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President Javier Milei faced a judicial blow in court on Wednesday when three judges suspended the labour rule modifications he recently introduced as part of a plan aimed at deregulating Argentina’s struggling economy.

The legal battle was filed by the General Labour Confederation, the primary union group, which pleaded on the fact that the announced changes impinged on workers’ rights.

In December, Milei’s decree involved more than 300 regulations, such as extending the probationary period for jobs from three to eight months, reducing severance compensation, and allowing the possibility of dismissing workers participating in blockades during certain protests.

Judge Alejandro Sudera, part of the judge panel, argued that the administration exceeded its authority in unilaterally decreeing labour changes without prior discussion and approval by Congress.

Milei’s government said it would appeal the court’s ruling.

The union confederation applauded the ruling, characterising it as a halt to regressive and anti-worker labour reforms. 

Critics, including labour activists, questioned Milei’s ability to implement such measures using emergency decrees to bypass legislative approval. 

The self-described anarcho-capitalist and libertarian economist took office on December 10, expressing his will to transform Argentina’s economy, by easing government regulations and permitting the privatisation of state-run industries.

These initiatives sparked protests in Buenos Aires, the capital of Argentina. Since coming into office, Milei has devalued the national currency by 50 %, reduced subsidies for transport and energy, and declared that contracts for over 5,000 state employees hired before his tenure will not be renewed.

Milei says he wants to reshape Argentina’s economy and shrink the size of the state to combat rising poverty and address an anticipated annual inflation rate of 200 % by the end of the year.