Chile: Labor Legislation to Boost Union Rights, Female Employment

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By Tom Azzopardi

Nov. 17—Legislation will be sent to the Chilean Congress by the end of the year to boost union rights and encourage female participation in the labor market, Labor Minister Javiera Blanco promised at a seminar at the Adolfo Ibanez University in Santiago on Oct. 29. The minister highlighted the need to give excluded groups better access to the labor market in order to reduce the country's gaping social breaches.

“Differentiated access to employment reproduces inequality in Chile,” Blanco noted.

‘A Tremendous Lack of Knowledge'

Rather than advancing gender equality, Chile has been losing ground in recent years. In the latest (2012) World Economic Forum gender equality index, for example, Chile fell to 87th place from its former rank of 46th.

The government's budget for 2015 will extend existing subsidies for female workers, established in 2012, from the current 40 percent for the lowest-income families to 60 percent, and the government will put more effort into educating employers, unions and workers about available subsidies.

“The paradox is that these instruments are available today, but we still find a tremendous lack of knowledge on this issue,” the minister said.

The government also plans to repeal Article 203 of the Labor Code, which requires companies with more than 20 female workers to provide day care services for employees' children, because rather than encouraging female employment, the measure has had the unwanted effect of leading employers to avoid hiring additional women when the number of female staff approaches 20.

The government will also pursue an affirmative action policy to encourage female employment in the senior civil service, which could then be mirrored in the upper echelons of private business.

“We want this policy to serve as a model for the private sector,” Blanco said.

To ensure new and existing labor regulations are properly enforced, the government has decided to strengthen labor authority Direccion del Trabajo with the addition of one hundred inspectors by 2016.

The Heart of the Agenda

The heart of the government's labor agenda remains an effort to strengthen collective rights. Proposed changes aim to balance union demands for a stronger hand in collective negotiations and the need for productivity with equity and social peace. The minister noted that employers want agreements that can adapt to the changing economic cycle and better balance the needs of work and home life.

By boosting union power, the government hopes to reduce rather increase strife in the workplace, the minister said, pointing to the situation in other countries.

“The experience in countries with broad coverage of collective negotiation and highly representative unions indicates that within this framework, productivity and governability are strengthened and conditions permit a more equitable distribution,” Blanco said.

A key change will be recognizing unions as the rightful counterpart in collective negotiations with employers. This does not mean that a single union will have the right to negotiate with the employer, however, “as there can be many unions within one company,” Blanco said. “The right to negotiate is going to belong to each of these unions when it is their turn to negotiate.”

The legislation will also extend the scope of collective negotiations to additional issues, such as working hours.

In order to reduce asymmetry in labor relations, the government will also seek to strengthen unions by providing greater training. Government funding for union training will be increased to 150 million pesos (U.S. $252,000) beginning next year with an emphasis on increasing unionization of female workers.

“This will allow us to generate less conflict and less tension than is the case when remuneration is the only issue up for debate,” Blanco said.

‘Fundamental' Issues Not Addressed?

The minister's proposals have not completely satisfied union leaders who had expected the promised overhaul of the labor laws to go further.

Barbara Figueroa, president of the union organization CUT-Chile, said Nov. 4 that the minister's proposal did not address “fundamental” issues such as union recognition, intercompany negotiations, arbitrary dismissal and unionization.

“Recognition is only effective if the union is the only one that can share the negotiated benefits without any possibility that the employer can arbitrarily extend the benefits to workers on an individual basis,” Figueroa said in a press conference at CUT's Santiago headquarters.

To contact the reporter on this story: Tom Azzopardi in Santiago at correspondents@bna.com

To contact the editor responsible for this story: Rick Vollmar at rvollmar@bna.com

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