CHILE Law and Practice Contributed by: Constanza Contreras, Gabriela Muñoz and Juan Francisco Reyes, SCR Abogados
fixed-term or task-specific contracts. For contracts concluded for specific tasks or services, severance upon completion is calculated at a rate of 1 to 2.5 days of remuneration per month worked (or per frac - tion exceeding 15 days), depending on the effective start date of the agreement. Employees may resign voluntarily at any time, pro - vided they give the employer at least 30 days’ prior written notice. In cases of serious breach of contract by the employer, the employee may unilaterally termi - nate the employment contract without prior notice and seek judicial redress for what is known as “construc - tive dismissal” (or indirect termination). With regard to retirement, the statutory age for claim - ing a retirement pension is 65 years for men and 60 years for women. Employees are not legally required to retire upon reaching this age and may continue working while deferring or receiving their pension. Employers are not permitted to terminate an employ - ment contract solely on the basis of the employee reaching retirement age, as doing so may consti - tute unlawful age-based discrimination. Further, the employee may claim retirement pension and continue working, as retirement is not a legal cause for termi - nation. In all termination scenarios, regardless of the reason, the employer is legally obligated to pay any outstand - ing or proportionally accrued vacation days. There are no specific legal provisions governing col - lective dismissals. These cases are subject to the gen - eral rules applicable to individual terminations. 7.2 Notice Periods Where an employer terminates the employment con - tract on the grounds of business needs (primarily redundancy) or under the at-will termination mecha - nism applicable to managerial or similar personnel (without cause), it is legally obligated to either: • provide the employee with at least 30 calendar days’ prior written notice; or • pay the employee an amount equivalent to thirty days’ remuneration in lieu of notice.
In both scenarios, employees with one year or more of continuous service are also entitled to the statutory severance payment for years of service. Payment in lieu of prior notice and per years of service is also mandatory in case of termination due to the employ - er’s bankruptcy. For all other forms of employer-initiated termination, no advance notice period is required. However, the employer must still provide written notice of termi - nation specifying the applicable legal ground and its justification. When an employee resigns voluntarily, a minimum of 30 calendar days’ written notice must be given to the employer. Nevertheless, in cases involving serious contractual breaches by the employer, the employee may terminate the contract immediately and initiate legal proceedings seeking compensation. This is known as constructive dismissal ( despido indirecto ). Irrespective of the cause of termination, the employ - er is required to deliver a termination letter to the employee that clearly: • sets out the statutory grounds relied upon and the justification; • states the amount of severance compensation, if applicable; • certifies the status of all social security contribu - tions made during the employment relationship, accompanied by proof of payments; and • indicates whether the release and settlement agreement ( finiquito ) will be executed electronically or in person, and notifies the employee of their right to reserve claims upon signing. This letter must be delivered personally to the employ - ee or sent via registered mail within the statutory deadlines – ranging from the same day to three or six days, depending on the legal ground for dismissal. A copy must also be submitted to the Labour Bureau. The settlement or release agreement and correspond - ing payments due upon termination must be made available to the employee within ten calendar days from the effective termination date. The settlement or release agreement must be executed and ratified
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