    The employer will be jointly and severally liable with the agency for all labor obligations arising from the worker's employment.

  • Employment contracts & policies

    Employment contracts

    There is no general, legal requirement to execute employment contracts in a specific form – meaning that they can be in writing, made orally, etc. unless a specific law or collective convention applies and indicates otherwise. Notwithstanding, employers are advised to enter into a written employment contract.

    Probationary periods

    The maximum permitted duration of a probationary period is 3 months. After the end of the 3 month period, the employee will turn into an indefinite term employee.

    Policies

    The law does not require employers to have specific policies in place. Notwithstanding, there are some policies that are strongly recommended to prevent potential conflict, such as bonus policies.

    Third-party approval

    Third-party approval is not required for employment contracts or any policies.

  • Language requirements

    No statutory language requirements; however, in practice, employment contracts are drafted in Spanish.

  • Minimum employment rights

    Employees entitled to minimum employment rights

    The Employment Contract Law No. 20,744 (LCL) governs the minimum employment rights in Argentina.

    Pursuant to Article 3º of the LCL, the law governs everything related to the validity, rights and obligations of the parties, provided the employment contract is performed in Argentina, even if the contract was entered into abroad.

    The LCL applies to "workers" which covers not only employees working under an employment contract, but also other individuals who personally perform "work" or provide services for the employer.

    For this purpose, "work" should be understood as any legitimate activity that is provided in favor of someone who has the power to direct that work, through the payment of remuneration for those activities and/or services rendered.

    The main factors that will tend to indicate that an individual is an employee rather than a worker or self-employed worker, are:

    • The employee must be available to work for his/her employer
    • The employer will direct and subordinate the employee, appoint the services and duties required and order the employee to comply with a schedule

    Courts will also weigh the extent to which the worker depends economically on the income obtained from the alleged employer.

    Working hours

    The general maximum number of hours is 8 hours per day or 48 hours per week for all employed workers in public or private enterprises. Each extra hour worked above these limits is deemed to be overtime.

    Notwithstanding the foregoing, Article No. 3 of Law No. 11,544, in its subsections a), b) and c) regulates exceptions to the abovementioned maximum limitation on working hours. The limitations do not apply to employees performing duties under the form of a "job team," that is, working in a special coordinating rotation system, nor to employees performing duties in high-level positions (main managers, directors etc.).

    Overtime

    Employees in Argentina are allowed to perform overtime. Overtime will be only compulsory in cases of danger or accidents or imminent force majeure, or by exceptional demands of the national economy or the company (Article No. 203 of the LCL).

    Overtime must be paid with a surcharge of 50%, calculated using the employee's usual salary if the overtime hours were worked during business days, and 100% on Saturday after 1pm, Sunday or holidays. In no event may employees work overtime of more than, 3 hours per day, 30 hours per month or 200 hours per calendar year.

    Wages

    The national minimum wage (NMW) is updated regularly by the National Council of Employment dependent of the Ministry of Production and Labor. The NMW rate as of December 2018 is AR$11,300.

    Most CBAs also provide for a specific minimum wage applicable to employees subject to the CBA.

    Vacation

    Employees with less than 5 years seniority are entitled to 14 calendar days after 6 months of work. This increases to 21 calendar days for employees with between 5 to 10 years of seniority; 28 days for employees with between 10 to 20 years of seniority, and 35 days for employees with more than 20 years of seniority. For employees with less than 6 months of service, employers must grant 1 day of vacation per worked month. Companies should grant vacation to their employees between October 1 to April 30 of the following year.

    Sick leave & pay

    Sick/accident leave of up to 3 months per year must be provided to employees with less than 5 years of seniority, while 6 months must be granted to employees with seniority of 5 years or longer. For employees with "family dependents" (generally understood to be the immediate family that economically depends on the employee’s wage and labor benefits), these periods are doubled, to 6 and 12 months, respectively.

    Maternity/parental leave & pay

    Pregnant employees may take leave of 45 days prior to giving birth and up to 45 days after giving birth. However, the employee may choose to reduce the leave prior to giving birth, but it may not be less than 30 days, and add those days to the maternity leave period after the birth of the child. In the event of premature birth, the period of the leave that has not been enjoyed before the birth will be added to the leave period after the childbirth. Further, the employee is entitled to earn her gross remuneration (without any withholding contributions made to the social security system), during maternity leave. The ANSES (as defined below) pays the remuneration of employees during maternity leave.

    Fathers are entitled to paid leave of 2 consecutive days for the birth of his child. There is no general regulation providing other parental leave after the birth of a child. 

  • Discrimination

    The law prohibits discriminatory acts or omissions based on race, religion, nationality, ideology, political or trade union opinion, sex, economic position, social condition or physical characteristics.

    In addition, Argentina has ratified international antidiscrimination conventions, such as the Convention of Belem do Pará and the Convention on the Elimination of All Forms of Discrimination against Women.

  • Benefits & pensions

    The Social Security National Administration (Administración Nacional de la Seguridad Social, hereinafter ANSES) is the authority in charge of the administration of the social security system in Argentina, called Sistema Integrado de Jubilaciones y Pensiones (SIJP). Employers and employees are required to make contributions to the SIJP which provides for old age pension and disability benefits.

