Employment 2021

Last Updated September 07, 2021


Law and Practice


Lizama Abogados specialises in labour law and social security, and was founded by Luis Lizama Portal in 2006. The firm has its office in the city of Santiago and has 12 lawyers specialising in the labour area. The firm is recognised for providing legal and strategic advice in complex collective bargaining, highly complex labour lawsuits, and labour issues that affect a company's human resources management, with difficult solutions. In the last year, the firm has begun to provide professional compliance services in labour investigations and legal advice in new technologies in fields related to labour law. The firm provides professional services to national and foreign companies in all sectors of economic activity, particularly mining, finance, commercial, industrial, energy, agriculture, transport, telecommunications, entertainment, construction, services companies, tourism, media, scientific research, universities, health, ports, charities and public services.

As will be reviewed, most of the legislative changes and measures have been founded on improving, extending or expanding the forms of protection against the COVID-19 crisis.

Out of that context, the most important changes in labour regulations are found in processes of "modernisation" of business management. Through Law No 21.327 (2021), companies are obliged to digitise labour documentation and make it available on the site of the Labor Supervisory Authority (public service in charge of interpreting and supervising the labour law) in order to make remote control processes, having to keep a copy of all employment records in digital format. Additionally, the Labor Supervisory Authority and the Chilean Internal Revenue Service (body in charge of the control of tax standards) have prepared the start of the accounting processes of the company also by electronic means, a process that will begin for some companies during the month of August 2021.

During 2020 and 2021, protection measures for employment, companies and workers were strengthened in relation to the crisis stem from Covid-19, all of them of a transitory nature and subject to the end of restrictions and improvements in the health situation.

Transitional Measures to Face the Pandemic

In this process, the forms of suspension of contract between employers and workers were strengthened and combined with new and updated regulations intended to regulate the safe return to presence-based work, including:

  • the publication of Law No 21,247 which allows workers with obligations to take care of minors born in 2013 onwards;
  • Law No 21,160 which forces companies to allocate pregnant workers to remote work and extends maternal immunity (restrictions on the termination of the contract that counts from childbirth to one year and 84 days later) for workers who had lost that protection from 18 March 2020 (at time of writing it is to remain in force until 30 September 2021); and
  • Law No 21,342 which establishes the foundations and regulations for the safe return to workplaces including the establishment of an occupational health safety protocol with specific control and prevention measures and the creation of a mandatory individual health insurance for workers who provide services in a presence based work, which is at the company's cost. These obligations will be maintained as long as the state of "health alert" enacted by the health authority continues.

Draft Laws (Bills)

Currently, the bills of greatest interest in labour matters, despite being in early stages, are those referring to the change in the regime of participation of workers in company profits and the eventual reduction of the working day.

Modifying reward systems

The first of these projects aims to modify the current rules in which the two reward systems (annual bonus or rewards) will be maintained but altering the way in which they are applied.

Today, the employer can freely choose one of these two models. The first, consists of the distribution of 30% of the net profits of the company obtained during the fiscal year among all its workers; while the second opts for a payment model consisting of an equivalent to 25% of the worker's annual remuneration with a limit of 4.75 minimum monthly salary per year (USD 2,130). The rule change will establish as mandatory the distribution model of 30% of net profits and will leave the second model (25% of annual remuneration) as an alternative, being able to opt for this model only if the amount to be paid in this case is higher to what would be obtained (by the worker) from using the 30% distribution model. For this second case, the maximum annual limit of 4.75 minimum monthly salary would be eliminated.

Reduction of work hours

There are three projects on the reduction of working hours, all of them would reduce the maximum established of 45 hours per week. One, presented by the government during 2019, which aims to make the Labor Code more flexible, allowing an average working day of 41 hours a week. The other two, on parliamentary initiative, intend to reduce the working day to 40 hours (a 2017 project reactivated during 2019 and 2020) and to 36 hours in total (a 2021 project), respectively.

Worker as a Universal Concept

Chilean legislation does not distinguish between types of workers. The Labour Code provides universal treatment to all those who are under the employer's subordination.

However, there are certain specific rules for workers, especially related to age, characteristics or type of employment. Special regulations in these cases give either flexibility to the Code's paragraphs, or safeguards and protection to some workers.

Special Contracts

Within these distinctions are the so-called special employment contracts, such as those concerning private household workers (domestic cleaning service), dockworkers, cabin crew workers (air transport), seasonal agricultural workers, or arts and entertainment workers, among others.

Other Statutes Regulating Employment in Chile

Beyond the Labour Code, there are also specific employment statutes.

Public officials, council workers, general practitioners (GPs) and staff related to them, and primary and secondary education teachers are all subject to special laws.

Employment Contract – Generic Regulatory Model

As a common rule, Chilean law establishes a generic employment contract model that is applicable to all workers, but distinctions are sometimes set on working hours, days off and wages. The minimum wage applies to each contract, except in specific cases.


Employment contracts can be sorted by their duration, into indefinite employment contracts (the general ones) and temporary employment contracts. The latter are issued for a specific term (up to one year for unskilled workers or two years for professional ones) and a particular task, as set in the contract without mentioning the duration for such task.


