CHILE LAW AND PRACTICE Contributed by: Fernando Lathrop Aubert, Francisco Cárcamo Valdés, Jimena Illanes Diez, Joyce Jankelevich Mayer, Macarena Jaramillo Solís, Michelle Niedbalski Ramírez, Nicolás Maldonado Leyton and María Fernanda Heusser Errázuriz, Lathrop Mujica Herrera & Diez Abogado
ing employers to deduct amounts from salaries for social security contributions. Employers must also make additional contributions to fund benefits like health, disability, old age and death. • Benefits upon termination – Termination of an employment contract is strictly regulated and can only occur for legally recognised causes. If a cause is unjustified, the employer may face penalties, including indemnities with a surcharge of 30% to 100%. Main compensation includes: (a) substitute compensation for prior notice – if the employer fails to provide 30 days’ notice, they must compensate the employee with one month’s salary; (b) compensation for years of service – employees with over one year of service are entitled to one month’s salary per year worked, up to 11 months, with a cap of approximately USD3,700 per month to be compensated; and (c) compensation for unused statutory leave – em - ployers must compensate employees for any unused annual leave days in monetary terms. • Benefits during retirement – Retirement benefits are not the employer’s responsibility, as Chile’s pen - sion system is based on individual contributions. Employees make mandatory contributions from their salaries to individual accounts managed by pension fund administrators (AFP). These accounts fund retirement pensions when employees reach the legal retirement age (65 for men and 60 for women). Retiring at this age is not mandatory, and employees can continue working if they wish. 10.3 Employment Protection As a general rule, Chilean legislation does not estab - lish significant restrictions on the modification of a company’s corporate composition or ownership, respecting the principles of market freedom and the constitutional guarantees that protect property rights, as well as the right to engage in any economic activity not prohibited by law. However, the recognition and protection of this entrepreneurial freedom also confers safeguards for workers. In this regard, labour legislation expressly provides that modifications, whether total or partial, concerning the ownership, possession or mere hold - ing of a company, will not alter the rights and obliga -
tions of workers derived from their individual employ - ment contracts or collective bargaining agreements, which will remain valid and in effect with the new employer(s). Consequently, it is recommended that, during pre - liminary negotiations to acquire or invest in a Chilean company, a detailed evaluation be conducted of the costs associated with the existing individual and col - lective labour contracts. This is because the contents of these contracts must be fully respected, and their enforceability cannot be disregarded merely due to a change in the company’s ownership. Nonetheless, this does not preclude the possibility of negotiating with workers or their trade unions to modify or adjust the terms of the contracts. 11. Intellectual Property and Data Protection 11.1 Intellectual Property Considerations for Approval of FDI Intellectual property (IP) is an important aspect in screening FDI in Chile. The regulatory framework for industrial property rights is established by Law 20,254 of 2008 and international treaties signed by Chile. The main institutions responsible for IP matters are the Industrial Property Institute (INAPI) and the Intellec - tual Rights Department of the Libraries, Archives and Museums Directorate (DIBAM). The process of review and the criteria will depend on the type of IP. The different processes can be sum - marised as follows. Trade Mark Registration Trade mark protection is territorial, meaning it only applies at the national level, and it is temporary, lasting ten years but renewable indefinitely for equal periods upon payment of the applicable fee. The registration process for a trade mark, designation of origin, or geographical indication involves the following stages. • Submission of the application – Submitted in per - son or online through INAPI. • Formal examination – INAPI reviews the application for completeness and compliance with regulations:
124 CHAMBERS.COM
Powered by FlippingBook