    To qualify for a statefunded pension distribution, male employees must be 65 years old, while female employees must be 60 years old. In both cases, in order to qualify for pension the employee must have contributed to the SIJP for a minimum of 30 years.

    Employers do not have a legal obligation to provide a private pension scheme for employees, as the employees are entitled to state pensions.

  • Data privacy

    The Data Privacy Law No. 24,766 sets limits to the type of personal data that may be collected by prohibiting the collection of sensitive personal data, such as data that is related to political or religious opinions, and regulates the collection, use, processing and transfer of personal data.

    Employers are allowed to monitor employee's work devices, provided the employee is duly notified in advance, and personal information is safeguarded and not disclosed.

  • Rules in transactions/business transfers

    Where there is an asset transfer that qualifies as a business transfer, all obligations arising from the employment contracts that the transferor has executed with its employees will be taken on by the transferee after the transfer. Employment contracts will continue with the transferee and the employees will retain their seniority with the transferor and the rights arising from it. Therefore, on the execution of the transfer, all employees are automatically transferred to the transferee, after their written consent has been obtained.

    Although in practice both internal consultations and collective consultation with trade unions are held before a business transfer takes place, the transferor and the transferee are not required by law to inform or consult employees on a business transfer. However, in order to perform the transfer of staff, the employee’s written consent must be given prior to the transfer. In the absence of this consent, the employee may terminate the employment, with the right to compensation.

    The transferor and the transferee will be jointly and severally liable for any dismissals that arise due to the transfer.

  • Employee representation

    Argentina is a highly unionized country with approximately 3,100 active trade unions with considerable political power. There are unions in nearly all sectors or industries.

    A trade union must be recognized by the Ministry of Production and Labor. Only recognized and authorized unions can enter into a CBA. Employers cannot recognize an unauthorized union voluntarily, not even for collective bargaining purposes.

    The National Constitution sets out collective labor rights in its Article No. 14 (bis), guaranteeing unions the right to collectively bargain and the right to strike.

    CBAs are very common in Argentina. There are different types of CBAs depending on the territory in which they are going to be enforceable. Some CBAs only govern employees within one specific company, whereas other CBAs govern employees performing certain activities in a geographical region or industry.

  • Termination

    Grounds

    Cause is not required for termination of employment; however, it is required to avoid payment of statutory severance. There is no exhaustive and/or exemplary list of behaviors that constitute cause for dismissal; therefore, whether a dismissal is with or without cause will depend on judicial judgment on a case by case basis. 

    Who is subject to termination laws?

    All employees.

    Prohibited or restricted terminations

    Public employees and union delegates cannot be dismissed without cause and without complying with the statutory procedure for these terminations. All other employees can be dismissed with payment of statutory severance, which will differ based on the case (maternity, illness, etc.)

    Pregnant employees are protected from dismissal. If a pregnant employee is dismissed within the period of 7-1/2 months before or after the date of childbirth, the pregnancy will be considered to be the cause of the dismissal, entitling the employee compensation for the discrimination equivalent to their annual salary, in addition to the applicable severance payment.

    Further, if a dismissal occurs 3 months before the marriage of an employee, or 6 months after it, the dismissed employee will be entitled to a special compensation.

    In order to dismiss employees on sick leave, employers must pay a special severance (full severance payment applicable for dismissal without cause, plus the salary which would be payable for the entire period the illness would be expected to last, according to medical opinion).

    Third-party approval for termination/termination documents

    Under Decree No. 1043/18 (effective as of November 14, 2018), employers wishing to dismiss indefinite term employees without cause must notify the Ministry of Production and Labor at least 10 business days before the decision goes into effect. This Decree is effective through March 31, 2019.

    As this decree was issued recently, there is no administrative or judicial case law interpreting the Decree.

    Mass layoff rules

    Prior to a mass dismissal, an employer must provide notice to the respective trade union that regulates the employer's industry. Collective consultation may be required depending on employee headcount.

    Prior to executing or communicating dismissals or suspensions due to force majeure, economic or technological causes that affects more than:

    • 15% of the employees where total headcount is less than 400
    • 10% of the employees where total headcount is between 400 and 1,000 and
    • 5% of the employees where total headcount is greater than 1,000

    Employers must comply with the Preventive Procedure of Companies Crisis (PPC) before the Ministry of Production and Labor. During this procedure, the company will engage in negotiation with the respective union acting on behalf of their members. The aim of this procedure is to avoid business shutdowns or bankruptcy. After the company files the request at the Ministry of Production and Labor, the Ministry will forward the claim within 2 business days of the filing to the other party for its response. After a response is made, a settlement hearing will be scheduled within the next 5 business days. If a settlement is not reached, the Ministry will open a "negotiating period" that must not extend beyond 10 business days. If the parties still do not reach to an agreement within that period, the PPC process will conclude. Notwithstanding this, in practice, this procedure normally takes longer than the law sets out.

    Notice

    In order to proceed with termination, employers must give notice to employees before the dismissal. 

    The term of this notice will depend on the seniority of employees:

    • During their probationary period, notice must be given to employees 15 days before termination
    • In order to dismiss employees who have completed the probationary period but who have less than 5 years of seniority, notice must be given 1 month prior to the dismissal and
    • Employees with more than 5 years' seniority must receive 2 months' notice before their dismissal

    Statutory right to pay in lieu of notice or garden leave

    Employers are permitted to pay in lieu of notice. Current legislation does not regulate nor prohibit garden leave.