Employment contracts are consensual, with the mere agreement of the parties being sufficient to bring a contract into existence. However, the law obliges the employer to extend it in writing, failing which the worker, as a legal assumption, will be able to affirm that the content of such contract is whatever he or she states. Obviously, a Tribunal might consider how reasonable the worker’s statement is, according to the particular job.

An employment contract must contain minimum clauses relating to the place and date of issue; the individualisation of the parties; the functions agreed and the place where they will be performed; the wage; shifts or working hours; and duration. It can also include any other benefits or stipulations not prohibited by law.

Working Day

As a general rule, the maximum allowed working day is ten hours. A working week can reach up to either 45 hours distributed over no fewer than five days or no more than six, or 30 hours, depending on whether it is a full-time or part-time job.


Part-time jobs are subject to the same rules as full-time jobs, except they cannot exceed an equivalent of two thirds of the maximum of daily working hours for full-time jobs; the minimum wage can be reduced accordingly.

Lower Flexibility

The daily or weekly maximum hours may be extended by overtime agreements. The Labour Code limits overtime to a maximum of two hours per day (12 a week), requires the previous agreement to be in writing, and shall be extended under exceptional circumstances. The agreement cannot surpass a three-month period, but this is renewable.

Minimal and Compulsory Rules about Wage Payments

Chilean labour law states some minimum and mandatory standards regarding the payment of wages, such as a minimum wage for full-time jobs (equivalent to USD450 per month). If a company receives annual profits, it must share up to 30% of it with all workers, in proportion to their annual wages.

The minimum wage is modified at least annually, following adjustment patterns for both economic growth in GDP and the effect of the previous year's inflation. This might be the only State intervention regarding the fixing of wages.

Other Employee Compensation

Beyond these obligations, employment agreements might regulate a compensation structure through the intervention of either workers or trade unions. With executives or high-level workers, this negotiation may exist through direct agreements. For lower-qualified workers, such a system of negotiation, discussion and agreement will apply mainly and exceptionally if there are trade unions involved.

The Deal Beyond the Minimum Law Framework

The Labour Code refers to some irrevocable rights, whereby parties shall agree on complementary elements either by improving or innovating salaries, leaves, applicable or special clauses, and so on, as far as they do not infringe employees' guarantees.

For example, the law gives 15 paid days off to each worker when he or she has been employed by the company for over a year. Employer and worker, however, could increase those days or pay vacation bonuses beyond the framework of the legislation.


The law regulates maternity leave covering six weeks before delivery and 24–30 weeks after. Throughout this period, the worker's wage will be replaced by a public or private benefit. Similarly, there is an illness leave allowing the worker to stay at home if justified by a medical certificate. The worker's health insurance will pay for the recovery period. The Labour Code also regulates other permits that might involve payment, including a five-day leave for the birth of a child (for male workers), leave for the death of a parent or partner, and leave to undergo annual medical examinations. Unpaid leave examples include leave to fulfil military service, during which time the employee's job is saved.

Confidentiality, Non-discredit and Non-compete Clauses

Confidentiality, non-discredit and non-compete clauses are admissible in employment contracts, but are subject to some limits. For example, confidentiality clauses must have the purpose of safeguarding the information that the employer qualified as such (in advance), and only cover the contracting period. The effects will usually be more restricted after this period, since the expiry date has to be set from the beginning, otherwise such clauses will be against the constitutional right to obtain employment. Clauses regarding worker's responsibility are admissible as long as they are connected to the functions performed by the worker. If the employer claims a breach of such clauses, it will be necessary to go to trial to prove the worker's liability.

Non-compete clauses are valid within the autonomy conferred on the parties by the legislation. An employer can dismiss a worker who breaches such a clause, without severance pay, either personally or through related persons. These clauses would also come into force between the expiry date of the employment contract and a later one if they comply with the following requirements set by jurisprudence:

  • they have short or medium-term limits, excluding any indefinite agreement on this point; and
  • they provide for a compensation payment for the loss of opportunity that may arise from not competing with the former employer.

If a non-compete clause does not satisfy these requirements, a tribunal may resolve that such a clause is against the Constitutional right to work by impeding the employee's ability to obtain a new job elsewhere.

Non-solicitation clauses are not common within the contracting systems. One exception is under Article 160 No 2 of the Labour Code, whereby workers might be dismissed if they compete directly with an employer's business, without the right to severance, but this clause is uncommon.

General Rules

The Political Constitution states the obligation to respect and protect private life and personal and family honour, and likewise to protect personal data (Article 19 No 4).

Beyond labour regulations, Law No 19.628 “About Protection of private life” was enacted in 1999 and set out the legal framework under which individuals must build their relations concerning this matter.

One of the most important topics covered by Law No 19.628 is the treatment of personal data in public registers, by either public or private bodies.

Because firms have preferential access to employees' data, one aim of Law No 19.628 is to regulate the collection, storage and use of employees’ personal data by companies.

According to the law, any piece of information concerning identified or identifiable natural persons qualifies as personal data. The treatment of this sort of information can only be permitted when the law allows it, or when the person (rights’ holder) allows it in writing. Nevertheless, if the personal information is provided by sources available to the public, there is no need for authorisation.

