Change of Supreme Court doctrine regarding limitation periods in employment actions

Statute of limitation regulations are necessary and widespread. When a limitation starts must be determined by the specific circumstances allowed by law.

Employment regulations in Chile provide two limitation periods for employment actions: six months and two years. However, there are two different interpretations for when the different limitation periods apply and how they should be calculated.

Under the so-called 'moment doctrine' (the most commonly accepted interpretation), the essential determination relies on whether an employment relationship is still in effect or has already been terminated. When an employment relationship is in effect, the statute of limitation is two years, while when employment has been terminated, the filing deadline is six months.

The Supreme Court recently decided a relevant variation on this understanding (Case 10720-2018), the so-called 'content doctrine'. This doctrine stresses the nature of relief sought by plaintiffs – if a plaintiff seeks the protection of a minimum public policy standard (eg, employment status, remunerations and holiday), the limitation period is two years and must be calculated as of the termination date of employment. In contrast, if a lawsuit refers to other rights that are not considered minimum public policy standards, the limitation period is six months.

This doctrine presents two problems. The first is that the distinction between the two standards is somewhat murky, as all terms and conditions of employment are eventually connected to a minimum standard in the Employment Code, which places detailed conditions on various employment rights.

The second problem is that the content doctrine implicitly extends limitation periods, as it calculates up until the date of termination of employment and not from the date on which any wrongdoing was committed.

It is yet to be seen in practice what impact this extension of the limitation period will have on litigation.

For further information on this topic please contact Ignacio Garcia or Fernando Villalobos at Porzio Rios Garcia by telephone (+56 22 729 0600) or email (igarcia@porzio.cl or fvillalobos@porzio.cl). The Porzio Rios Garcia website can be accessed at www.porzio.cl.