    Severance

    An employee who is dismissed without reasonable cause is entitled to statutory severance of 1 month's salary for each year of service, or period longer than 3 months. This amount is calculated using the employee's highest monthly, regular compensation received in the last 12 months of work. This baseline cannot be more than 3 times the "monthly payment," which is the average of all compensation set out in the applicable CBA at the time of the dismissal (this average is periodically published). The Ministry of Production and Labor governs the updating of this average for every authorized trade union.  

    If the employee is not subject to a CBA (typically, senior employees), the limits applicable to the activity in which he/she performs duties will apply. In no case will the amount of the compensation payable be less than 1 month of real salary.

    Currently, in the Vizotti case, the Supreme Court of Justice has raised the basis for calculating compensation subject to a limit, establishing that it will be 67% of the employee's monthly and usual compensation, the amount to be multiplied by the years of service of the employee, based on constitutional reasons and in cases where the application of the legal limit imposes a reduction to the severance payment of more than 33%.

    This severance payment may be reduced or increased in other types of termination (eg, force majeure and lack or reduction of work; death of the employee; employer's bankruptcy; employee's retirement; employee's illness; employee's pregnancy; etc.)

  • Post-termination restraints

    Non-compete, customer non-solicitation and employee non-solicitation clauses are often used, especially when the employer and employee negotiate the terms and conditions of the termination of the employment.

    Restrictive covenants are capable of being enforced post-employment, provided the employee receives compensation for the restrictions. Therefore, consideration is required for valid restrictive covenants. The amount must be fair and in accordance with the salary of the employee, his/her position in the company, the agreements that the company intends to impose and the extent (period and territory) of the restrictive covenant.

    The law does not specifically regulate restrictive covenants. However, most restrictive periods range between 2 years to 5 years. However, under certain circumstances the court has enforced a 10 year post-termination restraint period, based on the business and the amount of consideration paid to the employee.

    Where an employee is in breach of an agreement, the employer can file a claim against the employee in court requesting compensation for damages. The complaint may include injunctive relief to stop the violation immediately. Alternatively, courts may declare the covenant null and void if it has been drafted too widely.

  • Waivers

    Pursuant to the LCL, any executed agreement that suppresses or reduces rights granted by the LCL, labor laws related to specific industries, collective agreements or individual employment contracts, either at the time of their agreement or execution, or the exercise of the rights arising from its termination, shall be null and void.

  • Remedies

    Discrimination

    Compensation is available as a remedy for discrimination or harassment. In case the event of a complaint based on harassment, the employee can file a claim requesting the payment of the statutory severance payment applicable to dismissals without cause and an additional amount for the pain and/or emotional distress caused by the harassment.

    Employers are liable for the acts of their employees. Therefore, the employer and the harasser will be declared jointly and severally liable for the payment of any compensation granted to the victim.

    Unfair dismissal

    Employees may challenge a dismissal without cause within 2 years of the dismissal and seek payment of statutory severance, plus interest and court fees. The complaint must be filed before the labor courts.

    Failure to inform & consult

    Not applicable for terminations as there are no consultation obligations.

  • Criminal sanctions

    Breaches of labor law do not entail a criminal breach or sanction unless such a breach or offense is specifically regulated by the National Criminal Code as a crime. In that case, criminal sanctions will be applied for the breach of criminal law and not for the breach of labor law.

  • Key contacts
    Osvaldo Jofre
    Osvaldo Jofre
    Cordova Francos [email protected]

Employee representation

Argentina

Argentina is a highly unionized country with approximately 3,100 active trade unions with considerable political power. There are unions in nearly all sectors or industries.

A trade union must be recognized by the Ministry of Production and Labor. Only recognized and authorized unions can enter into a CBA. Employers cannot recognize an unauthorized union voluntarily, not even for collective bargaining purposes.

The National Constitution sets out collective labor rights in its Article No. 14 (bis), guaranteeing unions the right to collectively bargain and the right to strike.

CBAs are very common in Argentina. There are different types of CBAs depending on the territory in which they are going to be enforceable. Some CBAs only govern employees within one specific company, whereas other CBAs govern employees performing certain activities in a geographical region or industry.

Australia

Under federal law, employees can choose to be represented by a union or not. As a consequence, any union validly appointed to represent an employee or employees must be recognized and dealt with according to the law. There are no employee representatives or works councils.

Austria

Trade unions are prevalent in almost every sector. Collective bargaining agreements are very common, including industry-wide collective agreements. Every employee in an applicable sector by law is a member of his or her trade union. Works councils are very common and may be established in every business with at least 5 employees.

Bahrain

Trade unions are permissible in Bahrain and employers are required to consult with them in the event that an employee is re-trained to perform different job duties from the work originally agreed upon. Employees are also entitled to strike in defense of their interests according to the Labor Law.

Belgium

Trade unions are prevalent. Approximately 50% of workers are members. Works councils have to be installed by social elections if the company has at least 100 employees. Committees for Prevention and Protection at Work have to be installed by social elections if the company has at least 50 employees. Industry level collective bargaining agreements, concluded within the joint committees (permanent bodies on the industry level in which an equal number of employers' federations and trade unions are represented and that have as their main task concluding industry-wide collective bargaining agreements and mediating in social conflicts) are common.

