Chile: Constitutional Court Blocks Key Changes to Labor Law

Bloomberg Law for HR Professionals is a complete, one-stop resource, continuously updated, providing HR professionals with fast answers to a wide range of domestic and international human resources...

By Tom Azzopardi

May 3—The Chilean government is studying means to implement its strongly pro-union overhaul of the labor code after the Constitutional Court blocked parts of the legislation as unconstitutional.

“We will wait to hear the full ruling, but do not doubt that we shall seek all the means that the law permits to secure a fairer relationship between business and labor than that we have today,” President Michelle Bachelet said on April 28.

In an April 27 statement, the Constitutional Court announced its six-to-four decision rejecting as unconstitutional clauses of the labor reform bill (9835-13) that would grant an exclusive right to legally constituted unions to hold collective negotiations.

The judges also partly rejected as unconstitutional giving unions the right to decide whether benefits gained through collective negotiations should be extended to nonunion members.

Earlier this month, President Bachelet announced the launch of a consultative process to gather suggestions for a new constitution to replace the one promulgated during the military government of General Augusto Pinochet.

Opposition Challenge Partly Accepted

The judges rejected challenges brought against the right of unions to access company pay sheets, however, and the obligation of employers to negotiate with intercompany unions.

The constitutional challenges were brought by opposition politicians after Congress approved the controversial bill on April 6 after 15 months of tough debate between the government and the legislature.

Lawyers told Bloomberg BNA this month that they expect the bill’s provisions on union exclusivity and the extension of benefits to spark a massive increase in union membership since this would be the only means for workers to access improved pay and conditions.

The bill also severely limits businesses's ability to withstand strikes by banning replacement labor, whether internal employees or temporary staff.

Speaking immediately after the court announcement April 27, Labor Minister Ximena Rincon described the ruling as “a defeat for Chile’s unionized workers,” noting that union exclusivity and the extension of benefits represented “fundamental aspects” of the bill.

Unions Launch Protests

“This clearly opens the door to social mobilization,” said Arturo Martinez, secretary-general of the Central Unitaria de Trabajadores union movement, in a press conference on April 28. “There’s no other way because the dialog has run out and was no use.”

Union leaders in fact organized protests in Santiago and most other major cities May 1 to express their opposition to the Constitutional Court's decision, and CUT announced a national strike for May 31 to express discontent over the ruling and to pressure the government to implement the legislation.

“We are going to say clearly that the changes are here to stay in Chile and we are not going to let the sovereignty of thousands in this country bend to that of a minority,” CUT president Barbara Figueroa said.

For its part, the government is planning to use a presidential veto to modify the law when the ruling is published, Rincon said April 29. The minister told local press that depending on the arguments used by the judges in the ruling, which is expected to be published by May 8, the veto could annul or replace the affected clauses or add new clauses to the legislation to comply with the court’s objections.

To contact the reporter on this story: Tom Azzopardi in Santiago at

To contact the editor responsible for this story: Rick Vollmar at

For More Information

For more information on Chilean HR law and regulation, see the Chile primer.

Request Bloomberg Law for HR Professionals