Chile: Department of Labour case law

A labour contract termination in Chile must be communicated in writing by the employer to the dismissed employee. The termination letter must set forth the severance amount that the employee will receive upon termination, when signing a labour release agreement. The Department of Labour has recently issued a judgement stating that the communication means an irrevocable offer of payment and that the employer must honour the severance amount set forth in the letter. However, that judgement recognises two exceptions in which the offer cannot be enforceable : (i) if during the 30 days termination notice an employee incurs in a conduct that can ground a termination for cause; and (ii) if an employee challenges the business grounds invoked by the employer to terminate the labour contract.