international employment law firm alliance L&E Global

Chile: New Draft Constitution’s Impact on Labour

AuthorsRicardo Tisi, Bárbara Zlatar and Ignacia López

In October 2020, a referendum was held in Chile leading to either the approval or rejection of a new draft Constitution. A Constitutional Convention was elected, composed of 155 persons expressly devoted to proposing a draft Constitution within the 1-year term that is set to expire on 4 July 2022.

The proposed new Constitution is nearly ready, and the draft must be approved or rejected in a referendum scheduled for 4 September 2022.

The project and its potential approval will undoubtedly have an impact on labour matters.

First, the proposal imposes on the Government the duty to guarantee the right to decent work (a concept that has already been developed by the ILO). This idea includes the following rights: (i) equitable working conditions, which translates into equitable, fair and sufficient remuneration leading to equal pay for equal work; (ii) health and safety at work; (iii) rest; (iv) enjoyment of free time; (v) digital disconnection; (vi) guarantee of indemnity; and (vii) full respect for fundamental rights at work.

Also, the proposal prohibits any type of discrimination that is not based on competence or suitability as well as arbitrary dismissals.

Secondly, the proposed new constitutional text includes the employees’ participation in company decisions (specifically through unions). The regulation of the mechanisms to exercise this right should be addressed by law.

Regarding union freedom, the draft addresses three relevant aspects:

  • Expansion of the right to unionisation. This includes the possibility of public sector employees to form a union and the possibility of joining them at any level (company, branch or territory). In addition, the unions are considered as the only negotiating entities (excluding groups especially constituted for this purpose).
  • Extension of the right to collective bargaining. This includes both public and private sector employees. Likewise, the possibility of negotiating by branch, sector or territory is extended. The matters subject to negotiation are expanded.
  • Right to strike. The law may not prohibit the right to strike (except in very exceptional cases involving essential services) and is detached from the collective bargaining process.

If the proposal is approved, the principles enshrined in the new Constitution would come into force immediately upon publication in the Official Gazette. However, bills on the matters to be regulated must be sent by the President to the Congress within a limited period, ranging from 18 to 24 months.

The proposed new draft Constitution will be submitted for a national and mandatory referendum on 4 September 2022.