ESTABLISHES RULES ON TERMINATION OF EMPLOYMENT AND STABILITY IN EMPLOYMENT Having present that the H. National Congress has given its approval to the following Bill: " Article 1 °.-The contract of employment will end in |! |the following Cases: 1. Mutual agreement of the parties. 2.-Renunciation of the worker, giving notice to his |! |employer thirty days in advance, at least. 3.-Death of the worker. 4.-Expiration of the period agreed in the contract. |! | Fixed term contract duration will not exceed |! |one year. The worker who has provided services |! |discontinuos under more than two term contracts, |! |for twelve months or more in a period of fifteen months, |! |counted from the first hiring, will be presumed |! legally it has been hired for a duration |! |indefinite. Dealing with managers or people who have a |! |professional or technical title awarded by a |! |higher education institution of the State or |! |recognized by this, the duration of the contract will not be able to |! |exceed two years. The fact of continuing the worker by lending |! |services with knowledge of the employer after |! |expired the term, transforms it into contract of duration |! |indefinite. The same effect will result in the second |! |renewal of a fixed term contract. 5.-Conclusion of the job or service that gave origin |! |the contract. 6.-Fortuitous case or force majeure. Article 2 °.-The contract of employment ends without |! |right to compensation when the employer gives you |! |put term by invoking one or more of the following |! |causal: 1.-Lack of probity, factways, injuries or |! |serious immoral conduct duly checked. 2.-Negotiations executed by the worker within |! |of the turn of the business and which would have been prohibited by |! |written in the respective contract by the employer. 3.-No worker's attendance at work without |! |cause justified for two days in a row, two Mondays |! |in the month or a total of three days during the same period |! |time; likewise, the unjustified lack, or without notice |! worker who is in charge |! |an activity, faena or machine whose abandonment or |! |standstill means a serious disturbance in the |! |march of the work. 4.-Abandonment of the work by the worker, |! |understanding by such: a) The untimely and unjustified departure of the |! |worker of the site of the faena and during the hours of |! |work, without permission of the employer or of who |! |represent, and b) The refusal to work without cause justified in |! |the faenas agreed in the contract. 5.-Acts, omissions or reckless imprudence that |! |affect the security or the functioning of the |! |establishment, the security or the activity of the |! |workers, or the health of these. 6.-The material damage intentionally caused |! |on the premises, machinery, tools, useful |! |work, products or goods. 7.-Serious breach of the obligations that |! |imposes the contract. Article 3 °.-Without prejudice to the |! |preceding articles, the employer may terminate |! |the employment contract by invoking as a causal the |! |needs of the company, establishment or service, |! |such as those arising from the rationalization or |! |modernization of the same, low in productivity, |! |changes in market conditions or economy, |! |that make necessary the separation of one or more |! |workers, and lack of employment or technical adequacy |! |of the worker. In the case of workers who have power to |! |represent the employer, such as managers, |! |submanagers, agents or proxies, provided that, in all |! |these cases, are endowed, at least, with powers |! |general administration, and In the case of the |! |workers of particular house, the contract of work |! |may additionally terminate written eviction of the |! |employer, which must be given thirty days of |! |anticipation, at least, with copy to the Inspection of the |! | Work respective. However, it will not be required this |! |anticipation when the employer will pay the worker, |! |at the time of termination, an indemnity in |! |cash equivalent to the last remuneration |! |monthly accrual. It will also govern this rule being treated |! |of posts or jobs of the exclusive trust of the |! |employer, whose character of such emane of nature |! |of the same. The causes mentioned in the previous incites no |! |may be invoked with respect to workers who |! |enjoy common sick leave, accident of the |! |work or occupational disease, granted in |! |conformity to the legal norms which regulate the |! |matter. Article 4.