CHILE Law and Practice Contributed by: Constanza Contreras, Gabriela Muñoz and Juan Francisco Reyes, SCR Abogados
their members in collective bargaining processes and provide support in matters related to: • labour and safety law compliance; • mutual assistance and welfare; • occupational health and safety; • professional development; and • recreational initiatives. 6.3 Collective Bargaining Agreements Under Chilean law, collective bargaining is defined as the process through which one or more employers engage in negotiations with one or more unions with the objective of establishing uniform terms and condi - tions of employment and remuneration for a defined period. Such bargaining may take place at either the single-employer or multi-employer level. In the latter case, employers must grant their express prior con - sent to participate. Collective bargaining may address all matters related to wages and other forms of remuneration, whether monetary or in-kind, as well as general working con - ditions. However, it may not extend to matters that would restrict the employer’s managerial prerogatives or matters unrelated to the employer(s) involved in the negotiation. Two types of collective bargaining are recognised. • Regulated collective bargaining, which is subject to detailed statutory procedures and confers specific rights and obligations upon the parties. • Unregulated collective bargaining, which is carried out voluntarily by the parties without the proce - dural framework or statutory protections afforded to regulated bargaining. Importantly, industrial action (eg, strikes) is not permitted in the context of unregulated bargaining. At the single-employer level, any duly constituted union at the company or establishment level may initiate a regulated collective bargaining process by submitting a proposed draft of a collective contract. In such cases, the employer is legally required to enter into negotiations.
The regulated bargaining process is governed by statutory timelines. Generally, negotiations must conclude within 45 days from the submission of the draft collective contract or from the expiration of a prior agreement. If no agreement is reached by the deadline, employees are typically required to vote on whether to accept the employer’s final proposal or to proceed with a lawful strike. The Labour Bureau must be kept informed throughout the process. Multi-employer collective bargaining follows a similar procedural framework, although, in contrast to single- employer bargaining, participation by employers is entirely voluntary and cannot be compelled. During the course of regulated bargaining, either party may request mediation services or voluntarily submit the dispute to arbitration. If arbitration is agreed upon or mandated (as in the case of prohibited industrial action), the resulting arbitral award has the same legal effect as a collective contract. Arbitration is compul - sory in enterprises where strikes are legally prohibited and employees have been ordered to resume work by government authorities. Employees actively engaged in regulated collective bargaining are afforded special protection against dismissal. Generally, they may only be terminated for serious misconduct or material breach of contract, and only with prior judicial authorisation. As previously noted, parties may freely engage in unregulated collective bargaining outside the statu - tory framework. No procedural rules or protections apply in this context – employees involved are not afforded dismissal protections, and lawful strike is not permitted. The outcome of such bargaining is referred to as a collective agreement, as opposed to a collec - tive contract, which arises from regulated bargaining. Collective contracts and arbitration awards must have a minimum duration of two years and may not exceed three years. Collective agreements may have a dura - tion of up to three years. The provisions of collective contracts, collective agreements or arbitration awards automatically become binding terms of the individual employment
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