Brazil

Union representation is mandatory and all employees are subject to industry-wide collective agreements. Works councils are very uncommon. However, a new law, which became effective on November 13, 2017 (Law nº 13,467), provides for a commission of employees for companies whose workforce exceeds 200 individuals. The number of commission employees will depend on the size of the workforce, ranging from 3 to 7 members.

Canada

In Canada, the level of union density continues to decline, particularly in the private sector. Unions continue to have high levels of representation in the broader public sector, especially in certain traditionally unionized industries such as automotive, construction and transportation. Many businesses have no union or other worker representation. There are no works councils. Industry-level collective bargaining agreements are rare outside of certain industries in Quebec and the construction industry.

Chile

Chile recognizes the right of "freedom of unionization," which includes the right to be part or not to be part of a union.

Statutes regulate the processes and procedures necessary for the formation and management of unions.

Unions only represent its members during collective bargaining and in collective claims. In order to act in particular claims of its members, the union will need a mandate given by that individual.

Unions cannot act on behalf of non-unionized staff.

There are no works councils or similar employee representative groups.

China

Trade unions are prevalent in state-owned enterprises. In most cities, local regulations require employers to set up Employee Representative Councils (ERC). However, failure to set up an ERC is not subject to penalties. Many businesses have no union or other worker representation. Industry level collective bargaining agreements are uncommon.

Colombia

Trade unions are prevalent in certain sectors, including the sugar, railway, automotive, oil and mining industries as well as the public sector (especially education and energy).

A minimum of 25 workers is required to maintain or establish a trade union in Colombia, so that where the company employs at least 25 employees, the employees can establish a company level union. Only the employees can form a union.

There are no work councils or other employee representatives.

Czech Republic

Czech Labor law recognizes several types of employee representatives – trade unions, works councils and occupational health and safety representatives. Trade unions are most common (15% of employees are union members). Many businesses have no union or other worker representation.

Denmark

Denmark is characterized by a high level of unionization and there is a broad acceptance that the parties of the Danish labor market regulate and govern the labor market without any, or only minimal, government intervention. Therefore, it is left to the organizations to conclude collective agreements that regulate working conditions in individual workplaces. Collective agreements regulate areas such as salary, overtime payment, working hours, pension, termination of employment, supplementary training/education and other terms of employment.

All employers with more than 35 employees are legally obliged to establish an employee forum (a works council). The forum can be used to inform employees of matters of material importance to the employees. However, several collective agreements contain provisions enabling employees (or management) to request the establishment of a works council, and in this case, the terms of the collective agreement apply (provided it meets the minimum statutory requirements). The works council must consist of an equal number of employee and management representatives.

Employees may also elect members to the board of directors provided that 35 employees or more are employed, and that a majority of them request representation in the board of directors.

Finland

Trade unions are prevalent across all sectors, and 70% of Finnish employees are members of a trade union. Employees may be represented either by a shop steward elected based on the applicable CBA, or by a representative elected based on the Employment Contracts Act, as well as an industrial safety delegate in occupational health and safety matters. Employers must negotiate or consult with employee representatives, or the whole workforce if there are no representatives. There are no national works councils and the trade unions do not have a general right to information and/or consultation or co-determination rights. Employees do not have the right to participate in any management body of the employer.

France

Workers' delegates are mandatory in establishments with at least 11 employees.
A works council is mandatory in establishments with at least 50 employees.
A Health, Safety and Working Conditions Committee (CHSCT) is mandatory in establishments with at least 50 employees.

The recent Macron orders have merged the employee delegates, the Works council and the Health and Safety Committee into a single employee representative body referred to as Social and Economic Committee (Comité Social et Economique or CSE). A CSE must be put in place in all companies that reach a threshold of 11 employees for 12 consecutive months. The CSE's rights differ depending on the company's headcount.

A CSE must be implemented from January 1, 2018, provided that the employee threshold (see above) has been satisfied. However, where employee representative bodies already exist within the company, the CSE may be implemented on the expiry of the existing bodies' mandates, but by December 31, 2019 at the latest.

Union representatives may be appointed in establishments with at least 50 employees.

Since the implementation of the Macron Law in August 2015, companies with between 50 and 299 employees can set up a joint employee representative body (DUP) bringing together workers' delegates, works councils and the Health and Safety Committee, with the result that there will be a reduced number of representatives/protected employees. Although joined into a single representative body, the different members still retain their own prerogatives, but the information and consultation processes have been simplified. This option also exists in companies with more than 299 employees, subject to specific rules and a collective agreement. The DUP should be included in the CSE as from January 1, 2018 and from December 31, 2019 at the latest.

Virtually all companies are subject to industry-wide CBAs.

Germany

Works Council: The elected works council plays a major role in the everyday lives of larger German businesses. By law, employees in every business of at least 5 employees may form a works council at their own initiative. The works council has information, consultation and co-decision rights in the area of hiring, positioning and dismissals, internal organization of the business, restructuring and personal planning, among others. Employer and works council shall form works agreements to regulate the affairs of the business, except working time and remuneration, which are reserved for collective agreements with a trade union. Works councils may not call any industrial action.

