The supreme court orders regulation of workplace daycare

In the matter of “Etcheverry et al v National State” regarding Act No 16.986, the Supreme Court has ordered the Executive Power to regulate Section 179 of the Employment Contract Act 1974 (LCT, for its acronym in Spanish), whereby companies with a minimum number of workers to be determined through the applicable Regulation shall set up on-site child care facilities for employees’ children meeting eligible age requirements and other conditions that will be established in due course (Supreme Court of Justice of Argentina, October 21, 2021).

This action was filed in 2015 by students from Clínica Jurídica Austral and professors at Universidad Austral with children eligible for this office perk, which has not been regulated yet.

As a matter of fact, the action was supported by CLADH (Latin American Center for Human Rights), Professors Juan Bautista Etcheverry and Ximena Liggerini, seeking regulation, as informed by said University.

The jurisdiction of the Federal Court of Appeals in Administrative Matters was questioned and rejected by the Lower Court on the grounds that it was not an urgent matter. In February 2017, the Court of Appeals revoked the Lower Court ruling, ordering the Executive Power to regulate Section 179 (LCT). The ruling was appealed by the Department of Labor through an extraordinary remedy, and when the extraordinary appeal [recurso extraordinario] was denied a new direct appeal was filed [recurso de queja] with the Supreme Court. Finally, the Court confirmed the ruling unanimously. Highton de Nolasco and Rosenkrants agreed with Maqueda and Lorenzetti as did Rossati.

The issue of workplace daycare has been a controversial matter since the passage of the Employment Contract Act (1974), because it requires a considerable investment from companies required to open on-site daycare centers when they plan company offices.

In some provinces, regulations have been passed allowing on-site daycare centers to be replaced by stipends paid by the company to pay for duly documented daycare services.

Indeed, subsection f of Section 103 bis (LCT), which was added in 1997, provides that stipends are not part of employees’ pay, meaning that they are non-salary benefits and require supporting documents as evidence of the expenses incurred in daycare services for children under 6 when the company does not have on-site centers for reimbursement.

Childcare is essential for working women, not only for those who are breastfeeding but also for those who need someone to look after their younger children while they are working. It is a way of encouraging family integration and providing support and coverage to younger children, whose rights are enshrined in the Constitution and international human rights treaties that protect children and mothers.

This is a rather sensitive issue; it is vital for women to be able to enjoy these benefits, considering the egalitarian principles contained in the National Constitution that should be observed.

In fact, by the express application of Act No 23,592, whereby whoever arbitrarily prevents, obstructs, restricts or in any way undermines the full exercise of the fundamental rights and guarantees recognized in the National Constitution, on an equal basis, will be obliged, at the request of the injured party, to stop discrimination or any discriminatory conduct and repair the emotional or physical damage caused.

​In addition, for the purposes of this Act, “discrimination”, whether by act or omission, on grounds of race, religion, nationality, ideology, political or union opinion, sex, economic position, social condition or physical features will be particularly considered.

Collective bargaining agreements already deal with both options: on-site daycare centers and stipends to cover outsourced daycare services with supporting documents.

However, several issues have arisen, including the high expenses of daycare facilities, the operational costs to pay the staff that provides childcare, civil liability for any damage caused at the daycare center, coordination of work schedules and shifts. This situation gets worse because of a shortage of available daycare centers provided by unions, civil society or third parties, and the obligation to submit invoices for daycare services.

In Brazil, on-site daycare centers have been created as micro-enterprises promoted by the State, as a source of job creation, for single taxpayers and with reduced taxation and social security contributions. And registered receipts by
domestic workers have been accepted as evidence of daycare services for children under 5, which helped increase employee registration in the sector.

Regulation should be enforced by the Department of Labor and the Legal and Technical Secretariat of the Presidency of Argentina, in an attempt to protect families, women and children, but each and every administration since 1974 has analyzed and then disregarded this issue for no good reason.

It would be convenient to take into account the high costs of these services at company facilities, a possible replacement with outsourced nearby daycare centers, their promotion as micro-enterprises and the authorization of registered domestic service as an option to daycare for children under 5 or 6.