Accounting, Labour Tagged

Chile Labour Law – Mandatory Leave

The most common risk to companies operating in Latin America is related to employment laws and obligations.  Over the last 10 years, we have worked with companies of all sizes but even the most sophisticated tend to have issues at some point with Chilean labour laws.

As part of our blogs series on labour considerations, we previously posted on the following topics –

This week we will provide information on the mandatory leave that employees are entitled to as per Chilean Labour Laws. 

Annual Leave (Vacation)

Employees with more than one year of service are entitled to 15 working days’ holiday a year on full pay. 

Holidays are given preferably in spring or summer and, taking into account the needs of the company, must be taken in one block. However, periods of more than ten working days can be split up by mutual agreement. Holidays may not be exchanged for money. 

All leave that has not be taken within the corresponding year passes on to the next, the employer cannot impose the loss of leave if not taken, nor exchange it for money. 

Sick Leave

a) Employees are entitled to paid leave: In the case of illness or an accident for the time indicated in a certificate issued by a doctor. These payments are made by the social security/health institutions), not the employer.

 b) Child Health Leave (under 1 year old): When the health of a child under one year of age requires home care because of illness, a fact that must be proven with medical certificate issued or ratified by the professional that is responsible for the care of the child, a working mother has the right to permission for the period determined by the respective professional indicated in the medical license. If both parents are working, any of them at the mother’s choice, can take the leave.

c) Child Health Leave (Parents with an under 18-year-old child): Children affected by a terminal illness in its final phase, or seriously ill with probable risk of death. The working mother is entitled to leave for the number of hours equivalent to 10 ordinary working days per year, distributed at her choice in full, partial, or combined days, which are considered as worked days for all legal effects. To exercise the right, the worker must prove the circumstance by means of a medical certificate issued by the doctor who oversees the child’s care. It should be noted that if both parents are dependent workers, any of them, at the choice of the mother, can enjoy the leave in question. 

Maternity Leave

Pregnant women are entitled to six weeks of paid leave before the estimated birth date and twelve weeks of paid leave after such event. Afterwards there is a parental leave that can be taken by the mother or father for 3 additional months. The payment is made by ISAPRE (health insurance) and the government. 

a) Maternity Leave: In accordance with the provisions of Article 195 of the Labour Code, the employee is entitled to a maternity leave of six weeks before birth and twelve weeks after the birth of the child. The worker cannot waive this right; it is also forbidden during such periods, for the pregnant women and new mothers to work. To be entitled to maternity leave, either prenatal or postnatal, the worker must submit the corresponding medical certificate. Payment of her salary will be replaced by a subsidy payment made by the workers health institution.

b) Paternity Leave: The father is entitled to a paid leave of five days after the birth of a child. The father can opt to use the days immediately as of the time of birth; in such case the 5 days must be consecutive, or be distributed within the first month from the date of birth. This permission is also granted to the parent who is in the process of adoption, and is counted from the notification of the decision granting or accepting personal care of the adopted child, in accordance with Articles 19 and 24 of Law No.° 19,620.

c) Post-Natal Parental Permission: According to the provisions of Article 197 bis of the Labour Code, female employees are entitled to a postnatal parental leave of an additional twelve weeks after the end of the postnatal period indicated above, during which they are entitled to receive subsidy pay, the basis for calculation shall be the same as the maternity leave allowance.

However, the employee may choose to return to work once postnatal leave is completed, on a half-day basis, in which case the postnatal parental leave is extended to eighteen weeks. In this case, the worker will receive only fifty per cent of the subsidy payment she would have received under the foregoing paragraph, and at least fifty per cent of the fixed salary set out in her employment contract, without prejudice to any other variable remuneration she is entitled to.  Now, as set out in Article 197 bis of the Labour Code, if both parents are working, either, at the choice of the mother, the father may enjoy the postnatal parental permission, from the seventh week thereof, for the number of weeks that remain. The weeks used by the parent must be located in the final period of the leave and shall entitle the subsidy payment established in the same rule, calculated on the basis of their remuneration. 

Bereavement Leave 

a)  Stillborn or Parent: the worker is entitled to a paid leave of three working days, in addition to the annual holiday, irrespective of the length of service the worker has with the employer. This leave must be taken as from the respective death and cannot be compensated in money.

b)  Children or Spouse: the employee is entitled to a paid leave of seven consecutive days, in addition to annual holiday, irrespective of the length of service the worker has with the employer. This leave must be taken as from the respective death and cannot be compensated in money.

Other Types of Leave

Leave Without Pay: Chilean labour legislation does not regulate unpaid leave granted by the employer to a worker. Notwithstanding the foregoing, the case law of the Labour Office has established that leave without pay is legally a conventional suspension of the employment relationship and a partial suspension of certain effects of the contract during a period of time, which does not affect the validity of the same since it only interrupts some of its effects, that is, some of the rights and obligations it creates for the parties. So, the worker is not obligated to perform the tasks agreed upon in the contract or the employer is obligated to provide work or pay for it. The period during which an employee uses a leave without pay must be considered in the compensation for years of service, because the labour contract remain always in force. 

Specific Health Exam Permission: Workers over the age of forty, whose employment contract is for more than thirty days, are entitled to half day off, once a year during the term of employment, to undergo either a mammography or prostate exam, and other preventive health exams, such as pap smears and any other that public or private health institutions consider appropriate.

Marriage Leave: Every worker who marries is entitled to a paid leave of five continuous working days in addition to annual holidays. This leave can be used as desired by the worker, immediately preceding the wedding or following the day of its conclusion. To avail the benefit the worker must give notice to the employer thirty days in advance and provide a marriage certificate, within thirty days of celebration, from the Civil Registry and Identification.

Child Care: Pursuant to article 203 of the Labor Code, an employer who employs 20 or more woman workers of any age or marital status has the obligation to have a room attached to the establishment where working women can provide food for their children. This right can only be used by woman workers who have two-year-old children (or of less age) and leave them there while they work. The employer may also fulfill this obligation by constructing or enabling and maintaining common services of nursery/childcare with other establishments in the same geographical area, or by directly paying the expenses of nursery/childcare to the establishment that it designates. 

Ax Legal helps foreign companies to enter and operate in the Latin America. Our team of legal and commercial advisors have a distinguished track record of helping foreign technology and services companies at each stage of their growth. Over the years, we have worked with starts up, mid-size businesses, and publicly listed companies. The one common factor that connects are clients is that they are leaders in their field, providing innovative technologies and services to the industrial sectors.

To better understand how we can support you in the Region, please contact Cody Mcfarlane at cmm@ax.legal