Labour Law Sphere

Focusing on labour law only, Article 154 bis of the Labour Code replicates the content of the above law by mandating employers to shield personal employees’ data which has been accessed in the context of employment relations.

There is no direct sanction for breaches of employee’s privacy, but the infraction of the right can be settled by a general procedure protecting workers' fundamental rights (Article 485 et seq of the Labour Code), either related to an ongoing labour relationship or in a dismissal instance.

Foreign Workers in the Labour Code

Foreign workers have the same employment rights as any national worker. Nevertheless, Article 10 of the Labour Code states that the employment contract must indicate the nationality of the worker, among other mandatory information.

Following this, there is a specific chapter of the Labour Code dedicated to the nationality of workers, which states that at least 80% of employees working for the same employer must be of Chilean nationality. This rule does not apply when the company maintains 25 or fewer contracted employees.

Criteria to Take into Account

To reach this 80%, the law provides the following criteria:

  • all workers contracted by the same employer in the country must be taken into consideration;
  • specialised technical staff should be excluded from the rule – according to the Labour Office (Opinion No 6.307/282, 14.11.96), this includes any qualified staff member who employs skills or knowledge considered to be at a top level of specialisation or study; and
  • any foreigner that either is married or has signed a civil agreement with a Chilean national, or who is the parent of a Chilean child, will be considered a Chilean national.

Although there are no direct registration requirements in order to employ them, foreign workers must have a resident status in order to be legally hired.

In April 2021 the new migration law was published. This law, although it will enter into force from April 2022, modified the existing migratory categories.

The law partially modified the immigration categories. Unlike the current text (D.L. No 1,094 of 1975), it will allow foreigners to immediately start paid work in Chile as long as they have started the procedure to obtain residence from their country of origin.

In addition, it simplified the systems for obtaining visas, eliminating a category widely used in Chile: the visa subject to a work contract, which forced the foreigner to maintain the status of dependent worker to remain in Chile and, in turn, forced the employer to pay the costs of return to the country of origin at the end of the employment contract.

Greater detail of the regulation of the visa regime and requirements for these new migratory categories is still unknown. These matters will be established in a regulation to be issued by the Ministry of the Interior before April 2022.

Trade Unions in the Labour Code

Trade unions can be sorted by either the type of company they belong to or the services they provide. In this regard, Article 216 of the Labour Code considers the following:

  • the company union, grouping workers of the same company;
  • the intercompany union, grouping workers hired for two or more employers;
  • the own-worker union, grouping workers that have no dependence on any employer; and
  • the eventual worker union, grouping workers that work occasionally or cyclically.

The above definitions are the basic union structures, but workers can choose other forms of organisation, according to their interests, in order to assure their autonomy and freedom.

Trade Union Purposes

Article 220 of the Labour Code states the following fundamental purposes of a union:

  • representing its members in collective bargaining, signing collective agreements, looking after the fulfilment of agreements and exerting the rights borne out of such agreements;providing representation to members when so required;
  • defending members' labour and social rights, and filing complaints in cases of infraction;
  • acting as a party in any lawsuit related to anti-union behaviour;
  • assisting union members;
  • promoting members’ education;
  • channelling inquiries and facilitating members’ needs for working integration in the company;
  • collaborating in the reduction of accidents and illness related to work conditions;
  • making up or taking part in co-operative health associations;
  • improving the employment level and taking part in job placement; and
  • performing whatever activity not forbidden by law.

In this regard, trade unions have a goal to assist their members in matters concerning their labour and social security rights, acting as an active counsellor and advocating for the best interests of their members.

Proscription of the Company’s Unlawful Intervention

To enable unions to achieve their goals free from pressure, intimidation, harassment, threats or efforts to discredit them or their leaders, the Labour Code provides several measures to avoid and sanction any unlawful intervention by a company, in line with the Political Constitution of the State (Article 19 No 19), which provides for complete autonomy.

Therefore, Articles 289 et seq mention some conducts or actions that can be considered anti-union practices, contrary to the freedom of association embodied in the right to unionise. The Labour Office and Unions can prosecute such conducts. If found guilty, the company will have to pay a fine and will be excluded from performing contracts with the State for two years.

Unsettled Disputes

There is no internal company structure set by law that assures a direct channel of communication between unions and managers or executives. Therefore, unions cannot count on any formal way to defend members’ interests, excluding collective bargaining and mediation processes carried out through the Labour Office.

The Law Reform of 2016

The law reform of 2016 (Law No 20.940) tried to enhance the role of the union by remarking on the concept of “Recognition of exclusive bargaining agents”.

From here, it was debated if trade unions were the only entity entitled to agree with employers on a collective agreement, excluding groups of employees joined only for such purpose.

Nowadays, non-union groups of workers can negotiate collective agreements, but that document does not have the same approbation procedure as a union agreement, so employees have the freedom to establish organisations of their own choosing and the right to agree on common working conditions with employers without necessarily involving a trade union.

Trade Union Figures

The law reform of 2016 also sought to increase the number of unions, considering that just 15.5% of workers were unionised in 2011; by 2018, that figure had increased to 20.6% (source: Labour Office).

It must be added that public institutions defend a social climate that guarantees the respect and protection of unions and union members, so trade union rights are exercised in normal conditions and in a climate of complete security.