Co-Determination on Supervisory Board Level: Companies with a regular workforce above 500 employees in Germany establish a supervisory board with 1/3 elected employee representation and a fairly limited scope of duties. If the regular workforce in Germany exceeds 2,000, 1/2 of the members of the supervisory board are elected employee representatives with a fixed list of duties. The chairman of the supervisory board is by law always nominated from the shareholder's side and has a casting vote, ensuring control by the business owners.

Trade Unions: 18% of the German work force are members of a trade union. Trade unions are prevalent in certain sectors (manufacturing, building, transport and the public sector). Trade unions deal with employer associations or individual employers. Once represented businesses agree on a collective agreement, those are widely used by other businesses as reference. Formation of collective labor organizations is a constitutional freedom, as is the right to avoid them.

Hong Kong

Although Hong Kong residents have the right and freedom to form and join trade unions, the level of employee participation in trade unions is relatively low and Hong Kong enjoys a relatively harmonious climate of industrial relations. Collective bargaining agreements are uncommon.

There are no employee representatives or works councils.

Hungary

Employees are entitled to establish trade unions within the work organization.

A works council may be elected where an employer employs more than 50 employees. If the number of employees exceeds 15 but does not reach 51, then a works council representative may be elected.

India

In India, the right to form a trade union flows from the fundamental right to freedom of association in the Constitution. Seven or more persons may form a union and apply to have the union registered. Indian trade unions are conferred the same status as a body corporate, enjoy perpetual succession and have a common seal; they may sue and be sued in their name.

IDA renders both employers and trade unions liable for penal sanctions in the event they engage in unfair labor practices.

A collective agreement is an understanding between workmen represented by their trade unions and employers. Under the IDA, it is unfair for a recognized trade union and employer to refuse to bargain collectively in good faith with the other party.

Indonesia

Any group of at least 10 employees can establish a labor union which will have the right to:

  • Enter into a Collective Labor Agreement with the employer
  • Represent workers in industrial disputes and at manpower institutions
  • Establish institutions (eg, cooperatives) or carry out activities relating to the improvement of the welfare of the workers
  • Carry out other legal activities in the area of industrial relations

Criminal sanctions can be imposed on anyone, including the employer, who engages in certain anti-union activity.

Ireland

Trade unions are prevalent in the manufacturing, transport and public sectors. Many businesses have no union or other worker representation and works councils are uncommon. Industry-level collective bargaining exists.

No right of recognition for a trade union.

Israel

Trade unions are prevalent in certain sectors (such as industry, transport and the public sector). Many businesses have no union or other worker representation; however, an employer may not object to the incorporation of a workers' union, and is required to negotiate with the union in good faith. Industry-level collective bargaining agreements are common in certain sectors (such as transport and the public sector). There are no works councils, but trade unions may be entitled to certain information and consultation rights.

Italy

All employees have the right to form, or become members of, labor associations, as well as the right to perform labor-related activities. On the initiative of the employees, a works council can be established in every plant with more than 15 workers within the trade union's associations that have executed the collective agreement applied in the company. Employees' representatives are granted certain rights (eg, additional protection in case of transfer and dismissal).

Most companies are subject to mandatory industry-wide collective bargaining agreements.

Japan

Labor unions are protected by the Constitution and by statute. All employees have the right to form unions.

Two types of collective agreements. Most common is a labor-management agreement, which is an agreement between management and either the representative of the majority of employees in the workplace or a labor union to which a majority of the employees belong. The second type is a collective bargaining agreement (CBA) which is between a labor union and an employer only. CBAs are not particularly common in Japan − the proportion of the workforce in Japan that is unionized has fallen below 20%, according to recent statistics.

There are no works or labor management counsels.

Kenya

Trade unions are popular with low-skilled staff and civil servants such as teachers, doctors, nurses etc. They are almost unheard of among the managerial staff of most private businesses.

Kuwait

Foreigners are not permitted to form any unions according to the Kuwaiti Labor Law.

Kuwaiti nationals are allowed to form or join a labor union, and only one labor union per sector is allowed to be formed in the country (ie, a union for engineers, a union for lawyers). Only associations expressly designated for an Islamic purpose, or granted legal status by the government, are permitted to meet openly and freely.

Luxembourg

Trade Union: Employees as well as employers are organized on a voluntary basis into a number of trade unions, trade and professional federations. Membership is optional.

Staff Delegation: A staff delegation must be set up in every business in the private sector employing at least 15 employees under an employment contract during the 12 months prior to the date on which the announcement of elections is made. Joint Works Councils in every establishment employing at least 150 employees, were abolished by the law of July 27, 2015, and their competences transferred to the Staff Delegation as from the  social elections, on March 12, 2019.

Staff delegation at the level of an Economic and Social Entity: several companies together form an "economic and social entity" when they have a shared management, identical and complementary activities, a community of employees working with the same interests and a comparable social status. Where such an entity exists, a staff delegation may also be established, when requested by at least two different companies forming part of the entity.

Malaysia

Employers and employees have the right to form trade unions, subject to the provisions of the Trade Unions Act 1959 and Industrial Relations Act 1967.

Only a small percentage (less than 10% of the total labor force) of employees in Malaysia are organized into trade unions. However, trade unions are very common and established in certain industries, such as banking, manufacturing, and plantations.

Mexico

Trade unions are prevalent in certain sectors, such as the sugar, railway, automotive, and mining industries, as well as the public sector (especially education and energy). Employers with more than 20 employees may have a union.

