Coronavirus in Chile ECONOMY

Labor Watchdog: “Employers are Exempt From Paying Their Workers”

SANTIAGO – The Directorate of Labor published rules that apply to the districts under full quarantine. The most contentious rule allows employers to stop paying their workers if they can’t show up. This decision is based on the “Act of God clause” in the Chilean Civil Code, but contradicts a bill the senate passed recently.

Chile’s workplace regulator, the Directorate of Labor, recently issued rules applicable to the seven municipalities of Santiago that have been put under a seven-day quarantine to halt the spread of the coronavirus. One rule mandates that “workers are exempt from attending work and employers are exempt from paying their workers if they don’t show up.”

The watchdog justified this decision with the “Act of God”—or force majeure—clause in the Chilean Civil Code. According to officials, the pandemic counts as force majeure, forcing businesses to stop operations and preventing workers from fulfilling their duties. If workers feel wages are being withheld unduly, they must sue, according to the regulator.

Labor Minister María José Zaldívar said the measure would protect small and medium-sized enterprises (SMEs), which cannot afford to pay salaries during a shutdown. She added that the only way to protect workers is for the senate to pass a bill that ensures employees receive pay from the government’s unemployment fund.

On Friday, Germán Dastres, the president of the national SME confederation praised the decision. He said, “for a great portion of Pymes (small and medium businesses), which I would say are bankrupt, this is a big relief.”

Meanwhile, the president of the Federation of Domestic Workers Unions, María Cotal, criticized the decision, saying, “we are simple workers. We have never abandoned our employers and now it is time for them and for you to not abandon us.

That same day, the senate voted to request the president to nullify the labor regulator’s decision and to demand the resignation of Directorate’s head, Camila Jordán.

The Chilean Health System Cracks Under Pressure

Additional Rules

Other rules mandate that workers who have their hours cut short because of the curfew will only get paid for the hours they worked, even if they have knocked off but have to stay at their workplace due to the curfew. 

Emergency responders, medical personnel, distributors of essential goods, and other workers considered indispensable are exempt from the rules, but their employers must obtain the permits to allow them free movement during the quarantine.

Home-office employees are also exempt and covered under other recently enacted laws.

Contradicting Legislation

The senate’s vice-president, Rabindranath Quinteros, said the rules don’t “coincide with what the top authorities of the government have said.” Senator Felipe Harboe of the Party for Democracy said, “you are going against the idea of protecting workers.”

And just as the regulator’s rules came out, the Senate approved a contrary bill to protect jobs during the quarantine. It rejects the classification of the pandemic as a force majeure. The bill will be retroactive to Mar. 18, the day President Piñera declared a state of catastrophe. It also ensures that workers receive payment from the unemployment fund, meaning that those workers affected by the Directory of Labor’s declaration could still receive some payment. The president must still sign the bill into law.

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