BUENOS AIRES: Argentina’s government is scaling back and delaying a planned labour reform after pressure from union leaders and a violent protest over changes to pension laws late last year.

Measures will be split into two or three bills to be sent to Congress from March, once the government has negotiated with opposition Peronists and with powerful union leaders, two government officials said.

President Mauricio Macri had promised more immediate and drastic changes to the country’s labour laws, widely seen as among the most costly to companies in Latin America, after his business-friendly coalition performed unexpectedly well in October’s mid-term elections.

But he still does not have a congressional majority and has responded carefully to recent hostility from unions. The government now seeks a piecemeal approach to labour reform, one of the main factors that has held back investment in Latin America’s No. 3 economy.

“There are some unions that are working and that have understood we have to gain productivity and competitiveness,” Macri told Reuters in an interview last week in Davos, Swtizerland, citing workers in a key shale producing province as an example.

“And there are others that don’t understand that there’s been a change and that the citizens demand from them cooperation.” Unions had broadly backed some of Macri’s measures since he took office in late 2015, but the relationship has deteriorated in recent months.

Macri’s government has threatened to cut funding for some unions and audited some of their finances. The judiciary has charged and even jailed some important union leaders on corruption accusations.

Unions on the other hand have accused Macri, a scion of one of Argentina’s wealthiest families, of persecuting workers in a country where support for labour rights is historically strong.

In a public letter to Macri this week, Hugo Moyano, head of Argentina’s largest umbrella union the CGT, issued a searing critique of the government and a new pension reform, which spurred violent protests before it passed Congress in December.

The government has “gravely injured millions of retirees... who have worked with dignity their whole lives and do not have the possibility of enjoying a comfortable retirement like your father,” Moyano wrote.

Reuters