Trade Union Board

Unions are represented by a union board formed of members elected through official elections.

One or more union leaders will have labour immunity, depending on the number of members in the union. Such immunity will protect the leader while they are in position, and for six months after they leave the post.

The requirements to become a union board member are set out in the statutes of the organisation, which is a public document written by the same union and will define the obligations of both members and the trade union.

Time to Dedicate to Trade Union Purposes

The law allows union officers to dedicate at least six hours per week to union tasks, each month (or more depending on the number of union members), through the so-called working union hours. Such time will be paid by union funds, unless the employer and the union have agreed otherwise. Even under the statutes, trade union officers could be excluded from working for the employer to focus solely on the union’s affairs. Meanwhile, the employer must maintain the officer's job and consider the above time as having been effectively worked.

The non-working hours provided to union officers facilitate the fulfilment of union goals and allow them to perform trade union functions, within the terms agreed in law and by the statute.

Beyond the Traditional Union Officer Role

Union officers handle unwritten tasks when unions have an active role in the company’s structure, such as requesting the employer to report all dismissals of union members and obtaining information about the reasons for such.

Related to other activities union officers can carry out, the law entitles them to ask for company financial information, including a list of the salaries paid to each worker, either periodically or for collective bargaining purposes.

Higher-Level Organisations

The Labour Code recognises other organisations, such as federations of trade unions (groups of unions), confederations (bigger organisations grouping federations) and National Trade Union Centres grouping federations, confederations, trade unions and groups of public officers.

Collective Bargaining Agreement’s Content

The Labour Code regulates the process, form and content of collective agreements, their legal force and binding effects, and also when and how to register the agreements at the Labour Office.

As a formality imposed by law, collective agreements must be issued in writing, indicate the parties and be signed by them, and state both the date on which the agreement is to come into force and the date of expiry (from two to three years). The agreement will also refer to salaries, benefits, working conditions, and so on, excluding affairs related only to the organisation and development of the employer's business.

By law, the parties must agree on whether or not to extend all or some of the collective agreement's benefits to non -unionised employees.

After the parties’ signature, the agreement has to be registered at the Labour Office.

Enforceability of the Agreement beyond Its Expiry Date

The agreement will be considered to incorporate the terms of any contract or agreement in force, or concluded subsequently between the parties. Therefore, a collective agreement will continue to be binding even after it expires, since its terms will be deemed to be included in the employment contract of each trade union member.

Controversial Interpretation

If either the trade union or the employer believes that the agreement does not conform with the minimum standards laid down by law or that there are controversial interpretations of it, they may present the complaint to the Labour Tribunal, which will solve the conflict.

According to Articles 159, 160, 161, 162, 168 of the Labour Code, the employer must communicate the specific grounds for termination and the facts that support it.

The grounds for termination are as follows.

  • Article 159: the employment contract will terminate in the following cases:
    1. through mutual agreement between employer and employee;
    2. upon the employee’s resignation;
    3. upon the employee’s death; or
    4. by the expiry date of a fixed-term employment contract, although a fixed-term employment contract will become open-ended in the following scenarios:
      1. if the employee continues to work after the expiry date;
      2. if the employee has worked on and off for 15 months or at least 12 months for the same employer and under two or more contracts; or
      3. if both the employer and employee agree on a second renewal of the contract;
    5. at the end of the job or services that gave origin to the contract; or
    6. due to a fortuitous case or force majeure event.
  • Article 160: the employment contract will end without compensation if the employer invokes one or more of the following grounds:
    1. any of the following improper, serious and duly verified conducts:
      1. employee’s lack of probity in the performance of his task;
      2. sexual harassment;
      3. employee’s physical acts against the employer or any employee of the same company;
      4. employee’s slander against the employer;
      5. employee’s immoral conduct that affects the company where he or she works; or
      6. labour harassment;
    2. if the employee conducts business in the same trade as the company’s, which was previously prohibited in the employment contract by the employer;
    3. if there is absence from the workplace without justification for two days in a row, two Mondays in the month or any three given days in the same period, or absence without cause or previous notice by any employee in charge of an activity, chore or machine whose abandonment represents a serious disruption to the progress of work;
    4. an employee’s abandonment of work, such as an untimely and unjustified exit from the workplace during labour hours, without the employer’s previous consent or an unjustified refusal to work on the tasks agreed in the employment contract;
    5. acts, omissions or gross negligence that endanger the safety or functioning of the establishment, the safety or activity of the other employees, or their health;
    6. material damage done deliberately to installations, machinery, tools, working tools, products or merchandise; or
    7. a serious breach of duties imposed by the employment contract.
  • Article 161: the employer can end the employment contract by affirming in writing that the company is facing needs related to its own rationalisation or modernisation, lower productivity, changes in either the market or economy, or all of the above, which make it necessary to dismiss one or more employees.

If the employee is entitle to represent the employer (such as managers, assistant managers, agents or representatives) and has general administration powers over the company, he could be dismissed by eviction. Both company needs and eviction require a notification letter to be issued 30 days in advance, with a copy sent to the Labour Office.

Nonetheless, the above notice period might be circumvented by paying a compensation equal to a wage.

