President Cristina Fernández de Kirchner announced yesterday that she will send a proposal to Congress today amending the current Work Injury Law that modifies the terms by which workers seek compensation for work-related injuries.

During the same appearance, the president also announced a decree that permits the establishment of not-for-profit workers’ compensation insurance collectives.

President Fernández explained that the reform is intended to increase competition in the workers’ compensation field. “There was a very important demand from the whole society because it was created to give greater competitiveness to the whole economy,” she said.

The measure establishes “opción excluyente”, which specifies that an employee seeking compensation must either choose a pre-established settlement indemnity issued by a private insurer (ART) or take legal action. Previously, victims could first collect from an ART and later pursue legal action as well if they felt entitled to greater compensation. In addition, civil courts, which generally offer lower settlement awards and longer arbitration times, will now handle workers’ compensation cases. Such cases were previously seen in labour court.

Furthermore, the proposal stipulates that employees now have a maximum of 15 days after sustaining an injury to submit a compensation claim.

The reform also raises the set rate of settlement compensation by 20% and establishes a schedule for future adjustments. The rate will be adjusted each semester according to the Ripte Index estimated by the Ministry of Labour. To compensate for increased compensation rates, the reform includes a cap on lawyers’ fees at 20%. Typical fees currently stand around 35-40%.

In the same appearance, President Fernández announced a decree allowing the establishment of not-for-profit work-related injury insurance providers by unions. She noted that they were intended to compete with ARTs.

ARTs currently collect compensation from 550,000 companies on behalf of 8.7 million employees. There are an estimated 550,000 accidents per year.

The ART Union described the reform as “a great step towards solving the problems afflicting the Labour Risks system.”

The president also reminded her audience that the Work Injury Prevention Law is still pending and predicted its resolution to be a challenge. “The longer and more complex debate will come later with the topic of accident prevention,” she concluded.