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Chile - Compensation & Benefit Legislation

CAPITAL

Santiago

 

CLIMATE

Temperate climate: desert in north, Mediterranean in central region and cool and damp in the south.

 

LANGUAGES

Spanish

 

LEGAL SYSTEM

Based on Code of 1857 derived from Spanish law and subsequent codes influenced by French and Austrian law. Judicial review of legislative acts in the Supreme Court; Chile has not accepted compulsory ICJ jurisdiction.

 

CURRENCY

Chilean peso (1 USD = 698.480 CLP as of March 1, 2002)

 

CHILE - COST-OF-LIVING

ERI's Relocation Assessor is a recommended source for cost-of-living data.

 

CHILE - EMBASSY/CONSULATES

U. S. Embassy at Santiago

Avenida Andres Bello 2800

APO AA 34033

Santiago, Chile

Telephone: [56] (2) 232-2600

Fax: [56] (2) 330-3710

http://www.usembassy.cl/

 

Embassy of Chile at Washington D.C.

1732 Massachusetts Avenue N.W.

Washington D.C. 20036

Telephone: (202) 785-1746

Fax: (202) 887-5579

http://www.chile-usa.org/

 

CHILE - HOLIDAYS

 

CHILE - MINIMUM AGE

Current law allows children between the ages of 16 and 18 to work with the express permission of their parents or guardians. The law allows 15-year-olds to work under certain conditions; their parents must consent, they must have finished compulsory schooling, and they may only perform light work not requiring hard physical labor, or constituting a threat to health and childhood development.

 

Additional provisions in the law protect workers under 18 years of age by restricting the types of work open to them (for example, they may not work in nightclubs), and by establishing special conditions of work (they may not work more than 8 hours in 1 day). The minimum age to work in an underground mine is 21 years; special regulations govern the ability of 18- to 21-year-olds to work at other types of mining sites.

 

(Section 6.d. Acceptable Conditions of Work, Chile – Report of Human Rights Practices, 2001, U.S. Department of State.)

 

CHILE - MINIMUM REMUNERATION

The minimum wage as of December 31, 2001 was approximately $157 (105,000 pesos) net of deductions per month. This wage is designed to serve as the starting wage for an unskilled single worker entering the labor force and does not provide a worker and family with a decent standard of living. The minimum wage for domestic servants is 75 percent of that for other occupations.

 

The law sets minimum wages, and the minimum wage is adjusted annually. A tripartite committee comprising government, employer, and labor representatives normally suggests a minimum wage based on projected inflation and increases in productivity.

 

(Section 6.e. Acceptable Conditions of Work, Chile – Report of Human Rights Practices, 2001, U.S. Department of State.)

 

CHILE - REMUNERATION

ERI's Geographic and Salary Assessors are recommended sources for international remuneration covering 189 countries.

 

CHILE - REPORT OF HUMAN RIGHTS PRACTICES (2001, U.S. DEPARTMENT OF STATE)

Section 6 Worker Rights

 

a. The Right of Association

 

Workers have the right to form unions without prior authorization and to join existing unions. The work force is estimated at 5.87 million persons, of whom 3.7 million are salaried. Union membership is approximately 580,000, or roughly 10 percent of the work force. Police and military personnel may not organize collectively. Members of unions are free to withdraw from union membership. The law prohibits union shops.

 

The Labor Code permits nationwide labor centrals; the Unified Workers Central (CUT) is the largest and most representative of these. Labor unions are effectively independent of the Government, but union leaders usually are elected from lists based on party affiliation and sometimes receive direction from party headquarters. Political activities or affiliations of unions or union officials are not restricted, although currently serving union officials are not allowed to hold public office. Registering a union is a simple process. On September 28, President Lagos signed into law a major reform of the Labor Code, which went into effect on December 5. Among various other provisions aimed at facilitating the formation of unions and promoting collective bargaining, the reform freed unions from government regulation of their internal organization and permitted unions to be structured along geographic as well as functional lines.

 

Employees in the private sector have the right to strike; however, the Government regulates this right, and there are some restrictions. The law permits replacement of striking workers, subject to the payment of money distributed among the strikers. Public employees in theory do not enjoy the right to strike, although government teachers, municipal, and health workers have struck in the past. The law proscribes employees of some 30 companies--largely providers of essential services (e.g., water and electricity)--from striking; it stipulates compulsory arbitration to resolve disputes in these companies. There is no provision for compulsory arbitration in the public sector. Strikes during the harvest season are prohibited.

