An Argentine court on Tuesday overturned labour rules proposed by President Javier Milei that would make it easier to sack workers, in a new blow to the leader’s efforts to shake up regulations that he says have hampered the country’s struggling economy.

The appeals court already temporarily suspended the incoming president’s new regulations in early January after a legal challenge brought by the main union group, the General Labour Confederation.

The three-judge panel ruled on Tuesday that the regulations were unconstitutional, saying that Mr Milei’s government went beyond its authority to decree them and that they first need to be approved by Congress.

The latest ruling can be appealed before the Supreme Court. Mr Milei’s administration did not immediately say whether it would do so.

Mr Milei in December announced a decree that would make several changes to labour rules, like increasing job probation from three to eight months, reducing severance compensation and allowing the dismissal of workers who take part in blockades during protests.

Argentina’s president, who describes himself as a libertarian and anarcho-capitalist, has promised to drastically reduce state spending to shore up a government budget deficit that he says is fuelling inflation, which finished 2023 at 211%.

Since his inauguration December 10, Mr Milei has devalued the country’s currency by 50%, cut transport and energy subsidies, and said his government will not renew contracts for more than 5,000 state employees hired before he took office.

The measures and proposals have stirred protests in Buenos Aires, Argentina’s capital.

Last week, the president faced a one-day general strike, organised by the biggest union, but some government officials downplayed the effects of the protest.