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6. Cost-Reduction Strategies

To what extent can employers implement the following cost-reduction strategies as a result of COVID-19, and what are the primary limitations on each? 

  • Furloughs.

By agreement with employees.

  • Salary reductions.

By agreement with employees.

  • Redundancy.

Permitted except as it regards employees covered by the special unemployment insurance status, when the labour contract is suspended.

  • Facility closure.

Permitted. It is important to point out that when the closure has not been imposed by the authorities, the employer shall continue paying salaries.

Any questions

Ask our member firm Cariola Díez Pérez-Cotapos in Chile