The Department of Labor has issued two rulings so far. Below an executive consolidated summary.
- Different ways to keep the labor contract in force during the emergency:
- To agree on rendering services from home through technological tools when it is possible.
- To agree different work shifts to avoid crowded environments, either at the work place or when using public transportation at rush hours
- To agree on an individual basis to taking vacation days in advance
- Employer can order collective vacation to all employees or to employees working in an entire section. No less than 15 business days, once a year
- To agree a labor contract suspension, either with no compensation, full compensation or a lower compensation
- To agree a lower working hours schedule.
- Employer must take preventive actions to protect employees (grant permanent information to employees, grant time to employees to get tested at medical centers, fulfil quarantines ordered by the health authority and preventive actions recommended by the company´s Hygiene and Safety Committee). When employers do not fulfil that obligations, employees can be deemed allowed to leave the work place, arguing that their life and/or health are at risk
- Closing of activities ordered by health authorities: that means a force majeure and employers are exempt from paying salaries. Labor contracts are deemed suspended.
- Closing of activities ordered by the employer as a preventive action or due a business reduction: that does not mean a force majeure and employers should continue to paying salaries. See above in paragraph 1 what can be agreed.
- Medical leaves when employees get Covid-19: a medical leave certificate must be issued by a doctor stating how many days of leave, rest or quarantine are required. Then, social security institutions cover the salary. When it is evidenced that an employee got Covid-19 at the work place, labor accidents and professional diseases insurance covers the salary. Caps apply.
- To diminish salaries due to critical economic /financial /revenues /business /redundancy /market grounds: under Chilean laws, employers are not allowed to diminish salaries unilaterally. However, as already said, that can be agreed with employees, as well as to diminish working hours.
- Economic reasons above, arising from this emergency, could ground a labor termination. The termination letter must contain an accurate description of those economic grounds (i.e. would not be enough just to state “due to Covid-19 emergency”). Severance applies.
Bills of Law.
The Government has announced to pass to the Congress two bills of law for discussion:
- Bill of Law to protect salaries if the health authority closes a company or activity. In such a case, employers are exempt from paying salaries and employees would receive a compensation from the general unemployment insurance, which will receive exceptional funds from the Government. Employers should continue to afford the payment of all social security contributions.
- Bill of Law to protect employment positions, to avoid terminations: under some legal requirements, some companies and employees will be able to agree a lower working hours schedule and a lower salary. Employees would receive a compensation from the same unemployment insurance. This new law would be in force for 1 year and the agreements will be permitted up to 5 months.
Author: Ricardo Tisi.
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