In general, there is no mandatory dismissal procedure apart from for sexual harassment claims, as contained in Article 160, in which case, according to Article 211-A and subsequent articles thereof, the employer must conduct an investigation or send the complaint to the Labour Office.

Collective redundancies are neither prohibited nor regulated by a specific procedure. Consequently, dismissed workers can sue the employer personally or by a common attorney on behalf of all of them.

There is a notice period for the grounds of termination established in Article 161 of the Labour Code, but this can be circumvented by paying an economic compensation on top of the severance for years of work.

According to Article 162 of the Labour Code, the dismissal must be made in writing and delivered in person or by certified mail to the employee, and it must contain the specific grounds for termination and the facts that support them. Likewise, it must inform the employee whether their social security contributions are paid for the period between the starting date of the contract and the month before the dismissal, with a certificate of payments made by the correspondent institutions. The employer must also inform the employee of the severance payments involved, in writing.

No general external authorisation is needed, except for workers who are protected from dismissals by union law or maternity rights. In those events, according to Article 174 of the Labour Code, the employer must obtain authorisation from a competent judge before the dismissal.

The Labour Code contains no definition of summary dismissal or dismissal for serious causes in the private sector, nor regulation thereof. The only way for public servants who are not elected or are employed at the exclusive confidence of the service’s chief to leave office or employment is through a summary dismissal regulated in the administrative statute – Law No 18.834, Article 119 et seq.

The procedure considers the administrative inquiry led by an administrative attorney, who gathers evidence and gives the defendant the opportunity to make his case. With all the evidence, the administrative attorney makes a recommendation to the head of the institution, suggesting to absolve or sanction the public servant. If he decides to sanction, there are four options:

  • censure;
  • fine;
  • suspension from office for between 30 days and three months; and
  • dismissal.

The decision is made by an administrative act that can be appealed and examined by the Comptroller General.

Termination agreements are permitted under Article 177 of the Labour Code, with the following formalities for validity:

  • the agreement must be in writing;
  • the agreement must be signed by both parties;
  • the employees must sign in the presence of the union’s president or delegate, labour inspector, public notary, officer of the official register or a city clerk; and
  • all the employee’s social security contributions must be paid by the employer.

In Chile there are no enforceable releases because the employee has the right to make a legal reserve on the termination agreement.

Regarding other limitations on termination agreements, if the social security contributions are not paid, the termination agreement is voided. Likewise, any clause that goes against public law rules is void.

There is protection against dismissal based on union and maternity protection laws.

In the case of union laws, according to the existing regulation in Chapter III of the Labour Code, there is permanent protection for union representatives and temporary protection in the following three situations:

  • at the time of the constitution of a union;
  • at the time of the representative’s election; and
  • at the time of collective bargaining.

In the case of maternity protection laws, women have protection from conception until one year and 24 weeks after the birth of the baby.

In both cases, according to Article 174 of the Labour Code, the employer must get authorisation from a judge for the dismissal of the employee. The judge not only needs to rule on the merit of the grounds for termination, but he also needs to balance those grounds against the protection and the reason behind it. That is why a judge can still deny the authorisation even if the employer proves the grounds.

There is one procedure for all wrongful dismissal claims, which is regulated in Article 446 of the Labour Code et seq. This procedure may be different if the termination involves an impact on specific human rights or union freedom, in which case those articles are complemented by the regulation in Article 289 of the Labour Code et seq, Article 403 of the Labour Code et seq, and Article 485 of the Labour Code et seq.

Nonetheless, an employee lawsuit does not need to be substantiated because, according to Article 454 No 1 of the Labour Code, the employer has the burden of proof of the grounds for termination. In this situation, claims need to address facts presented in the letter of dismissal only if the employee needs to explain something, but he can also deny all facts.

That being said, if the conflict focuses on the understanding and interpretation of the law, then both sides have to explain and substantiate their positions.

The consequences of a wrongful dismissal claim are stated in Article 168 of the Labour Code, which stipulates the following options:

  • if the grounds for termination are found in Article 161 (see 7.1 Grounds for Termination), the severance paid for working years fulfilled increases by 30%;
  • if the grounds for termination are found in Article 159 (see 7.1 Grounds for Termination), or if the employer did not invoke any grounds, the severance paid for working years fulfilled increases by 50%;
  • if the grounds for termination are found in Article 160 (see 7.1 Grounds for Termination), the severance paid for working years fulfilled increases by 80%; and
  • in any of the previous options, if the judge decides that there was no plausible motive for the dismissal, the severance paid for years of work increases by 100%.

According to Article 2 of the Labour Code, discriminatory acts are distinctions based on race, colour, sex, maternity, breastfeeding period, nursing, age, civil status, syndication, religion, political stance, nationality, ethnic background, socio-economic status, language, belief, participation in guild organisations, sexual orientation, gender identity, parentage, personal appearance, disease or handicap, or social background, whose goal is to cancel or alter equal opportunities or the treatment of employment. Article 19 No 16 Section two of the Chilean Constitution prohibits any discrimination that is not based on personal skills or capabilities – in other words, a broader sense of what is discrimination.

Claims made based on discrimination are regulated in Article 485 et seq of the Labour Code, and can occur during the employment relationship or upon the dismissal.