-If the employment contract terminates in accordance with Article 1 (5) or (6), or if the employer terminates it by application of one or more of the grounds referred to in Article 2, it shall inform the worker in writing, in person or by registered letter sent to the address indicated in the contract, expressing the invoked causes, the facts in which it is founded and the state in which the pre-viewing impositions are found. This communication shall be delivered or sent, within three working days of the worker's separation. In the case of the causal link referred to in Article 1 (6), the period shall be six working days. Copy of the notice referred to in the preceding paragraph must be sent to the respective Labour Inspectorate within the same period. The Labor Inspections shall have a record of the contract termination communications sent to them, which shall be kept up to date with the notices received in the last thirty working days. Where the employer invokes the causal link referred to in the first paragraph of Article 3, the notice shall be given to the worker, with a copy to the respective Labour Inspectorate, at least thirty days in advance. However, this anticipation will not be required when the employer will pay the worker a replacement cash allowance from the advance notice, equivalent to the last accrued monthly remuneration. The communication to the worker must also indicate precisely the total amount to be paid in accordance with the provisions of the following Article. Errors in connection with such communications or their omission shall not invalidate the termination of the contract, without prejudice to the administrative penalties provided for in Article 451 of the Labour Code. Article 5.-If the contract has been in force for one year or more and the employer shall terminate it in accordance with Article 3, it shall pay the worker, at the time of termination, the compensation for years of service which the parties have agreed individually or collectively, provided that it is higher than that set out in the following paragraph. In the absence of this provision, in addition to the fact that it does not comply with the requirement set out in the preceding paragraph, the employer must pay the worker an allowance equivalent to 30 days of the last monthly remuneration accrued for each year of service and a fraction of more than six months, continuously provided to that employer. This allowance will have a maximum limit of three hundred and thirty days ' remuneration. The compensation referred to in this Article shall be compatible with the replacement of the prior notice corresponding to the worker, as laid down in the second indent of Article 3 ° and in the fourth indent of Article 4 ° of this law. The provisions of the preceding paragraphs shall not apply in the case of termination of the contract of workers at home, in respect of which the following rules shall apply: (a) They shall be entitled, whatever the cause arising from the termination of the contract, to an indemnity to any event which shall be financed by an employer's contribution, equivalent to 4,11% of the taxable monthly remuneration, which shall be where appropriate, by the provisions of Articles 7 and 8 of this Law, and (b) the obligation to make the contribution shall be for an 11-year period in respect of each worker, which shall be counted as from 1 January 1991 or from the date of the start of the employment relationship, if any later. The amount of the compensation will be determined by the contributions corresponding to the respective period, plus the profitability that has been obtained from them. Article 6.-Notwithstanding the above, the parties may, at the beginning of the seventh year of the employment relationship, replace the compensation which is established there by an indemnity for any event, i.e. the reason for the termination of the employment contract, whatever the cause of the contract, only in respect of the period after the first six years of service and until the end of the eleventh year of the employment relationship. The replacement allowance must be entered in writing and the contribution may not be less than the equivalent of 4.11% of the monthly remuneration of the taxable amount payable by the employee as from the date of the agreement. This percentage shall be applied up to a maximum remuneration of 90 promotion units. Article 7.-In cases where the replacement allowance provided for in the previous Article is agreed, the employer must deposit monthly, in the Pension Fund Manager to which the worker is affiliated, the percentage of the monthly remuneration of the taxable nature of the taxable person who has been fixed in the corresponding covenant, which shall be the employer's responsibility. Such contributions shall be deposited in a special savings account to be opened by the Pension Fund Administrator to each worker, who shall be governed by the provisions of paragraph 2 of the Title III of Decree Law No 3,500 of 1980, with the following exceptions: (a) Special account funds may only be made available once the worker has established that he has ceased to provide services in the undertaking in question whichever is the cause of such termination and will only be embargable in the cases provided for in the second paragraph of Article 56 of the Labour Code, after the contract is terminated. (b) In the event of death of the worker, the funds of the special account shall be paid to the persons and in the manner indicated in the second and third subparagraphs of Article 59 of the Labour Code. The balance, if any, shall increase the mass of assets of the estate. c) The contributions to be made by the employer will have the character of pre-viewing contributions for the purposes of their recovery. In this regard, the rules contained in Article 19 of Decree Law No 3,500 of 1980 shall apply. (d) The said contributions, provided that they do not exceed 8,33% of the monthly remuneration of the taxable person and the profitability obtained from them, shall not constitute income for any tax effect. The withdrawal of these contributions will not be affected by tax. (e) In the event of temporary incapacity of the worker, the employer shall make contributions to the amount of the allowances he receives, and (f) the Pension Fund Administrators may charge a percentage fee, of a uniform nature, on the deposits made in these accounts. Article 8 °.