Historically in Chile the labour statute has allowed employees to be hired to perform a specific job. The labour contract ends when the job is terminated. This has typically been used in the construction industry. Termination of this kind of labour contract does not trigger severance, as indefinite term contracts do.
As from January 2019, Law N°21.122 entered into force and provides the following main changes to protect employees hired under this kind of employment contract:
- Different steps of the same job cannot be governed by 2 (two) or more consecutive employment contracts. If so, the contract will be considered for an indefinite term for all legal effects.
- Employees hired for a specific job, performing more than 1 (one) year, will have the same vacation rights as employees hired for an indefinite term.
- As from January 1, 2022, labour contracts executed to perform a specific job, if in force 1 (one) month or more and the company terminates the same, employees will be entitled to severance amounting 2,5 (two and a half) days of compensation per each month or fraction over a 15 (fifteen) days-worked-period.
- Meanwhile, between January 2019 and December 2021, this severance pay basis will range between 1 (one) and 2 (two) days of compensation per each month or fraction over a 15 (fifteen) days-worked-period.