There are no works councils or other employee representatives.

Morocco

Trade unions are active in sectors like automotive, steel industry and manufacturing.

Companies with at least 10 permanent employees must elect employees' delegates. Non-compliance with the provision of the Moroccan Labor Code regarding election of employees' delegates may lead to a fine up to MAD 30,000.

Companies with more than 50 permanent employees must set up:

  • work committee and
  • health and safety committee.

Non-compliance with this provision of the Moroccan Labor Code, may lead to a fine up to MAD 25,000.

Collective bargaining agreements are uncommon.

Mozambique

Trade unions are prevalent in all sectors of activity in Mozambique. Employees have the right to form and belong to organizations of their choice, for the defense and promotion of their socio-professional and business rights and interests. No employee may be compelled to be a member of a union. Employers are not allowed to fund a union's activity. Unions may engage in collective and company-level agreements. There is a central union (industry-wide union), but at the company level there may be a union committee formed by employees of the company. This union will give its opinion on disciplinary proceedings, participate in salary negotiations, etc. In the absence of this union committee, the employer will have to go to the industry-wide union. This is to ensure the rights of the employees are protected regardless of the existence of a union committee at the company level. This is essentially the equivalent of a works council.

Myanmar

Labor organizations (that is, the labor organization of the employer's trade/establishment, which function as a union) represent employees in Myanmar. The employer must recognize the labor organizations relevant to its industry. If there are more than 30 employees, a Workplace Coordinating Committee (WCC) must be established. The WCC is formed by 2 elected worker representatives and 2 employer representatives. If a labor union is already active, then the worker representatives come from the union. The employer must assist as much as possible if the labor organization requests help. Labor organizations have the right to participate in collective bargaining on behalf of the workers. The employer must not discriminate against employees who are union/labor organization members. 

The labor organization shall decide who should be its representatives, who carry out negotiations with the employer on terms and conditions of employment and in settling the collective bargaining matters of workers in accordance with labor laws.

The employer must allow any worker who is assigned any duty on the recommendation of the relevant executive committee of a labor organization to perform such duty not exceeding 2 days per month unless otherwise agreed.

Netherlands

Trade unions are prevalent in a number of sectors. Works councils are common and have significant rights. If the company has 50 or more employees, the company is obliged to establish a works council. If there are more than 10 employees, but fewer than 50 employees, the company must create the possibility to meet with the employees twice a year. Industry-level collective bargaining agreements are common.

New Zealand

In New Zealand, an employee can choose whether or not to be part of a union. Any union validly appointed to represent an employee or employees must be recognized and dealt with according to the law.

Nigeria

It is a fundamental right to form or belong to a trade union of one's choice. The trade unions representing the employees sometimes negotiate conditions of employment for their members with the employers or the trade bodies representing the employers. The outcome of the negotiation is usually contained in a Collective Bargaining Agreement (CBA). The provisions of the CBA are generally non-enforceable by individual employees unless incorporated in the employment contract or policies.

There are no other forms of employee representation.

Norway

Trade unions are common. Requirements for safety representatives and environments committees apply. Several obligations to consult with the employees' elected representatives.

Oman

Yes, this is permitted under the Labor Law.

Philippines

It is the right of the employees to form, join or assist in the formation of a labor organization of their own choosing for purposes of collective bargaining through representatives of their own choosing and to engage in lawful concerted activities for purposes of collective bargaining, or for their mutual aid and protection.

Apart from unions, there are no works councils or other collective groups.

Poland

Trade unions

A single-establishment trade union can be formed either as:

  • A unit of a nationwide trade union or as
  • A new, separate trade union organization, upon a resolution on its establishment, passed by at least 10 persons entitled to establish trade unions

All employees and other individuals performing work (eg, civil law contractors) are entitled to form and join trade unions. Nobody may be discriminated against for being or not being a member of a trade union. Trade unions represent all individuals irrespective of their membership. In individual matters, trade unions solely represent the rights and interests of their members or of un-associated individuals upon their request. Employers have multiple, various obligations towards the trade unions operating at their entities. Trade unions are granted certain rights, in particular the trade union leaders enjoy special protection against dismissal.

Works council

Employees' representative body elected by the employees that may be established within a company that engages at least 50 employees, excluding state enterprises, mixed-capital entities engaging at least 50 employees, and public movie institutions. The employer has an obligation to inform and consult with its works council in matters specified by law. Special protection against dismissal for works council members.

Portugal

Employee representative bodies are permissible, but not mandatory. The employees of a company may take the initiative to set up the following representative bodies:

  • Works council: the members are appointed by the employees and their purpose is to represent the interests of the employees of that company. In most companies in Portugal there is no works council, the practice is that they exist only in major companies
  • Union delegates: elected by the employees affiliated with a specific union; there can be more than one union with representatives in a company
  • Security and health representatives: to supervise issues related to security and health; they are not common in Portugal
  • European Works Council (EWC)

Trade unions are prevalent in certain sectors. Industry-level collective bargaining agreements are common in almost all industrial sectors (such as automobile, chemical, transportation, automobile parts production, pharmaceutical, civil construction, metallurgy, etc.).

The employees' representatives are entitled to time off to exercise their duties, with payment (with some time limits) and may convene general meetings of employees to take place outside or inside the working schedule (in the latter case, for a maximum 15 hours per year).