Regarding the burden of proof, Article 493 states that the employee only needs to prove signs of discrimination, in which case the employer must explain and prove the base of the measure adopted and its proportionality.

The applicable damages or relief depend on the moment of discrimination. Article 495 of the Labour Code states that the judge must order the end of discriminatory acts and measures to repair the consequences of the act, including compensation, and must fine the employer according to the law. If discrimination occurs upon the dismissal, Article 489 establishes compensation of from six up to 11 salaries, as determined by the judge.

In Chile, there is a specialised employment tribunal that is ruled by a particular Chapter of the Labour Code and delegates employment conflicts to Labour Tribunals, which are located in every capital department and the most important cities; there are also four salaries and social security Debt Tribunal. The remaining counties have Ordinary Tribunals to deal with labour matters.

General Labour and Special Procedure

The Labour Code states both a general labour procedure and special ones, both of which could secondarily apply a common law forum (Code of Civil Procedures) that institutes the same common procedure principles: the use of oral procedures, concentration, publicity, contradiction, continuity and non-intermediation.

Labour General Procedures are composed of two hearings: one preparatory and the other “of trial”, after which the judge must provide a sentence.

Regarding special procedures, there is a labour tutelary to protect workers' human rights violations either during the labour relationship or upon dismissal, which has the aim of reducing the worker’s burden of proof in the trial. On this ground, the worker’s claim can be constructed just by cognate facts. According to Article 407 of the Labour Code, both anti-union and unfair practices will be sustained through the aforementioned procedure.

Also, there is a payment procedure to address small payment and small offence claims, which have just one hearing.

Class Actions

Even though the Labour Code does not deal expressly with the concept of class actions, they are allowed because of the secondary application of the Code of Civil Procedures, and it is common for two or more workers to file a lawsuit under the same complaint.

Despite the trade union having rights to represent its members, members can go to trial as a collective when they claim a general breach of an employer's duties, giving their consent to a common lawyer.

Only attorneys can litigate in labour trials, as long as they have been designated by the party for such trial, in writing. Other lawyers can also be named to act together, or separately to the first one.

Lawyers can have general or wide powers to represent claimants. The first powers are embedded in the designation, while the second ones must be conferred expressly. Nevertheless, a simple designation is enough to settle the dispute in the trial, but wide powers are required in order to sign non-judicial settlements, and to allow a lawyer to receive any payment from either the settlement or the sentence.

By the general rules of the Code of Tribunals, judicial arbitration is only possible in collective bargaining matters.

Chapter IV of the Labour Code is called “About Collective Bargaining”, and covers voluntary arbitration and mandatory arbitration. In the former, trade unions and employers’ representatives can ask for arbitrators’ intervention. Mandatory arbitration will operate in two situations: when companies are excluded by law from going on strike, and whenever the Tribunal orders employees to desist with the strike and go back to work in order to avoid causing risk to the population’s health, environment and supply of goods and services, or to the national economy and security.

Whether it is voluntary or mandatory, the procedure for arbitration must follow the Regulation of Labour Arbitration stated in Decree No 16 of the Ministry of Employment and Social Security of 14 February 2017, according to which an arbitral settlement subscribed without considering a labour arbitral procedure could not be demanded at a trial, since just an arbitral sentence performed in such a manner is valid.

In the Chilean labour procedure, the judges' determinate whether a party pays the costs of the trial or not, and the amount of such costs. However, each party shall agree the labour fees with his or her lawyer, considering they are not set by law. Although the recovery proceedings for non-payment are established by law, there is no chance of compelling the adversary to pay for such an amount.

Similarly, the Labour Code states in Article 459 No 7 that the sentence must indicate the amount of tribunal fees and explain if the losing party shall pay them or not. In the same way, any tribunal resolution capable of finalising a procedure shall decide about labour and tribunal fees, and the amount of each one.

In labour procedures, there is a so-called “exception of payments principle" covering any actuation made by tribunal officers. Likewise, the law gives any party living in poverty the “privilege of poverty" to get free legal representation.

However, if a Tribunal imposes the tribunal or lawyer fee payments on a party, the amount of such payments will be low.

Lizama Abogados

Avenida Vitacura 2969
Oficina 1001
Las Condes

+56 2 2246 3080

+56 2 2246 3070

info@lizamabogados.cl www.lizamabogados.cl
Author Business Card

Trends and Developments


Lizama Abogados specialises in labour law and social security, and was founded by Luis Lizama Portal in 2006. The firm has its office in the city of Santiago and has 12 lawyers specialising in the labour area. The firm is recognised for providing legal and strategic advice in complex collective bargaining, highly complex labour lawsuits, and labour issues that affect a company's human resources management, with difficult solutions. In the last year, the firm has begun to provide professional compliance services in labour investigations and legal advice in new technologies in fields related to labour law. The firm provides professional services to national and foreign companies in all sectors of economic activity, particularly mining, finance, commercial, industrial, energy, agriculture, transport, telecommunications, entertainment, construction, services companies, tourism, media, scientific research, universities, health, ports, charities and public services.