-Workers who are not affected by the pension system of Decree Law No. 3,500 of 1980 shall join a Pension Fund Administrator in the terms provided for in Article 2 of that legal body, for the sole effect of the recovery and administration of the contribution referred to in the preceding article. Article 9 °.-The covenant referred to in Article 6 may also refer to periods of service prior to its date, provided that it does not affect the legal compensation corresponding to the first six years of service, as provided for in Article 6. Article 5 °. In such a case, the employer shall deposit in the special savings account a contribution of not less than 4,11% of the last monthly remuneration of a taxable nature for each month of services considered in the pact. This contribution shall be calculated for up to a maximum of 90 units of promotion and shall be carried out at one time, in conjunction with the contributions corresponding to the remuneration payable in the first month of validity of the pact. One or more pacts may be signed for this purpose, until the whole of the period exceeding the first six years of service is covered. Article 10.-The worker whose contract ends |! |by application of one or more of the established causes |! |in the articles 1 °, 2 ° and 3 °, and that it considers that such |! |application is unjustified, undue or improper, or |! |that has not been invoked no legal causal, you may |! |use the competent court, within the period of |! |sixty working days, counted from the separation, at last |! |that this one so declares. In this case the judge |! |order the payment of the compensation referred to in the |! |article 4 ° and the incisos |! |first or second of the article 5 ° as it corresponds, |! |increased the latter by twenty percent. Without prejudice to the percentage indicated in the paragraph |! |above, which is set as a minimum, if the employer |! |has invoked the causals indicated in the numbers |! | 1, 5 and 6 of the article 2 ° and the dismissal is further |! |declared void The court is plausible, |! |the compensation set out in the first or |! |second of the article 5 °, as it corresponds, may be |! |increased by up to fifty percent. Article 11.-If the contract is terminated by application of the grounds of the first paragraph of Article 3 of this Law, the following rules shall be observed: (a) The communication which the employer directs to the worker in accordance with the fourth paragraph of Article 4 ° of this law, it shall constitute an irrevocable offer of payment of the compensation for years of service and of the replacement of prior notice, if the latter has not been given, provided for in Articles 4, 4 and 5, first or second, according to corresponds. If such compensation is not paid to the worker, the worker may have recourse to the same court referred to in the previous Article, within the same period specified therein, to order and comply with that payment. The fact that the worker is partially or totally paid or inste by him in the manner provided for in the foregoing paragraph, will import the acceptance of the causal, without prejudice to his right to claim the differences that he considers to be owed to him, and b) Yes the worker considers that the application of this causal is inappropriate, and has not accepted it in the manner provided for in the preceding letter, may have recourse to the court referred to in the preceding article, on the same terms and with the same object indicated therein. If the Court rejects the worker's claim, the worker shall be entitled to the compensation referred to in Articles 4 (4), 4 (4) and 5 (5), first or second, as appropriate, with the adjustment referred to in Article 15, without interests. Article 12.-Workers whose contracts terminate pursuant to Article 3 (2), which are entitled to the allowance referred to in the first or second points of Article 5 (2), as appropriate, may for payment and for that of the prior notice, if applicable, within 60 working days from the date of the separation, in the event that such payment has not been made to them in the manner indicated in the second subparagraph of point (a) of the previous article. Article 13.