The works council has some rights, such as: the right to obtain information on some matters of relevance for the company/employees; the right to consultation on some specific matters of relevance for the employees, as defined by the law, though the works council does not have the right of veto in respect to any employer's decisions; the right to meet periodically with the management; and the right to negotiate a collective labor agreement specific to the company, provided the unions representing the company's employees delegate that power to the works council, but this is not common.

Qatar

Trade unions/workers committees are not common in Qatar and are rarely formed, but they are permissible provided certain conditions are fulfilled. Employees in workers organizations may go on strike if an amicable settlement has become impossible and if they have complied with a number of Labor Law requirements.

Romania

The main employee representative bodies are:

  • Employee representatives
  • Trade unions

Works councils are not expressly regulated unless there is a European works council.

Collective bargaining agreements may be executed:

  • At company level (negotiated between the employer and the competent employee representative body)
  • At group company level
  • At sector (industry) level – here, an employer must be a signatory to such an agreement in order for it to apply to their employees (although extension to the entire sector is possible in certain circumstances)

Russia

Employees can be represented either by trade unions or by another employee representative(s). Under current laws, in order to create a basic trade union organization (or another representative body), it is sufficient to have 3 employees who should jointly decide to create a trade union, elect the union leader and approve the regulations. It is not necessary to register the trade union, as the trade union is deemed to have been created upon the adoption of all of the above decisions. There are no works councils.

Saudi Arabia

Labor unions are illegal in Saudi Arabia. "Worker's Committees" and similar organizations are also not permitted. Instead, the Ministry of Labor and the Labor Commissions have jurisdiction over safeguarding employment relations in the KSA. However, the ministry is in the process of establishing the general union of Saudi workers, which will include all Saudi employees. In general, these ministry labor unions are allowed for entities employing 100 or more Saudi employees.

Singapore

Trade unions are administered by the Industrial Relations Act (IRA), the Trade Disputes Act (TDA) and the Trade Unions Act.

The IRA regulates relations between employers and employees and provides the legal framework to prevent and settle trade disputes by collective bargaining, conciliation and industrial arbitration. Individual disputes fit within the definition of trade disputes under the TDA. The TDA defines illegal industrial action and illegal lock-outs and provides penalties for the same.

Collective agreements are common in Singapore within specific industries, such as transport and manufacturing. Even where a trade union has been statutorily recognized but no formal collective agreement has yet been entered into, disputes may potentially still be referred to the Industrial Arbitration Court and decided in accordance with principles of equity and fairness (rather than strict contractual principles).

Slovak Republic

Trade unions are prevalent in certain sectors (public sector, health services, manufacturing). Many businesses have no union or other employee representation. Works councils may operate in businesses with at least 50 employees. In businesses with at least 3 employees and no more than 50 employees, an employee trustee might be in place.

Where they exist, a works council or employee trustee is entitled to joint decision-making (in the form of agreement or giving prior consent) only insofar as the working conditions or employment conditions for which joint decision-making with the works council or employee trustee is required are not already regulated by collective agreement.

South Africa

Employees are constitutionally entitled to join a trade union, to be represented by such trade union, and to strike. Industry-wide collective bargaining agreements may be concluded, which apply to parties in a bargaining council (a body formed by organized labor and organized employers for a particular sector, which forms the forum for industry wide collective bargaining). The result is an extensive framework of collective bargaining, organizational rights, collective agreements and bargaining councils that play a central role in most commercial and employment activities.

South Korea

Employees have the right to establish and operate trade unions, and collective bargaining will have binding legal effect.

Each workplace with 30 or more employees must have a Labor Management Council (LMC). LMCs are composed of an equal number of members representing employers and workers, and there shall be no less than 3 and not more than 10 members.

Spain

Both trade unions and works councils occupy a preeminent position in Spanish labor law. Industry-level CBAs are very common. They may co-exist with CBAs agreed at a company level.

In companies with 11-49 employees (or in companies with 6-10 employees if requested by the majority of employees), employees can initiate elections to choose personnel delegates; in companies with 50 or more employees, they can hold elections to a works council. Personnel delegates and works councils have the same rights. The company cannot initiate such elections (but also cannot hinder employee rights in that regard).

Sweden

Sweden has a high rate of trade union affiliation among employees, totaling around 75-80%. The Co-Determination Act (medbestammandelagen) consists of rules regulating collective agreements, rules of procedure regarding negotiations, consultations and employee representation. Pursuant to the Co-Determination Act, both employees and employers have the right to belong to an organization of employees or employers and to exercise the rights of membership in such organization. The right of association may not be infringed upon. Collective bargaining in Sweden is centralized, and historically, bargaining in the private sectors has taken place on three levels: national (between the Confederation of Swedish Enterprises and the employee federations); industry-wide (between industry-wide organizations on both sides); and local (between the company and the local union). Legally binding agreements are concluded at all levels of bargaining. Traditionally, the industry-wide level has been the focus of bargaining, and there are industry-wide collective agreements in almost every sector of the Swedish economy.

The concept of works councils is not recognized in Sweden (besides European Works Councils). Instead, employees' influence is safeguarded by the trade unions.

Switzerland

Workers are entitled to elect a representative in companies with more than 50 workers. Trade unions are prevalent in certain sectors. Industry-level collective bargaining agreements are common. Trade-union arbitrators often act as conciliators when there is a collective labor dispute.

