LEGALINK CROSS-BORDER LAYOFFS QUESTIONNAIRE

The Chilean Labor Code in its Article N° 160 enumerates the grounds for termination of employment without the right of an indemnification.  These grounds are the following:

1. Serious illegal conduct, properly verified, which is:      
   a) Worker’s lack of probity in the performance of functions;
   b) Sexual harassment;
   c) Aggressive conduct from the worker against the employer or of any worker who evolves in the same company;
   d) Insults from the worker to the employer; and
   e) Immoral conduct of the worker who affects the company where he is employed
2. Negotiations that the worker executes in the same business and that have been prohibited in the respective contract by the employer.
3. Absence to work without justified cause during two consecutive days, two Mondays in the month or a total of three days during equal period of time.  Also, the unjustified absence, or without supporting information, from the worker that is charged with any activity or machine whose abandonment brings a serious disturbance in the work.
4. Abandonment of work, being understood as:
   a) The untimely and non justified abandonment of the place of work during working hours, without permission of the employer; or
   b) To refuse to work without justified cause in the activities settled in the contract.
5. Acts or omissions that affect the security of the establishment operations, or the worker’s health.
6. The intentional material damage of the facilities, machineries, tools, work equipment, products or merchandizes.
7. Serious breach of contractual obligations.
   

The Chilean Labor Code in its article N° 162 establishes the procedure for terminating an employee or group of employees:

The employer must communicate the termination (in written form) to the workers, personally or by certified letter sent to the address indicated in the contract, expressing the cause invoked and the facts on which the termination is based.

This communication has to be sent within the three following working days that follow the one in which the worker abandoned his work.

Copy of the communication has to be sent to the respective Labor Bureau, within the same term. The Labor Bureau will have an updated registry of the communications of contract terminations that are sent.

When the employer invokes as cause “Needs of the company,” the communication will have to be given to the worker, with copy to the Labor Bureau, with at least thirty days of anticipation. Nevertheless, this anticipation will not be required when the employer pays to the worker an indemnification equivalent to the last monthly remuneration. The communication to the worker will have, in addition, to indicate the total amount to pay.

The employer will have to inform the state by letter of the social security quotes until the last day of the month previous to the one of the dismissal.  If the employer has not paid any of the quotes at the time of the dismissal, the dismissal will not produce the effect of putting term to the work contract.

However, the employer will be able to confirm the dismissal by paying and communicating the payment of the social security quotes, by certified letter accompanied with the documentation emitted to the corresponding institution.

Notwithstanding, the employer will have to pay to the worker the remunerations and other benefits settled in the work contract during the period between the date of the dismissal and the date of the communication to the worker.

The infractions to the Labor Code and its complementary laws are sanctioned with monetary penalties, according to the importance of the infraction and the number of workers that the company has with work contract.

Despite the previous paragraph, if the employer has nine or less workers, the Labor Bureau will be able to authorize, at the employer’s request and only once a year, the substitution of the penalty imposed with the obligatory attendance to labor courses dictated by the Labor Bureau which will last no longer than two weeks.

Once the substitution of the penalty is authorized, if the employer does not attend to the courses within the term of two months, the Labor Bureau will apply the originally imposed penalty, increased in a one hundred percent.