ILO is a specialized agency of the United Nations
ILO-en-strap
Go to the home page
Site map | Contact us français | español
> GOVERNANCE - home > Employment protection legislation database - EPLex >

Chile
 


Source and scope of regulations - 2018    

References
  • Labor Code [LC], consolidated version, DFL No. 1, as last amended by Act 20949 (Ley 20949) of 17 September 2016 (Código del Trabajo, texto refundido, coordinado y sistematizado - available in Spanish only)
    Date: 17 Sep 2016; view website » (view in NATLEX »)
Scope
Size of enterprises excluded (≤): none
Workers' categories excluded: civil/public servants; police; army; judiciary; state security corps; diplomats
Remarks:
  • Art. 1 LC: the LC does not apply to civil servants employed in centralized or decentralized state administration, the National Congress and Judiciary, or to workers in state undertakings or institutions or workers employed in bodies to which they contribute, participate or are represented, provided that such workers are governed by a special law, i.e. the Administrative Statute, Act No. 18834.
    Thus, the provisions of the LC apply to those aspects not regulated by these special statutes, such as the area of maternity protection.
    - Domestic workers and managers are not excluded as such, they are subject to specific rules with regards to termination of employment: their employment can be terminated without cause by way of desahucio (see valid grounds).
    - Independent workers are also excluded (art. 8), except where the LC expressly refers to them.
    - Services rendered by persons who work either directly with the public, or intermittently or sporadically at home, are not considered as involving employment contracts, and therefore fall outside the LC (art. 8). Graduates of institutions of higher education or professional technical training programmes, for a specified period, are also excluded while they are fulfilling work-experience requirements.
    - Home work, which is regarded as a dependent or independent relationship determined by the parties themselves, is governed by special legislation.
    - Contracts for apprentices, agricultural workers, stevedores, seafarers and casual port workers, and workers in private homes (domestic workers) are covered as special contracts under Title II of the LC. However, the general provisions on dismissal apply to them.


Types of employment contracts - 2018    

+ show references

Maximum probationary (trial) period: no limitation

Remarks:
  • Probationary period is not regulated by law. Fixed-term contracts are used, in practice, as "probationary" time.

Fixed term contract (FTC):
  • FTC regulated: Yes
  • Valid reasons for FTC use: no limitation
  • Maximum number of successive FTCs: 2
    Remarks:
    • Art. 159 LC stipulates that fact of working after the expiration of a FTC transforms the FTC in an open-ended contract. The same effect is produced by the second renewal of a FTC.

  • Maximum cumulative duration of successive FTCs: 12 month(s)
    Remarks:
    • Art. 159 LC: Fixed-term contracts may be made for a maximum duration of one year (art 159 LC). One renewal is possible, provided that the maximum cumulative duration does not exceed 1 year.
      As an exception, a FTC may last up to 2 years in case of managers or individuals with a professional or technical degree. One renewal is possible, provided that the maximum cumulative duration does not exceed 2 years.

      If a worker is employed intermittently for 12 months or more under 2 or more FTC within a period of 15 months, which starts to count from the first appointment of the worker, there will be a legal presumption of an open ended contract.

Substantive requirements for dismissals (justified and prohibited grounds) - 2018    

+ show references

Obligation to provide reasons to the employee: Yes
Remarks:
  • * In case of dismissal based on worker's conduct (art. 160), the written notice of dismissal shall state the legal reasons for dismissal, its justification and the facts on which dismissal is based in addition to the status of social security contributions (sec. 162, LC). (This also applies to termination by conclusion of the particular task covered by the contract; the expiration of an agreed-upon term and force majeur)
    * Art. 162 provides for specific notice requirements for dismissals based on the "requirements of the undertaking" (=economic reasons): i.e the worker must be given notice, copied to the relevant inspectorate, at least 30 days in advance. However, it does not specify whether the reasons for such dismissal shall be specified in the notice.
    * No justification is required for the desahucio of certain categories of domestic workers ("trabajador de casa particular") or persons occupying positions of trust and persons representing the employer (art. 161 LC - see below)


Valid grounds (justified dismissal): worker's conduct; economic reasons
Remarks:
  • 1) The following are valid reasons related to the worker's conduct which entail summary dismissal with no right to severance pay (art.160 LC):
    * Dishonesty, acts of violence, insult or serious immoral behaviour duly proven, and/or sexual harassment;
    * Negotiations conducted by the worker within the normal functions of the enterprise and which might have been expressly forbidden, in writing, within the terms of the contract made with the employer;
    * Unjustified absence from work for two consecutive working days, two Mondays within a period of one month or a total of three days within the same period; similarly, absence which is unjustified or without advance notice by a worker responsible for a process, task or machine when such absence entails disruption in the rest of the service or production process;
    * Abandonment of work by the worker, which is defined as: leaving the workplace without proper notice or valid reason during working hours, and without authorization from the employer or his or her representative; and unjustified refusal to perform the assigned task under the agreed terms of the contract of employment;
    * Acts, forgetfulness or carelessness seriously affecting the safety or operation of the establishment, safety or activity of the workers, or their health;
    * Deliberate material damage to the plant, machinery, tools, work implements, goods or merchandise; or
    * Serious breach of the obligations under the contract of employment.

