In the ups and downs to which the “macro” configuration of our economy has accustomed us, the balance was a higher inertial inflation rate, the stagnation of private employment and a higher floor of structural poverty, as measured over these years by the Social Debt Observatory of the UCA.
Manuel Mera, director of CIPPEC Social Protection points out that since 2010 Argentina has been experiencing stagnation in the creation of private registered employment and a structural change towards lower productivity activities. Thus, as highlighted in its CIPPEC report, the number of formal employees remained almost the same, which reduced their weight within the total number of employed people from almost 60% to less than 50%. Furthermore, in parallel, the manufacturing sector lost share and retail trade and other low-productivity services grew; Monotributistas (64%) and informality increased, consolidating Argentina among the countries with the greatest drop in labor productivity in the region. “Overall, the trend reveals that the country is not able to grow economically or in terms of employment”Mera emphasizes.
Besides. It is likely that this paralysis of formal employment and especially private employment has triggered other ways of generating professional niches that, sooner rather than later, increase labor costs and threaten productivity. This is precisely the battle that finds consensus between ruling parties and opponents to increase labor demand and also be able to increase the quality of employment. But when we go down to the realm of policies to do so, the true acid test to locate the priority that development has in the praxis of each administration, delays and divergences appear.
In a recent report by Laura Caullo, responsible for the Social-Labor section of the IERALit is highlighted that labor litigation once again became a factor that conditions the generation of formal employment. The data show a return to levels of judicialization close to those that motivated the last reform of 2017 (law 27,348). “The evolution of the system once again exhibits a disconnection, showing fewer claims, but more lawsuits, which generates operational uncertainty, increasing costs for companies and pressures on insurance rates.” comments Caullo.
The focus, unlike what happened at the beginning of the work risk system, was no longer the accident rate due to work accidents, which, according to numbers from the Labor Risk Insurance Union (UART) fell 80% from the beginning. This translated into fewer deaths due to work-related events, conditions and disabilities. However, at the same time that the accident rate due to work-related accidents and illnesses decreased, litigation increased.
The procedures applied in provincial courts to carry out medical examinations are central to understanding the problem. In several provinces there is still a scheme in which the judicial expert arises by drawing lots from a list of doctors registered to carry out examinations. In some cases—although not in all—the fees of judicial experts are not set based on the work performed, but rather are calculated as a percentage of the determined disability, which generates a systematic tendency toward overdiagnosis.
yellow alert. Recently the National Insurance Superintendency ordered a general inhibition of assets Galen ART until it presents a plan for the regularization, sanitation and integration of its capital. It is just the tip of the iceberg in a major problem for the sector that is taking on the characteristics of an acute economic crisis due to the exponential growth in the number of lawsuits filed against ART alleging work disabilities. In a recent report by IDESAhighlight that it is very paradoxical that, in the last 20 years, the accident rate dropped from 68 to 33 workplace accidents per 1,000 workers, while litigation went from 1 to 13 lawsuits per 1,000 workers. According to the Superintendency of Occupational Risks (SRT), almost 8 out of every 10 cases that go to trial are evaluated by the SRT medical commissions as “non-labor” or as “labor without disability.” But then, in the provincial courts, the official experts determine that they are labor-related, with an average disability rate of 13%. “The dispersion between provinces and even between different courts within the same province is enormous, which are solid indications that medical experts apply subjective criteria to evaluate occupational damage,” the president of IDESA, Jorge Colina, completes the table.
The question that follows is not whether it has an impact but what its magnitude is on the costs of the system. According to data from the Union of Occupational Risk Insurers (UART), the average rate is almost 2.9% of the gross salary and the flow of lawsuits is more than 10 thousand claims per month. But, as IDESA points out, said The flow of lawsuits has different impacts: the cost of the lawsuits themselves amounts to 0.6% of the salary; The cost of fees for lawyers and official experts amounts to 0.1% of the salary and the administrative and tax costs of the trials generated within the ART, amount to 0.3% of the salary..
Inequality. The Argentine system evolved over the years and presents accident rates similar to Spain and Chile, for example. This has a lot to do with the insurance architecture of the system, the implementation of specific standards and executors with defined roles. However, when the litigation rate is compared, it is 15 times higher than the Spanish rate and 21 times higher than the Trans-Andean rate.because of the so-called “trial industry.” After the last modification to the occupational risk law, There were 18 provinces that joined the system, thus accounting for almost 98% of the cases. But there are few that have gone one step further to provide the (provincial) justice system with what the sector has requested: medical evaluation commissions.
with full-time official experts instead of professionals registered on lists whose fees are directly linked to the amount awarded by the courts. At the UART they cite as an example the case of Salta, which did do these “duties” when confronted with its neighbor Jujuy, which is in debt and the results are visible. In this last province, litigation is 38 times higher than what occurred in Salta. Or the case of Entre Ríos, which thanks to an interest rate that increases the update by the RIPTE (registered salary index) by 12% annually, the judicial cost exceeds more than double the proportional expense incurred in the neighboring province of Corrientes.
With the current trials, in the projections made by the UART, The technical rate should rise to 3.5% of the salary, but if we add the disproportionate rates With current trials and the disproportionate rates, it would rise to 5.15%. On the other hand, with marginal litigation (“normal” in other jurisdictions), it could drop to 2.19%.
Mara Bettiol President of the UART warns that no labor reform – whatever its scope – will be able to meet its objectives if the Occupational Risk System continues to be subject to this judicial dynamic. “There is no modernization possible when a sprain can lead to a sentence equivalent to the value of an SME. Legal predictability is not an accessory condition: it is the very core that allows investing, contracting and producing”, he concludes.
