A three-month freeze on two labor reform articles
Judge Martín Cormick, head of Federal Administrative Court No. 11, suspended the application of articles 10 and 56 of Law 27.802, the labor modernization law passed by Congress in February, for three months. The ruling, issued on Wednesday, keeps articles 20 and 277 of Law 20.744, the prior labor legislation, in force. Cormick is the same judge who imposed daily fines on the government for failing to comply with the university financing law.[S1][S2]
The challenged provisions set what the ruling describes as unfavorable conditions for lawyers representing workers in cases against the state or companies. They reduced fees through caps, allowed payment in up to 12 installments, and extended liability for litigation costs, including court fees, to the lawyers themselves. Under the previous legislation, the losing party had to cover those costs.[S1]
The case began with a challenge from representatives of 32 bar associations from the interior, led by the Villa María bar association, whose head, Itatí Demarchi, was a candidate for the Judicial Council on the ticket backed by the Justicialist Party in the October 20 election. The only group from the Buenos Aires City bar association that joined the amparo was Por más abogacía.[S1]
Uncertainty over fees and cost liability
In his ruling, Cormick justified the injunction by pointing to a lack of clarity in the law, which he said forces interpretation of whether fees are included in the legal authorization. He noted that while fees are not part of the condemned capital, they do form part of the costs and are included in the judgment. This, he wrote, establishes the plausibility of the right claimed by the lawyers represented in the case.[S1][S3]
The judge also reviewed Law 27.423 on the collection of regulated fees, whose article 54 requires judicially regulated fees to be paid within ten days of the resolution fixing them becoming final. The injunction will last until a definitive sentence is issued or for three months, whichever comes first. It does not declare the reform unconstitutional but keeps the challenged provisions suspended while the case proceeds.[S3]
The measure also names the Justice Ministry as an intervener because of the connection between this process and case No. 13564/26, so that the ministry can be notified and its right of defense ensured. Government lawyers are expected to appeal the decision.[S1]
Background of the labor modernization law
The labor modernization law, promoted by President Javier Milei's government, was intended to speed up formal, quality employment and curb a litigation industry that officials said discourages investment and hiring. On June 1, the executive branch regulated the law's central points through Decree 407/2026, published in the Official Gazette, setting the scope and application of various articles of the Labor Contract Law. The decree addressed employment registration, pay slips, medical leave, termination agreements, and the start of retirement procedures.[S1]
