Chilean legislation provides three categories of labour contracts: individual labour contracts, collective labour contracts and special contracts.
The minimum provisions that must be included in the individual labour contract, such as date and place of the contract, the identity of the parties, the position of the employee and job description, the place of work, the remuneration to be paid by the employer, the terms of payment (at maximum 1-month intervals), workday, the duration of employment and the benefits in cash or in kind to be provided by the employer.
Collective labour agreements are contracts executed between employers and employees with the purpose of establishing common labour conditions, remunerations or other benefits in kind or money, for a fixed period of time.
The law also provides for several other special labour contracts. Each of these contracts have their own characteristics and specifications, e.g. the apprenticeship contract which is restricted to individuals under 21 years of age; farm employees’ contracts; contracts for employees on ships or at sea and temporary dock employees, and contracts for domestic help.
In Chile, it is common that large companies subcontract companies to perform specific tasks or render special services such as security and cleaning services, catering, etc.
The parties may either agree on an indefinite contract or places limits on terms (to the completion of a particular job to be performed by the employee, or else agree on a fixed period of time). In this last case, the contract’s term cannot exceed one year, or two years in the case of managers, professionals and technicians. However, local law allows term extension (which cannot surpass the overall time previously mentioned). If the employee continues rendering services for the same employer after the contract term’s expiration, it will automatically become indefinite.
It is also important to consider that in November 2018, certain changes were introduced to contracts for a special job task. The new scheme provides that different tasks or stages of a specific work may not be individually considered as two different successive contracts for it will be legally presumed as indefinite. Also, any contract engaging permanent services will not be deemed as a contract for a specific job. Lastly, these employees are entitled to vacation and a special kind of termination severance if certain requirements are fulfilled.
A labour trial before the courts can last, ordinarily, between 8 months to 2 years.
To terminate an employment contract for cause, the employer can produce an immediate termination, without notice requirements. Other terminations require 30 days’ notice. Immediate terminations are allowed as well, if paying a severance in lieu of notice (1 month capped remuneration).