-If the person who incurs the grounds of Article 2 (1), (5) or (7) is the employer, the worker may terminate the contract and make use of the respective court within a period of 60 working days from the date of the termination, in order for it to order the payment of the compensation provided for in Article 4 (4), and in the first or second points of Article 5 (5), as appropriate, increased by 20% in the case of the number of the 7. In the case of the causes of Numbers 1 and 5, the allowance may be increased by up to 50%. percent. If it is established that the causal effect of the employer is that of Article 2 (1), (5) or (6), the compensation of Article 5 ° shall be fixed by the judge of the cause and the maximum amount shall be that referred to in the last paragraph of Article 10. The worker shall give the notices referred to in Article 4 ° in the form and opportunity indicated therein. If the Court rejects the worker's claim, the contract shall be deemed to have terminated the worker's resignation. Article 14.-For the purposes of payment of the compensation referred to in Articles 10, 11, 12 and 13 of this Law, the last monthly remuneration shall comprise any amount which the worker is receiving for the benefit of his/her services at the time of termination of the contract, including the worker's impositions and pension or social security contributions and the royalties or species covered by money, excluding the legal family allowance, payments for time and benefits or allowances to be granted on a sporadic basis or once a year, such as Gratuities and waterings of Christmas. In the case of variable remuneration, the compensation shall be calculated on the basis of the average perceived by the worker in the last three calendar months. However, for the purposes of the compensation provided for in this law, a monthly remuneration of up to 90 units of promotion on the last day of the month preceding the payment shall not be considered, with the basis of calculation being limited to that amount. Article 15.-The indemnities referred to in Articles 10, 11, 12 and 13 of this Law shall be adjusted in accordance with the variation of the Consumer Price Index determined by the National Statistics Institute, between the month prior to that in which the contract was terminated and the one preceding the contract in which the payment is made. From the end of the contract, the compensation thus adjusted shall also bear the maximum interest allowed for readjustable operations. Article 16.-In the case of workers subject to employment, the employer may not terminate the contract but with the prior authorization of the competent judge, who may grant it in the cases of the causes mentioned in the numbers 4 and 5 of the Article 1 and Article 2 of this Act. The judge, as a preliminary ruling and in any state of the judgment, may, exceptionally and in principle, decree the provisional separation of the worker from his duties, with or without the right to pay. If the court is not authorized to terminate the contract of employment, it shall order the immediate reinstatement of the person who has been suspended from his duties. It shall also provide for the full payment of remuneration and benefits, duly adjusted and with the interest referred to in the preceding article, for the period of suspension, if the separation had been decreed without the right to remuneration. The period of separation shall be understood effectively for all legal and contractual purposes. Article 17.-If the parties have provided for the replacement conventional compensation in accordance with the provisions of Articles 6 and 6, the allowances provided for in Articles 10, 11, 12 and 13 of this Act shall be limited to: that part corresponding to the period which has not been the subject of a stipulation. Article 18.-The compensation to be paid in accordance with Article 5, shall be incompatible with any of the (a) compensation which, by way of the term of the contract or years of service, may correspond to the worker, irrespective of his origin, and to which the employer may pay the full or part of the part of the employer who is responsible for the derogation from that laid down in Articles 6 and 6 of this Act. In the event of incompatibility, the worker shall be paid the compensation for which he chooses. Article 19.-The finiquito, the waiver and the mutual agreement shall be recorded in writing. The instrument concerned which is not signed by the person concerned and by the president of the trade union or the delegate of the respective staff or trade union, or which is not ratified by the worker before the inspector of the work, may not be invoked by the employer. For these purposes, they may also act as ministers of faith, a notary public of the locality, the official of the civil registry of the respective commune or section of commune or the corresponding municipal secretary. The provisions of the first subparagraph shall not take place in the case of contracts of a duration not exceeding 30 days, unless they are extended for more than 30 days or the worker shall continue to provide services to the employer. with knowledge of this. The finiquito be ratified by the worker before the inspector of the work or to any of the officials referred to in the second subparagraph, as well as his authorized copies, shall have executive merit in respect of the outstanding obligations which have been entered in the. Article 20-Compensation for the term of office or work contracts established by law, agreed on collective labour contracts or collective agreements supplementing, amending or replacing stipulations of contracts They will not constitute income for any tax effect. Without prejudice to the provisions of the foregoing paragraph, where, for the purposes of termination of work or contract of employment, other allowances shall be paid in addition to those specified, they shall be added to those for the sole purpose of applying the provisions of this Article. Article 17 of the Law on Income Tax on indemnities that are not in the first paragraph of this article. Article 21.