CHILE: An Introduction to Labour & Employment

The following overview first appeared in Chambers Latin America 2024 and is awaiting update from the firm.

This year, 2024, marks a significant change to labour legislation in Chile. The Law for the Reconciliation of Family Life and Work and the Law for the Reduction of Working Hours (also known as the "40 Hours Law") have entered into force. In August 2024, the so-called Karin Law, which addresses workplace harassment, sexual harassment, and violence, will enter into force.

Law on Reduction of Working Hours 

Law number 21.561 modifies the Labour and Employment Code to reduce the weekly working hours; this reduction will be progressive, reducing to 44 hours per week maximum in 2024, 42 hours per week in April 2026, and 40 hours per week in April 2028. The hours per week may be distributed in no less than five, nor more than six days per week. Companies implementing a 40-hour work week may distribute it in no less than four days per week. The workday may be distributed weekly, or in cycles of up to four weeks averaging the proportional reduction of hours indicated for each implementation period.

The Law also limits the hypotheses under which an employee may be exempted from the workday limit and, therefore, won't register attendance or be entitled to overtime payment. These categories refer to workers who render services as managers, administrators with administrative powers, and all those who work without immediate superior supervision due to the nature of the work performed.

It also establishes a time band for workers who are fathers and mothers of minors up to 12 years of age and for those who have the personal care of such minors to anticipate or delay the beginning of their work by up to one hour. This will also determine the anticipation or delay of the departure time, indicating exceptions when the employer could refuse it due to the nature of the services rendered by the worker.

The Law incorporates an alternative for overtime compensation. It can be agreed that these are not paid in money but compensated with holidays, at the rate of 1.5 hours of holiday for each extra hour worked, with a maximum of five days of holiday -due to overtime- for each year of validity of the employment contract.

In the case of exceptional workdays, a maximum weekly average of 42 hours will be established in 2028. Workers will have the right to the number of additional annual rest days due to the difference with the ordinary working day of 40 hours, which may be compensated in money.

Law for the Reconciliation of Family Life and Work 

This Law has followed the guidelines and provisions established by the International Labor Organization (ILO), the United Nations Convention on the Rights of the Child, and the Convention on the Elimination of All Forms of Discrimination against Women (CEDAW).

Its purpose is to encourage and protect the co-responsibility of fathers and mothers in the care of children, redefining the activities associated with maternity and paternity to ensure equal opportunities in the world of work.

It incorporates a right for workers who have the personal care of a person under 14 years of age, or under 18 years of age with a disability or severe or moderate dependency situation to request their employer to make preferential use of legal vacations during school vacations; and also the possibility of modifying their shifts or working day.

Likewise, it incorporates a duty of the company to offer telework or remote work to the worker who has the personal care of a person under 14 years of age or of a person with severe or moderate disability or situation of dependency, regardless of age. The aforementioned right is not absolute; the Law contemplates certain hypotheses that enable the employer to refuse this modality depending on the nature of the applicant's functions.

Karin Law on Labour, Sexual Harassment and Violence in the Workplace 

This Law will come into force on August 1, 2024. Its purpose is to develop labour relations in a violence-free environment that is also compatible with the dignity of the person and with a gender perspective, adopting measures to promote equality and eradicate discrimination.

To this end, it restructures the legislation by incorporating a new definition of harassment in the workplace, in which repetition of behaviours is no longer required to be in front of this conduct, being able to exist by a single behaviour that threatens or harms the worker. In addition, it incorporates a new concept: "violence at work", which is exercised by persons outside the labour relationship against workers.

It imposes the obligation to generate a protocol for the prevention of sexual harassment, labour harassment, and violence at work, which must contain measures to prevent, investigate, and sanction such conduct in accordance with the nature of the services.

The Law establishes an obligation to investigate complaints of sexual harassment, workplace harassment and workplace violence, whether written or verbal. The investigation must be governed by the principles of confidentiality; impartiality; celerity; and gender perspective. The procedure is regulated by law and will also be regulated by a regulation issued by the Ministry of Labor and Social Welfare, which is still pending.

In addition to these laws, two in force and one soon to be in force, certain bills are moving in Congress which, if approved, will generate changes in remunerations, social security and organisation of the companies. A bill is under discussion that seeks to limit mass layoffs when they involve at least 10% of the company's staff, with prior consultation with the unions if they exist or with the company's workers. Finally, the pension reform bill is under discussion, which has involved intense negotiations between the different sectors and political actors.