 

Employers must pay severance benefits to striking workers and must show cause to dismiss workers.

 

There were a number of strikes throughout the year. In May a strike against the bicycle manufacturer Bianchi received considerable attention when one of the striking workers was struck and killed by a bus carrying nonstriking workers attempting to enter the facility. The case remained under investigation for possible criminal charges at year's end.

 

The CUT and many other labor confederations and federations maintain ties to international labor organizations.

 

b. The Right to Organize and Bargain Collectively

 

Despite legal provisions for collective bargaining, before the modifications that went into force on December 1 the Labor Code included provisions that made it difficult for trade unions to organize in many sectors. As a result, the majority of workers work under individual contracts. Employers say that this is due to the workers' preference, distrust of union leaders, and loyalty to companies. Union leaders counter that the Labor Code--which does not allow union shops--prevents successful organization in many sectors. Unions cite the widespread practices of subcontracting, individual contracts, and temporary employment as ways that employers resist unionization. In June the International Labor Organization (ILO) requested that the Government amend its legislation clearly to prevent the practice of "multiple individual contracts" when a representative trade union exists and to ensure that employers' direct negotiation with workers does not create difficulties for, or weaken the position of, trade unions. The modifications to the Labor Code that were approved in September and went into force on December 1 addressed this issue.

 

The modifications of the Labor Code are also expected to make union organizing easier and preliminary data on new union formation after December 1 appear to confirm those expectations. Workers engaged in the formation of a union may not be discharged during the period from 10 days before to 30 days after the vote to unionize. Likewise, the workers engaged in collective bargaining are immune for 10 days before the presentation of a contract proposal until 30 days after it is signed. They are also entitled to all pertinent financial information from the company for the last 2 years. The modifications also greatly increase fines for violating immunities enjoyed by union leaders or artificially dividing up a company for the purpose of avoiding provisions in the code or resisting unionization. To enforce the new provisions, the Labor Directorate under the Ministry of Labor plans to hire 443 new employees, including 300 labor inspectors, almost doubling the number of field inspectors.

 

Amendments to the Labor Code resulting from the September reform placed additional limits on the causes for dismissal (for example, misconduct outside the workplace is no longer grounds for dismissal) and significantly increased the penalties for unjustified dismissals. Employees who believe they have been dismissed unfairly or dismissed owing to their trade union activities file complaints with the Ministry of Labor and ultimately, the labor tribunals. According to the revised labor code, if the dismissal is found to be related to trade union activity on the part of the employee, he or she may choose between reinstatement with back wages or an additional compensatory payment. The burden of proof rests with the employer in cases in which alleged illegal antiunion activity is supported in a report by a labor inspector.

 

During the year, there continued to be allegations that employers dismissed workers for union activity and attempted to avoid a complaint by immediately paying them some multiple of the normal severance pay. During the year, labor leaders complained that companies invoked the law's needs-of-the-company clause to fire workers after a union had signed a new contract. Workers often are reluctant to contest these actions because of the huge backlog in the Labor Tribunals. This is expected to change now that the Labor Directorate may become a party to these cases. A reform of the Labor Tribunals also is being contemplated to separate pension complaints, which constitute the bulk of pending cases, from disputes over unfair labor practices.

 

Temporary workers--defined in the Labor Code as those in agriculture and construction, as well as port workers and entertainers--may form unions, but their right to collective bargaining is limited. The recent modification of the Labor Code contains reforms aimed at facilitating collective bargaining in the agricultural sector but it is still dependent on employers agreeing to negotiate. Inter-company unions are permitted to bargain collectively only if the individual employers agree to negotiate under such terms.

 

Labor laws apply in the duty free zones; there are no export processing zones.

 

c. Prohibition of Forced or Compulsory Labor

 

The Constitution and the Labor Code prohibit forced or compulsory labor, and it is not known to occur. While the Labor Code does not specifically prohibit forced and bonded labor by children, there were no reports of such practices.

 

d. Status of Child Labor Practices and Minimum Age for Employment

 

The law restricts child labor; however, it is a problem in the informal economy. The law allows children between the ages of 16 and 18 to work with the express permission of their parents or guardians. The law allows 15-year-olds to work under certain conditions; their parents must consent, they must have finished compulsory schooling, and they may only perform light work not requiring hard physical labor, or constituting a threat to health and childhood development. Additional provisions in the law protect workers under 18 years of age by restricting the types of work open to them (for example, they may not work in nightclubs), and by establishing special conditions of work (they may not work more than 8 hours in 1 day). The minimum age to work in an underground mine is 21 years; special regulations govern the ability of 18- to 21-year-olds to work at other types of mining sites.

