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Labour Relationships and the Execution of Employment Contracts - International Law Office

International Law Office

Employment & Benefits - Chile

Labour Relationships and the Execution of Employment Contracts

May 26 2004


The Chilean Labour Code assumes the existence of an employment contract whenever an individual provides his or her services to a company in exchange for remuneration. Specifically, the code defines an 'employment contract' as "an agreement in which the employer and employee reciprocally covenant for the employee to render services and for the employer to pay a certain remuneration for such services".

In cases involving agreements whereby an individual renders (and issues invoices for) services requested by the company, the individual may claim before the labour courts or the governmental labour authorities that he or she is in fact a company employee who is entitled to all the corresponding benefits.

An employment contract may exist without an actual written document and can be agreed orally. However, once agreed, the parties should execute a written contract within 15 days of the employee's start date. Should the employee refuse to sign, the employer may ask the governmental labour authority to demand execution of the contract. If the employee persists in his or her refusal to sign, the employment agreement may be terminated without severance pay. Where the employer does not require the employee to execute the written contract, the Labour Code sets forth a rebuttable presumption that the terms and conditions of the employment contract shall be those agreed by the employee.

At the very least, an employment contract must include details of:

  • the place and date of execution;
  • the parties to the contract, including their nationality, dates of birth and the date on which the employee started work;
  • the nature of the services and the place where they shall be provided;
  • the amount, type and payment schedule of the agreed remuneration;
  • standard hours of work (the company can set its own hours for shift work);
  • the term of the contract; and
  • any additional benefits given by the employer.

The contract may also include any other terms reached by the parties, as long as these do not imply a waiver by the employee of the standard legal rights granted by the Chilean Labour Code.

Finally, notwithstanding the terms of the employment contract, it is a well-settled principle that the rights and privileges regularly conferred by employers to employees shall be deemed to be part of the contract, and that such rights may not be unilaterally altered or removed by the employer without the employee's consent.


For further information on this topic please contact Cristián Eyzaguirre or Ismael Ureta at Claro Y Cía by telephone (+562 367 3042) or by fax (+562 367 3003) or by email (ceyzaguirre@claro.cl or iureta@claro.cl).



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