    2) Pursuant to art. 161 LC, the employer can legally terminate a contract for reasons based on the requirements of the undertaking. These requirements (necessidades de la empresa) can result from streamlining or modernization activities, reduced productivity, changes in market or economic conditions which impose the need to lay off one or more workers.
    In such cases, notice period requirements shall be observed and the dismissed worker will be entitled to severance pay.
    It is worth noting the worker's lack of adjustment to the undertaking's technical or working innovation was previously included in art. 161 as a valid ground for dismissal. It has however been deleted in 2002 by Act No 19.759.

    3) Finally, under art. 161 LC, the employer can dismiss without cause (by way of desahucio) the following persons:
    - certain categories of domestic workers ("trabajador de casa particular");
    - persons occupying positions of trust; and
    - persons representing the employer, such as managers, assistant managers, agents or other types of representatives, provided that they have general administrative competence.
    In such cases, those workers have the right to receive a 30 days prior written notice of the desahucio and receive a severance indemnity. In addition, notification to the labour inspectorate is required.

    See also: Article 163bis LC introduced by Law 20.720 of 2014 concerning new regulation on bankruptcy


Prohibited grounds: marital status; pregnancy; maternity leave; race; colour; sex; sexual orientation; religion; political opinion; social origin; nationality/national origin; age; trade union membership and activities; disabilities; financial status; language
Remarks:
  • - Art. 161 LC prohibits the dismissal grounded on economic reasons and the "desahucio" in the following cases:
    * Workers on sick leave
    * Workers on temporary work injury or illness leave

    - Article 194 LC establishes that the employer cannot terminate the employment of the worker because of pregnancy.

    - Article 2 also establishes that the financial status or debts by the employee cannot be taken into account by the employer as a condition to hire a worker.

    -The dismissal based on trade union membership or activities will be consider null and void (article 294 ).

    - Art. 161bis LC provides that total or partial invalidity cannot be a just cause for termination of employment.

    - Some union members, pregnant women and women returning from maternity leave enjoy protection against termination of employment under the "fuero laboral" in some circumstances (see special protection). This means that their dismissal must be authorized by a judge and can only take place on the grounds on conduct (see art. 174, 201, 243, LC)

    - Race, color, sex, age, marital status, trade union membership, religion, politic beliefs, nationality and social origins, language, sexual orientation, gender identity, physical appearance, illness, disability are prohibited grounds of discrimination in employment (art. 2 LC: general provision on non-discrimination in employment).


Workers enjoying special protection: workers' representatives; pregnant women and/or women on maternity leave; workers with family responsibilities; workers on temporary leave following an occupational disease or a work injury
Remarks:
  • - Under the LC, some workers benefit from the 'fuero laboral', which is a form of special protection against termination of employment. According to art. 174 LC, dismissal of those protected workers is subject to judicial authorization which can only be granted on the grounds of the worker's conduct or upon expiry of the agreed term of the contract or completion of the service for which the contract was made (art. 159, 160 LC).
    Workers protected by the 'fuero laboral' are:
    *Workers whose child/spouse/civil partner has died. They will enjoy the protection for one month after the death (article 66);
    * Workers who want to constitute a trade union in the company. They will be protected from 10 days prior to the constituent assembly until 30 days after (article 221);
    *Candidates for a union director position. They will be protected since the election date is set until the election is completed (article 238);,
    * Union directors and directors of federations, confederations, and workers' centrals during their terms of office and for six months thereafter (articles 224, 235, 243 and 274);
    * Employees involved in collective bargaining during the period starting 10 days before bargaining begins and ending 30 days after bargaining is completed (article 309);
    * Staff delegates during their terms of office and for six months thereafter (articles 229 and 243).
    * Pregnant women and working mothers up to one year after the end of the maternity leave (article 201);
    * Working father if he has taken parental leave (articles 197bis and 201);
    * Women and men who are single or widowed and they have expressed their wish to adopt a child according to the Adoption Act shall be entitled to one year's "protection from the day of the judicial decision granting the child' custody (article 201).
    - Art. 161 LC prohibits the dismissal grounded on economic reasons and the "desahucio" in the following cases:
    * Workers on sick leave
    * Workers on temporary work injury or illness leave


Procedural requirements for individual dismissals - 2018    

+ show references

Notification to the worker to be dismissed: written

Remarks:
  • See art. 161 and 162 LC.