 

Labor inspectors enforce these regulations, and compliance is good in the formal economy; however, many children are employed in the informal economy. UNICEF estimated that approximately 107,000 children between the ages of 12 and 19 work. A government study in 1996 estimated that 15,000 children between the ages of 6 and 11 and 35,000 children between the ages of 12 and 14 were in the work force. A 1998 Catholic Church study estimated that 50,000 children under the age of 15 worked. The majority of these were males from single-parent households headed by women; among these were children who worked more than 40 hours per week and did not attend school. Children sell chewing gum on the street, wash windshields, work as street performers, beg, or help their parents to harvest crops. Child prostitution also is a problem. The Ministry of Labor convenes regular meetings of a tripartite group (business-labor-government) to monitor progress in eradicating child labor. The Labor Code does not specifically prohibit forced and bonded labor by children, but such practices were not known to occur (see Section 6.c.).

 

e. Acceptable Conditions of Work

 

The law sets minimum wages, and the minimum wage is adjusted annually. A tripartite committee comprising government, employer, and labor representatives normally suggests a minimum wage based on projected inflation and increases in productivity. The minimum wage as of December 31, 2001 was approximately $157 (105,000 pesos) net of deductions per month. This wage is designed to serve as the starting wage for an unskilled single worker entering the labor force and does not provide a worker and family with a decent standard of living. The minimum wage for domestic servants is 75 percent of that for other occupations. The Government estimates that the percentage of those working at or below minimum wage rose from 9.1 in 1998 to 14.4 in 1999. More recent figures are not yet available. According to the Government, of the workers who earn the minimum wage, approximately 43 percent are between the ages of 15 and 19.

 

The law sets hours of work and occupational safety and health standards. The legal workweek is 48 hours and is scheduled to be reduced to 45 hours on January 1, 2005. The maximum workday length is 10 hours, but positions such as caretakers and domestic servants are exempted. All workers enjoy at least one 24-hour rest period during the workweek, except for workers at high altitudes who voluntarily exchange a work-free day each week for several consecutive work-free days every 2 weeks.

 

Occupational health and safety are protected under the law and administered by both the Ministries of Health and of Labor. The Government has increased resources for inspections by over 60 percent since 1990 and plans almost to double the current number over the next 3 years, while targeting industries guilty of the worst abuses. As a result, enforcement is improving, and voluntary compliance is fairly good. Insurance mutual funds provide workers' compensation and occupational safety training for the private and public sectors. Workers who remove themselves from situations that endanger their health and safety have their employment protected if a real danger to their health or safety exists.

 

f. Trafficking in Persons

 

There are no laws that specifically prohibit all forms of trafficking in persons; however, the law makes it a crime for anyone to promote or facilitate the entry to or exit from the country of persons for the purpose of facilitating prostitution. Sanctions are increased in cases in which the victim is a minor; in which violence or intimidation is used; if deception or abuse of authority is involved; if the victim is related or under the tutelage of the perpetrator; if advantage is taken of a victim's circumstances or handicap; or if the action is of a recurring nature. There were no reports that persons were trafficked to or from the country.

 

The Government employs various measures to help educate the general population on trafficking. For example, the Carabinero Public Relations Department has carried out lectures on prevention intended for children, adolescents, and adults with the purpose of preventing the disappearance of minors and adolescents as well as avoiding deception. Other organizations such as Mother's Centers (CEMA), and the National Service for Minors also offer support programs to prevent trafficking.

 

If cases of trafficking in persons were to arise, the police, Justice and Interior Ministries, SERNAM (if the cases involved women), or SENAME (if the cases involved children) would respond.

 

CHILE - SOCIAL SECURITY

Social Security Office of International Programs:

 

http://www.ssa.gov/SSA_Home.html

 

CHILE - STANDARD WORKWEEK

The legal workweek is 48 hours and is scheduled to be reduced to 45 hours on January 1, 2005. The maximum workday length is 10 hours, but positions such as caretakers and domestic servants are exempted. All workers enjoy at least one 24-hour rest period during the workweek, except for workers at high altitudes who voluntarily exchange a work-free day each week for several consecutive work-free days every 2 weeks.

 

(Section 6.e. Acceptable Conditions of Work, Chile – Report of Human Rights Practices, 2001, U.S. Department of State.)