A Disruptive Pandemic and the Impact on Labour and Employment Law

On 3 March 2020, the first COVID‒19 case was detected in Chile. From this unfortunate fact was necessary to invent, improvise, and adapt. However, in labour law matters, the 18 months since the first case has been quite prolific from both a legislative and practical labour point of view. There have been enacted several laws with effects in labour topics, most of them looking for establishing the benefits and norms that allow diminishing the effects of the pandemic while permitting to continue providing labour services and related issues to them.

Collective Bargaining in Chile

In collective bargaining matters, there is no normative substantial change adapt the collective bargaining process to the current context. Nevertheless, reality has generated several changes in the way of undertaking collective bargaining, mainly related to sanitary restrictions that employers, trade unions and the Labour Public Department must consider.

The next paragraphs will cover the changes in the collective bargaining processes performed in the last 18 months.

Online collective bargaining

The Labour Code does not set out a specific way to hold collective bargaining meetings between trade unions and executive officers but, generally speaking, they are held in-person. Despite this, during the pandemic, the possibility to meet has been limited, or meetings were prohibited in enclosed spaces. Looking for a solution, both trade unions and executive officers opted for holding online meetings. This mode of negotiation involved some challenges, including:

  • connectivity;
  • data protection; and
  • diminishing personal interaction and ritual, among others.

However, as the months have passed, the parties have surpassed those initial challenges and significant successes collective bargaining processes.

Online mediation by the Labour Public Department

The Labour Public Department has ‒ at different stages ‒ promoted telework. To be specific, during the collective bargaining ‒ and in particular at the meditation phase ‒ this governmental body has developed its intermediation work by online platforms.

Despite delays and other practical issues related to the lack of experience in those fields, the system was finally perfected and allows the Labour Public Department to keep efficient standards and contribute to reach understandings between both trade unions and executive officers, in similar terms that those seen before the pandemic crisis.

Suspension of union's vote in the final step of collective bargaining due to quarantine

Regarding practical changes in the collective bargaining process, the most polemic was the suspension of the union’s vote in the final step of collective bargaining due to quarantine periods, a measure imposed by an administrative decision undertaken by the Labour Public Department.

The Labour Public Department’s decision has not been exempt from polemic, as some sectors have suggested that the process is flawed as the law does not account for “undefined suspensions”. Despite this, collective bargaining parties seem to have assumed that suspension is a cost of the pandemic period, and in some cases employers and trade unions have co-ordinated to pay for an online voting system.

Vote of last offers by electronic means

Another important change arising from the ongoing sanitary measures is the impossibility of voting in person. To work around these limitations, an electronic voting system has been introduced that allows participants to vote from any electronic device and even considers the participation of the Labour Public Department as a certifying officer. This system has worked well and has permitted trade union members to manifest their opinions under optimum security measures. The low cost of the platforms and the simplicity of their use have allowed for extensive uptake of their usage.

It is important to note that, the fact that Chile is undergoing a social and constitutional process will undoubtedly prove to be an interesting element in trade union matters, particularly regarding strike themes, branch collective bargaining and the workers’ participation in the companies’ income. All these elements will have a high degree of influence on collective bargaining performs during those periods.

Teleworking Abroad

Although teleworking or distant working existed prior to the pandemic, the accompanying regulations were unclear. In fact, several aspects involved in teleworking could have been understood as forbidden or at least, unregulated.

The enactment of the Teleworking Law on 26 March 2020 provided a precedent, but at the same time installed some doubts that have yet to be solved, even with the enactment of the Teleworking Regulation (concerning health and safety measures) and the 3532 norm by the Social Security Public Sub-Department (SUSESO).

It must also be considered, as per the 694‒2020 norm by SUSESO, that security social agreements between Chile and other states where workers may work and, at least referentially, the “Upgrade tax legislation Law” have equally had an impact on teleworking.

Territoriality of national labour law

Article 14 of the Civil Code states that Chilean Law can be applied to any individual in the country, be they nationals or foreigners. Conversely, they have no impact on Chileans or foreigners abroad, even when they preserve their residence in the country.

Article 15 of the Civil Code recognises an exception that allow the application of national law to Chileans abroad, the cases are limited and do not include working matters.

Consequentially, in labour affairs, Chileans are likely ruled by external law when abroad. Thus, the Labour Public Department has made clear that when a labour agreement is signed in Chile it must be ruled entirely by national law but, if the obligations within it shall be executed abroad, they must obey the relevant external legislation.

Was the national labour law modified by the current Teleworking Law?

The Teleworking Law has not provided any explicit modification to the national labour law. Thus, the labour contract or addendum just should specify that the worker’s location is in such country or another one, different to Chile.

Despite the above, there are some practical problems and higher costs involved, such as the provision and maintenance of work devices. Similarly, there are issues regarding the fulfilment of health and security measures.

It is for the social insurance company and Labour Public Department to verify the fulfilment of the labour obligations in situ, and any obligations provided for in the Teleworking Regulation.

Administrative approach to the topic

The 694‒2020 norm by SUSESO, of 13 February 2020 states that there is international coverage if:

  • there is a labour contract signed in Chile;
  • the contract is still in force;
  • the employee works abroad; and
  • there is no international agreement that limits the coverage of the insurance.

It is crucial that the social insurance company establish if there is an international agreement regarding health and safety measures.

