08/04/2014 - Por Zabalúa, Gonzalo
Recently the National Labour Court of Appeals, through an internal ruling (Act No. 2601) issued by a joint session of all its panels, modified the interest rate that had been applied to labor cases brought before the National Labour Courts of the City of Buenos Aires since 2002 (active lending rate applied to thirty days discount operations published by Banco Nación Argentina). The court determined that the new applicable interest rate shall be the annual nominal rate applied by the Banco Nación Argentina for personal consumer loans of 49 to 60 months. The internal ruling further established that this new rate shall be applied to both new and pending cases.
The judges evaluated that: "(...) the employee is not a lender, and therefore he should not see his credit reduced as a result of economic developments (...)". Consequently, judges understood that the traditional active lending rate (which in September 2013 was 1.55% per month and was raised in February 2014 to 2.05% per month) was insufficient in order to maintain the purchasing power of the labor credit.
The new current rate (annual nominal rate applied by the Banco Nación Argentina for personal consumer loans of 49 to 60 months) currently provides a monthly interest rate of 3%, which results in a 36% annual interest.
This new rate will be applied to all labor claims to be initiated in the future, even in the case that the amounts claimed were originated before the issue of the internal ruling (Act No. 2601). It further established that the new rate shall be applied to all pending labor lawsuits.
Therefore, this increase in the benchmark interest rate applicable to judgments processed shall have a significant impact on the valuation of liabilities and labor contingencies of the companies related to existing claims pending before the National Labour Courts of the City of Buenos Aires.