Notice period:
Remarks:
  • - Dismissal without cause (desahucio) of persons in positions of trust, representatives or certain categories of domestic workers ("trabajador de casa particular") must be carried out in writing, 30 days in advance except if the employer pays the worker cash compensation equivalent to the last monthly remuneration earned. Copy of the notice shall be sent to the relevant labour inspectorate (art. 161 LC)
    - Dismissal based on the requirements of the undertaking: the worker must be given notice, copied to the relevant inspectorate, at least 30 days in advance (art. 162 LC).
    - If the employee is dismissed for conduct-related reasons as listed in art. 160 LC then notice must be sent promptly after the occurrence of the conduct.
    • tenure ≥ 6 months
      • economic dismissal - 30 day(s).
      • dismissal without cause ("Desahucio") - 30 day(s).
    • tenure ≥ 9 months
      • economic dismissal - 30 day(s).
      • dismissal without cause ("Desahucio") - 30 day(s).
    • tenure ≥ 2 years
      • economic dismissal - 30 day(s).
      • dismissal without cause ("Desahucio") - 30 day(s).
    • tenure ≥ 4 years
      • economic dismissal - 30 day(s).
      • dismissal without cause ("Desahucio") - 30 day(s).
    • tenure ≥ 5 years
      • economic dismissal - 30 day(s).
      • dismissal without cause ("Desahucio") - 30 day(s).
    • tenure ≥ 10 years
      • economic dismissal - 30 day(s).
      • dismissal without cause ("Desahucio") - 30 day(s).
    • tenure ≥ 20 years
      • economic dismissal - 30 day(s).
      • dismissal without cause ("Desahucio") - 30 day(s).

    Pay in lieu of notice: Yes

    Remarks:
    • - Economic dismissal: art. 162 LC
      - Desahucio: art. 161 LC

    Notification to the public administration: Yes

    Remarks:
    • Notification to the Labour Inspectorate, at the time the worker receives the dismissal notice is required for any type of dismissal.
      * Conduct-based dismissal: art. 162
      * Dismissal based on the requirements of the undertaking: art. 162 LC.
      * Dismissal without cause in the cases established in article 161 (desahucio): art. 161 LC.

    Notification to workers' representatives: No

    Approval by public administration or judicial bodies: No

    Remarks:
    • However, judicial authorization is required when the employer intends to dismiss workers who benefit from the "fuero laboral" (art. 174 LC - see special protection)

    Approval by workers' representatives: No

    Procedural requirements for collective dismissals for economic reasons (redundancy, retrenchment) - 2018    

    + show references

    Definition of collective dismissal (number of employees concerned):
    No statutory definition of collective dismissal for economic reasons.
    The LC stipulates that an employer can terminate a contract on the grounds of requirements of the undertaking, establishment or service, resulting from streamlining or modernization activities, reduced productivity, changes in market or economic conditions which impose the need to lay off one or more workers.

    Remarks:
    • Art. 161 (1) LC.

    Prior consultations with trade unions (workers' representatives): No

    Notification to the public administration: Yes

    Remarks:
    • Art. 162 LC: notification to the Labour Inspectorate at least 30 days in advance. Notification shall take place prior to any dismissal (concerning 1 or more workers) based on operational requirements of the undertaking as defined in art. 161 (1) LC.

    Notification to workers' representatives: No

    Approval by public administration or judicial bodies: No

    Approval by workers' representatives: No

    Priority rules for collective dismissals (social considerations, age, job tenure): No

    Employer's obligation to consider alternatives to dismissal (transfers, retraining...): No

    Priority rules for re-employment: No

    Severance pay and redundancy payment - 2018    

    + show references

    Severance pay:
    Remarks:
    • - Upon dismissal without cause (by way of desahucio), the workers are entitled to a statutory severance pay - Indemnización legal por años de servicio - (unless an individual or collective agreement is made with more favourable terms) equivalent to 30 days of the last monthly remuneration earned, for each year of service worked and fraction greater than six months. The upper limit is 330 days for workers with a contract in force for one year or more (sec. 163, LC). This applies to persons occupying positions of trust and persons representing the employer having general administrative competence. However domestic workers are entitled to a different indemnity.
      - The same amount is payable to a worker whose contract is terminated on the basis of the requirements of the undertaking (see below redundancy payment)
      - Upon termination of employment, regardless of the reason for termination, domestic workers are entitled to an indemnity to be funded by the employer's contributions to an insured pension fund equivalent to 4.11% of the monthly remuneration. The employer's contributions shall be paid for a period of 11 years which shall run from obligation to pay such contribution shall be for a period run from 1 January 1991 or the start date of employment, whichever is later (art. 163 LC).
      - There is a possibility for an agreement on a substitute termination indemnity (see below - "Notes / Remarks")