-Title V of Book I of the Labour Code, adopted by Law No 18,620, and Article 5 of the Code of Employment. The President of the Republic should be empowered to incorporate the rules of this law into Title V of Book I of the Labour Code within a period of one year. In the exercise of this power, the President of the Republic may recast, coordinate and systematize the provisions of this law, include the legal precepts that have interpreted it, bring together direct and substantially related provisions Among them that they are scattered, to introduce formal changes, be in terms of drafting, titration, location of precepts and others of similar nature, but only to the extent that they are indispensable for the coordination and systematization. It shall also have all the powers necessary for the fulfilment of the objectives set out above, but they shall not, in any event, import any alteration of the true meaning and scope of the legal provisions. in force. Article 22. This law shall enter into force on the first day of the month following its publication in the Official Journal, with the exception of points (a) and (b) of the final paragraph of Article 5, which shall enter into force on 1 January 1991. TRANSITIONAL ARTICLES Article 1.-Workers with a contract of employment in force on the date of entry into force of this law and who have been hired before 14 August 1981 shall be entitled to the compensation which they are entitled to they correspond to it, without the maximum limit referred to in Article 5. If such workers agree to the compensation for any event referred to in Article 6, the latter shall not have the maximum limit shown therein. The rule in the preceding paragraph shall also apply to workers who were previously affected by Law No 6,242 before 14 August 1981 and who continue to provide services to the date of validity of this law. Article 2-Workers with a contract of employment in force on the date of entry into force of this law and who have been hired to count on 14 August 1981, will receive the excess of one hundred and fifty days of remuneration, which by compensation for years of service may correspond to 14 August 1990, in successive monthly instalments, equivalent to 30 days ' compensation each, duly adjusted in accordance with Article 15. For such purposes, the total amount to be paid in such a way and the non-payment of any of the monthly payments shall be recorded in the respective finiquito. Such payment may be made at the relevant Labour Inspectorate. Article 3-For the purposes of calculating the compensation of workers with a contract of employment in force on the date of entry into force of this law and who have been employed before 1 March 1981, the increase or The pension factor established for the remuneration by decree law No. 3,501 of 1980. Article 4 °.-In respect of that part of the compensation for years of service exceeding one hundred and fifty days of remuneration, in the case of the contract workers in force to the date that this law enters into force and that they have been (a) to the extent of the worker's position, in the form indicated to the employer, the employer must include, in respect of the calculation concerned, the amount of the worker's impositions and social security contributions, in the form indicated to the continuation: 1.-In the compensation to be paid in 1990, 25% shall be included; 2. (i) to pay in 1991, 50%; 3.-In which it is appropriate to pay in 1992, seventy-five per cent, and 4.-where it is appropriate to pay from 1993 onwards, the whole of the said impositions shall be included; quotations. Article 5.-The advances on compensation for years of service agreed or paid prior to the validity of this law shall be governed by the rules under whose empire they were agreed or paid. Article 6.-Workers whose contract is terminated by the employer, to be counted on 15 August 1990 and until the law is in force, shall have a period of 30 working days, counted from the latter date, for to claim the payment of compensation for years of service according to the amounts set out in Article 5 of this law, or of the difference, if any. The above shall not apply for compensation which is found in duly subscribed finiquitos, or where it has been ordered to pay in compliance with enforceable judgments. '; And because I have had to approve and sanction it; therefore, promulgate and take effect as the Law of the Republic. Santiago, November 23, 1990.-PATRICIO AYLWIN AZOCAR, President of the Republic.-Rene Cortazar Sanz, Minister of Labor and Social Welfare. What I transcribe to you for your knowledge.-Eduardo Loyola Osorio, Assistant Secretary of Labor.