The Labour Reform Law 20,940, which was introduced in April 2017, focuses on reforming union rights. A centrepiece of the reform is the removal of an employer's right to replace personnel who go on strike with other workers. This amendment means that Chile is one of the only countries within the Organisation for Economic Cooperation and Development to remove this rule.
Labour Reform Law 20,940 primarily concerns collective bargaining and the power of unions. A key issue introduced by the law was the elimination of employers' right to hire replacement workers during labour strikes. This restriction will have a paralysing effect on companies, as unions have seen their negotiating position strengthened. Further, there is no clear penalty for illegal strikes. These changes could damage the culture of dialogue in the context of industrial disputes.
New legislation recently established a schedule for adjusting the value of minimum wage and family allowance rates every six months from 2016 to 2018. The changes will affect the general minimum wage, the minimum wage for employees over 65 or under 18, the minimum wage rate for non-remuneration purposes and the family allowance granted to eligible employees.
The Constitutional Court recently published its decision on a constitutional complaint filed by a group of Congress members regarding the Labour Reform Bill. The court ruled that two of the bill's core provisions (union entitlement and the extension of benefits of collective bargaining agreements) were unconstitutional because they violated the constitutional provisions on freedom of association, among other things.
The Labour Code provides that companies with 20 or more female employees must have daycare facilities in the workplace, which must be separate from the work area. This benefit is extended to male and female employees that, by court order, have obtained custody of a child. A recent ruling found that the rule also applies to employees who have obtained temporary custody of a child under a court order.