Employment Law Overview Chile

Introduction

The Chilean Labour Statute contains several minimum rights granted to employees that must be honored by employers. Those minimums cannot be waived by employees. The most relevant minimum labour rights are: minimum legal wage (currently approx. US$425); 15 working days’ vacation per year; profit sharing; maximum 45 hours of work per week; severance; and social security contributions.

Key Points

• Chile’s labour laws are established as a general system to protect employees.
• Terminations in Chile -both for cause and without cause- must be duly grounded in writing.
• Labour Courts normally rule looking for employees´ protection.
• Labour Courts ponder the evidences according to the “rule of reason”.

Legal framework

The Chilean Labour Statute is basically composed of the Labour Code and several special social security laws.

New Developments

In the year 2020, for the first time, the Labour Code was amended to regulate, in full, remote work. As a general rule, in Chile an employer cannot terminate a labour contract at will. Employers must ground terminations on a company-related business need. Recently, courts have become more and more strict when considering if the invoked business grounds are enough to justify a termination.