Taiwan

Unions are allowed, but highly regulated. 30% of the labor force are union members.

For businesses with more than 30 employees, which are regulated by the LSA, it is mandatory to have a labor management council. In practice, however, these councils are rarely used, because many larger corporations have unions instead.

Thailand

Employees representative in a welfare committee

Under the LPA, in a place of business with 50 employees or more, an employer must arrange for the establishment of a welfare committee comprising at least five employee representatives.

Employee committee

Under the LRA, in a workplace of 50 or more employees, the employees may establish an Employees' Committee. The employer must organize a meeting with the Employees' Committee at least once every 3 months or upon the request of more than one-half of the Employees' Committee members or the labour union. The purpose of the meetings is:

  • To provide for employees' welfare
  • To consult about working regulations which may be beneficial to the employer and employees
  • To consider any complaints by the employees
  • To compromise and settle disputes in the workplace

Employees representatives

Under the LRA, any request by employers or by employees to make or amend a working conditions agreement must be made in writing to the other party. If employees submit the request, it must specify the names and signatures of the employees supporting it, which must be not less than 15% of the total number of employees who hold interest in such a demand. The employees have the right to elect representatives (no more than 7 people) to participate in negotiations about working conditions.

Labor union

The LRA contains detailed provisions on the duties, formation and powers of labor unions. Certain rules and requirements need to be satisfied by officials before a labour union can be recognized. The labour union can assist in requesting the creation or amendment of a working conditions agreement, settling disputes, acknowledging arbitral awards and in employee strikes.

Turkey

A trade union − representing at least 1% of the employees who are engaged in a given branch of activity and more than half of the employees employed in the workplace of a company or, if there is more than 1 workplace, 40% of the employees employed in all workplaces of the company at the enterprise level − shall have the power to conclude a collective bargaining agreement covering the workplace or workplaces in question.

Apart from the union's workplace representatives, work councils or employee committees are not regulated under the Law on Unions and Collective Bargaining Agreement. The union's workplace representatives are appointed by the union, which is authorized to execute a collective bargaining agreement and appointed from among the employees working in the workplace who are members of such union. If there are up to 50 employees − at least 1 representative; 51 to up to 100 − 2 representatives; 101 to up to 500 − 3 representatives; 500 to up to 1,000 − 4 representatives; 1,001 to 2,000 employees − 6 representatives; more than 2,000 − 8 representatives can be appointed.

Uganda

Labor unions are prevalent in certain sectors (manufacturing, transport and the public sector). Many businesses have no union or other worker representation. Works councils are uncommon. Industry-level collective bargaining agreements are uncommon.

Ukraine

Local trade unions or employees' representatives are elected at the general meeting of employees and act as employees' representatives. There is no minimum headcount before employees can create a trade union. In practice, trade unions are usually not elected in small companies, and they are more influential for mid-sized and large companies (especially for those using special working regimes and have special conditions of work).

Trade unions must be notified, and in some cases must consent / approve, before employers take certain employment actions, including redundancy, dismissal of a trade union member, introduction of an unusual working regime, etc. On the other hand, elected employee representatives have limited authority as compared to trade unions.

Under Ukrainian laws, each Ukrainian entity that has employees must conclude a collective agreement with its employees. Such agreement is negotiated by a trade union (if it exists) or employee's representatives and, after it is approved by all parties, must be registered by local government.

There are no work councils.

United Arab Emirates

No employee representation exists. Membership in an unauthorized trade union and industrial action are both criminal offenses for which an individual could be fined and imprisoned, and, in the case of expatriate workers, deported.

United Kingdom

Trade unions are prevalent in certain sectors (manufacturing, transport and the public sector). 25% of workers are members, but most are employed in the public sector. Many businesses have no union or other worker representation. Works councils are uncommon. Industry-level collective bargaining agreements are uncommon.

United States

Trade unions are common in certain sectors. The US private sector had a unionization rate of 6.4% in 2018, compared with 6.5% in 2017. Employees' rights to organize and engage in "concerted activity" regarding their terms and conditions of employment are protected under the National Labor Relations Act (NLRA), whether or not they belong to a union or work in a unionized workplace.

Venezuela

Every employee has the right, without previous authorization, to form or affiliate a trade union, with functional autonomy and protection by the government. Trade unions are common in large or medium companies (more than 500 employees).

Vietnam

Trade unions act as employee representatives in Vietnam. The employer is responsible for encouraging and providing favorable conditions for the establishment of a trade union within the workplace. Trade unions participate in the improvement of social legislation, represent workers in the negotiation and execution of collective agreements, and assist in labor disputes. An employer is prohibited from being prejudiced against employees based on their participation in a trade union.

Employers are not obliged to establish a trade union, but they are supposed to create a favorable environment for their establishment. In order for a trade union at enterprise-level to be established, five or more employees have to unite and request recognition by the higher-level union. Employees who are trade union officers may conduct trade union activities during working hours. Such employees have specific protection against termination of their employment. All employers and enterprises, regardless of wheter a trade union is established or not, including foreign-invested enterprises, must pay into the trade union fund at a rate of 2% of their payroll. This trade union fee paid by the employer is a permissible deduction when assessing corporate income tax.

In practice, production companies tend to have a union, whereas service companies do not.