      Note that dismissals based on the worker's conduct (art. 160 LC) do not give right to severance pay.
      Similarly severance pay is not payable in the event of termination upon expiry of the agreed term of the contract or completion of the service for which the contract was made, termination due to force majeure or unforeseen event, resignation, mutual agreement, resignation or the death of the worker.
    • tenure ≥ 6 months: 0 day(s)
    • tenure ≥ 9 months: 0 day(s)
    • tenure ≥ 1 year: 30 day(s)
    • tenure ≥ 2 years: 60 day(s)
    • tenure ≥ 4 years: 120 day(s)
    • tenure ≥ 5 years: 150 day(s)
    • tenure ≥ 10 years: 300 day(s)
    • tenure ≥ 20 years: 330 day(s)
    Redundancy payment:
    Remarks:
    • Same as severance pay.
      *Art. 163 LC foresees that, in case of dismissal for the economic reasons listed in art. 161 LC, dismissed workers who have been working for at least 1 year are entitled to severance pay. This indemnity (unless an individual or collective agreement is made with more favorable terms) shall amount to 30 days of the last monthly remuneration earned, for each year of service worked and fraction of a year greater than six months. The upper limit is 330 days for workers with a contract in force for one year or more (see art. 163 LC).
      *See also substitute indemnity below under "Notes / Remarks"
    • tenure ≥ 6 months: 0 day(s)
    • tenure ≥ 9 months: 0 day(s)
    • tenure ≥ 1 year: 30 day(s)
    • tenure ≥ 2 years: 60 day(s)
    • tenure ≥ 4 years: 120 day(s)
    • tenure ≥ 5 years: 150 day(s)
    • tenure ≥ 10 years: 300 day(s)
    • tenure ≥ 20 years: 330 day(s)

    Notes / Remarks
    Substitute indemnity:
    Through the Administrators of Pension Funds (Administradoras de Fondos de Pensiones), a system of substitute indemnity payable regardless of the reason for termination has been created. There is the possibility for an agreement to be made between the employer and the employee on a substitute indemnity, from the beginning of the seventh year of employment up to the end of the 11th year of the employment relationship. Under these agreements, a monthly contribution of 4.11 per cent of the employee's monthly wage or salary, with the salary to which this percentage applies limited to 90UF, is deposited by the employer in an insured pension fund (sec. 164, LC).
    As of July 1, 2010, 1UF was equivalent to Ch$21,204.

    Avenues for redress (penalties, remedies) and litigation procedure for individual complaints - 2018    

    + show references

    Compensation for unfair dismissal - free determination by court: No

    Compensation for unfair dismissal - Legal limits (ceiling in months or calculation method):
    Compensation = severance pay (30 pays/year of service with a maximum of 330 days) increased by:
    - 30% if a dismissal based the requirements of the undertaking is declared unjustified, unfair or unlawful by the court.
    - 50 % if the court rules unjustified termination of employment due to unforeseen circumstances or force majeure;
    - 80% if a dismissal based on unduly conduct or serious breach of obligations set forth in the contract is declared unjustified
    - 100% if the alleged reasons for dismissal are serious misconduct, acts or negligence seriously affecting the safety of the establishment and deliberate material damages (art. 160, 1), 5) 6) LC) and the court rules that there were no plausible grounds for dismissal.

    Remarks:
    • See art. 168 LC.

    Reinstatement available: Yes

    Remarks:
    • There is no general right to reinstatement following unfair dismissal.
      However reinstatement is available to the worker in the event of discriminatory dismissal (that is dismissal based on: race, colour, sex, age, marital status, union association, religion, politic beliefs, nationality and social origin) and which is declared serious by the court: see art. 489 LC.
      Similarly, if a worker who is not protected under the "fuero laboral" is dismissed as the result of anti-union or unfair labour practices, he or she can opt for reinstatement (art. 294 LC).

    Preliminary mandatory conciliation: Yes

    Remarks:
    • - Judicial conciliation is part of the procedure before the labour jurisdiction: art. 453 2) LC.
      - Small claims proceedings (procedimiento monitorio) = value not exceeding 10 months' wages: mandatory extra-judicial conciliation before the Labour Inspectorate (art. 497 LC)

    Competent court(s) / tribunal(s): labour court

    Remarks:
    • Art. 420 a) LC: 'Juzgados de Letras del Trabajo'

    Existing arbitration: No

    Source of additional information - 2018    

    + show references