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Get the GuideThe probationary period is not recognized in Chile. Instead, it is common for companies to hire employees on a fixed-term contract for a maximum of 12 months and use that time as the probationary period before turning that contract into a permanent one.
Upon a business transfer, employees are automatically transferred to the new employer along with all their labour and collective rights and agreements (unless both parties agree to the changes in the terms and conditions of employment). Companies are not required to inform nor consult with employees prior to a business sale.
Employees cannot be dismissed simply because a business transfer occurred; however, if the employee’s position is eliminated or is subject to relevant change, then the termination is acceptable. The dismissal must be justified and comply with the requirements of articles 161 and 162 of the Labour Code, which regulates dismissal for “business necessity”. Dismissal cannot be arbitrary.
The Chilean courts recognize non-competition and non-solicitation clauses if they meet the following criteria, although they are not a statutory right:
Companies are required to set two different work councils, depending on the number of employees in the company.
More than 25 employees – health and safety committee, which oversees, adopts, and proposes healthy and safety prevention measures to the company.
More than 15 employees – bi-partite training committee, which agrees and evaluates the company’s training programmes for the company.
Both work councils are constituted jointly by representatives of the employer and the employees, who are directly chosen by the company and the employees.
Companies with more than 100 employees must also establish a risk prevention department, which is directed by a risk prevention expert.
Companies with more than 25 employees must respect a ratio of Chilean citizens to foreign employees in the company. At least 85% of the employees must be Chilean citizens. The following are considered Chileans for the purpose of this requirement:
Specialized technical personnel — any worker who renders services that are the result of the application of knowledge or technique that requires a significant level of specialization or study — are excluded from this ratio. In addition, Article 20 also requires that the technical specialist personnel cannot be replaced by the national personnel.
Companies with more than ten employees must draw up an Internal Rule of Order, Hygiene, and Safety. The employer may establish the rules according to its needs but must cover the following:
Any other subjects on regulations deemed necessary by the employer to guarantee a safe working environment may be included in the Internal Rules Code. Issues related to employee’s health and safety, regarding the employer obligation to inform of possible hazards, must be covered according to the nature of each activity such as proper use and care of personnel protective equipment, rules and instructions for using tools and working items, measures to avoid occupational disease and accidents, prohibitions (e.g., operating machinery or equipment without authorization), etc.
In terms of implementation, the Internal Rules Code must be published for 30 days in two places on company premises so as to give employees the opportunity to read it and make comments. After that, a copy of the Internal Rules Code must be sent to the Health Minister and Labour Authority within five days from the date on which it has entered into force.
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