The 3532 norm by SUSESO confirms that accidents and illnesses that occur during teleworking will have social insurance coverage, paid by employers, as long as the issue is related to the work undertaken.

Law No 21.210 the Update Tax Legislation, governs the taxation of wages earned abroad.

At the end of the day, is at the employers discretion whether of not to offer teleworking abroad.

Personal Data Protection

The pandemic forced the implementation of several sanitary measures, particularly those related to at-risk groups more likely to experience worse cases of COVID-19. In this context, SUSESO advised employers to allow teleworking for employees within at-risk groups, if possible.

To further support this, Chile has implemented an extensive vaccination programme to prevent the increase of COVID-19.

Unanswered questions

The biggest unanswered questions raised from the current data protection regulation related to labour matters were:

  • whether employers could ask for personal health data to employees to know if they suffer from any health condition; and
  • whether they can ask for employee fulfilment of vaccination process.

To respond to both uncertainties, it is necessary to review some aspects of the national data protection rules.

Data protection in the Chilean legal system

Data protection is a right that was included in the National Constitution in Article 19 number 4 of law No 21.096 of 2018.

The National Constitution has specified how to implement “personal data protection”. The current  standards are held within law No 19.628 of 1999.

In this regard, that law allows only two considerations for treat personal data:

  • legal authorisation; and
  • author-written consent.

As an exception, the law allows the treatment of the following personal data, without the aforementioned requirements:

  • when the data is included in public records and the information is related to economic, financial or commercial aspects;
  • when the data is held in a specific directory and limited to inform if people take part in a group, profession, or activity, their educational certificates, address or date of birth; and
  • when data is related to commercial communications or sell-off assets or services.

Sensible data

Law No 19.628 includes protections for “sensible data”, such as personal data related to physical or moral characteristics of an individual, or facts linked with private life or intimacy, such as habits, racial origin, ideology and personal opinion, religious beliefs, health conditions both physicals and mental, and sexual activity. In fact, Article 10 of the law points out that data may only can be used in the following circumstances:

  • when a law authorises it;
  • when the individual agrees to it; or
  • when the data is necessary to establish a social health benefit for the individual to whom it pertains.

It can be noted that both whether a worker is in at-risk group (in relation to COVID-19) and if a worker has been vaccinated are considered “sensible data”, and must be managed in-line with the above legal requirements.

The particular treatment given to data related to workers’ health conditions and vaccination

In relation to the first assumption, it is understood that the employer can treat sensible data with the worker's approval. The above mandates the employer to take every single measure to keep workers safe (Article 184 of Labour Code). In this sense, it is clear that knowing about workers health conditions is a key element to prevent them from illness, especially those related to COVID‒19.

In the same vein, if the worker willingly communicates their position in the vaccination process, the legal premise will be fulfilled.

In both cases, some workers are reticent in wanting to inform employers of their health conditions or provide inexact information. In this situation, the employers have no mechanism to make workers provide or amend such data.

Highlighting some external approaches and internal improvements

To finish, it has to be mentioned that Law No 21.342, of 1 June 2021, remarked the obligation of agreeing to provide teleworking options to workers who present specific social or health conditions, but equally requiring worker’s to prove to the existence of such conditions.

What’s Next?

It seems that some changes should remain in place post-pandemic as many have contributed to the modernisation and improvement of the labour rules and regulation of important issues. Moving forward, legislation must resolve some issues in order to ensure both employees and employers to are fully aware of the repercussions and costs of choosing and applying the rules of the new and developing legal landscape.

Lizama Abogados

Avenida Vitacura 2969
Oficina 1001
Las Condes

+56 2 2246 3080

+56 2 2246 3070

nfo@lizamabogados.cl www.lizamabogados.cl
Author Business Card

Law and Practice


Lizama Abogados specialises in labour law and social security, and was founded by Luis Lizama Portal in 2006. The firm has its office in the city of Santiago and has 12 lawyers specialising in the labour area. The firm is recognised for providing legal and strategic advice in complex collective bargaining, highly complex labour lawsuits, and labour issues that affect a company's human resources management, with difficult solutions. In the last year, the firm has begun to provide professional compliance services in labour investigations and legal advice in new technologies in fields related to labour law. The firm provides professional services to national and foreign companies in all sectors of economic activity, particularly mining, finance, commercial, industrial, energy, agriculture, transport, telecommunications, entertainment, construction, services companies, tourism, media, scientific research, universities, health, ports, charities and public services.

Trends and Development


Lizama Abogados specialises in labour law and social security, and was founded by Luis Lizama Portal in 2006. The firm has its office in the city of Santiago and has 12 lawyers specialising in the labour area. The firm is recognised for providing legal and strategic advice in complex collective bargaining, highly complex labour lawsuits, and labour issues that affect a company's human resources management, with difficult solutions. In the last year, the firm has begun to provide professional compliance services in labour investigations and legal advice in new technologies in fields related to labour law. The firm provides professional services to national and foreign companies in all sectors of economic activity, particularly mining, finance, commercial, industrial, energy, agriculture, transport, telecommunications, entertainment, construction, services companies, tourism, media, scientific research, universities, health, ports, charities and public services.

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