Ratified treaties;¹ Instruments not subject to ratification;² Work of international supervisory bodies³

Concept and legal nature of the remuneration/ Food vouchers as part of remuneration/ Social benefits to workers/ Direct resolution of a dispute on the basis of international law

A worker brought an action to have the food vouchers given to him by his employer included in the calculations of the compensation package he was due for unfair dismissal because he considered that they formed part of his remuneration. The decision of first instance upheld his application but it was reversed by the National Labour Appeal Court. This Court maintained that the calculation had been based on a law handed down by Congress, which authorised employers to grant certain social benefits to workers with the aim of improving their quality of life without this counting towards their remuneration. The Court also stated that the law did not infringe the Constitution.

The Supreme Court nevertheless distanced itself from the above premise, clarifying that the matter did not hinge on whether the law-maker could not provide for the possibility of providing 'social benefits' but rather that this could not be used for changing “the intrinsic legal nature of the payment”.

The Court examined the constitutional validity of Article 131 of Act 24,700, used as grounds for the social benefits’ and for excluding their inclusion as part of the remuneration package. To conduct its examination, the Court drew on Article 14 of the Constitution and the principle of protection enshrined in it and related it to various international instruments, pointing out that these contained the rights that should be respected by the law-maker. The Court stated that “the legal nature of an institution shall be fundamentally defined by its constituent elements, irrespective of the name given to it by the law-maker or individuals” and referred to sources including the American Declaration of the Rights and Duties of Man, the Universal Declaration of Human Rights, the International Covenant on Economic, Social and Cultural Rights (specifically to Articles 6 and 7) and to the ILO Declaration of Philadelphia of 1944. The Court concluded from this analysis that the food vouchers did effectively amount to remuneration for the worker:

“Attention must be focused on Articles 6 and 7 of the ICESCR because, since they are “interdependent”⁴ they lay down, with all-embracing simplicity and eloquence, decisive guidelines for clarifying this problem of categorization and hence resolving the case under dispute. In effect, given that the first provision states that the right to work “includes the right of everyone to the opportunity to gain his living by work [...]” (point 1, Italics added), and the second classifies as ‘wage’ or ‘remuneration’ the payment due by the employer to the employee when the above-mentioned opportunity is within the context of an employment relationship; it must be concluded that it is inconceivable for any payment, such as the food vouchers in question, that unambiguously amounts to an 'earning' for the plaintiff and that equally clearly is only motivated or arises as a consequence of the said contract or employment relationship, to fall outside the scope of the above terms.”

The Court stated that the content of the constitutional guarantees could not be changed by the will of the law-maker or of the employer. It pointed out that the framework of reciprocity of the employment contract must be ruled by the principle of social justice and that everything concerned with wages transcends the limits of labour market rules and makes the wage subject to the higher needs of protecting personal dignity and the common good. The Court made a comment about social justice, in which it referred to the ILO Declaration on Social Justice: 

“The value that has continually guided the ILO from the very moment it was established (Treaty of Versailles, Section I, first paragraph) to the present day and that was re-affirmed in the recent ILO Declaration on Social Justice for Fair Globalisation (adopted in Geneva, 10-06-2008) as a way of facing up to the challenges of the 21st century is none other than social justice.”

The Court added that a definition of remuneration under the Argentine legal system “could not in any way be understood to be less far-reaching than the definition contained in Article 1 of ILO Convention No. 95⁵ on protection of wages” and for this reason deemed it appropriate to refer to the repeated comments that have been directed at the government by the ILO Committee of Experts on the Application of Conventions and Recommendations since 1995, which have specifically referred to the article in question:

“(…) The international body, moreover, persisted with or followed through the criticisms that it had levelled in 1995, at the non-remunerative benefits in Decrees Nos. 1477 and 1478 of 1989, and 333 of 1993, "to improve the nutrition of the worker and his family", concluding that "there was a connection between the benefits designed to improve the nutrition of workers and their families and the work performed or service provided by virtue of a contract of employment. These 'benefits' — it continued — however they are termed (bonuses, supplementary benefits, etc.), constitute components of remuneration in the sense of Article 1 of the Convention.

(…)

In its previously mentioned comments of 1998 and 1999, the international body went on to state that it "note[d] with regret that this new legislation [Article 103bis of the LCT (Act on Labour Contract) according to the text of Act No 24,700] brings the situation back to that of discrepancy with the requirements of the Convention", which it had repeatedly mentioned with regard to Decrees Nos 1477 and 1478 of 1989, and 333 of 1993.”

¹ ILO Convention on Protection of Wages, 1949 (No. 95); International Covenant on Economic, Social and Cultural Rights, 1966; Preamble of the Charter of the Organisation of American States, 1948; American Convention on Human Rights (“Pact of San José, Costa Rica”), 1969; Additional Protocol to the American Convention on Human Rights in the Area of Economic, Social and Cultural Rights (“San Salvador Protocol”), 1988.

² ILO Declaration of Philadelphia, 1944; Universal Declaration of Human Rights, 1948; American Declaration of the Rights and Duties of Man, 1948; ILO Declaration on Social Justice for a Fair Globalization, 2008.

³ ILO Committee of Experts on the Application of Conventions and Recommendations.

⁴ As established by the Committee on Economic, Social and Cultural Rights in General Comment No. 18, The Right to Work, 2005, E/C.12/GC/18, Para 8.

⁵ Article 1: “In this Convention, the term wages means remuneration or earnings, however designated or calculated, capable of being expressed in terms of money and fixed by mutual agreement or by national laws or regulations, which are payable in virtue of a written or unwritten contract of employment by an employer to an employed person for work done or to be done or for services rendered or to be rendered”.