Chile Forum

By a discussion in this related thread here viewtopic.php?f=18&t=3846, we thought we would provide a simple template example of a basic work contract in Chile for members to understand what they should get when hiring a person on a contract bases (e.g the guy to fix your fence, or a guy painting your house).

First, all the legal warnings and disclaimers are required. You are completely on your own using this contract template, and if you have any doubts about its meaning or use we strongly urge you to seek the advice of a Chilean attorney.

This contract is provided as is, as an example only, and in no way constitutes a legally binding contract under Chilean law or an obligation by Spencer Global or any of its staff or employees to provide related legal services regarding its use, endorsement, or any sort of warranty regarding its suitability for any particular legal purpose. Spencer Global will not be responsible for damages directly or indirectly arising out of its use or use as part of any derivative work based on it. This contract is covered by both U.S. and Chilean copyright law and is for personal use only. Transfers, copies, sales, and publication on the internet or anywhere else to third-parties is strictly forbidden as a whole or in part.

The most important advice about using a contract such as this is use your common sense.

If your Spanish is sufficiently limited that you are not certain what it says, find an English speaking attorney to help you. We kind of purposely left things in Spanish as a bit of a built in safeguard or test. If you can not fill in the blanks with the proper information or even recognize where the blanks are located, then you definitely need to get help before using a contract like this by yourself.

That contract for the most part would likly be sufficient for simple things. Think of it as at least a step up from just a hand shake when hiring someone to do something for you. It will likly work in the most basic situations such as hiring someone to fix your fence, or hiring someone to paint your house. Before using it, ask yourself just how much is at stake if things went badly. Don't go trying to use it to do things like build an entire house.

When you use a contract like that for hiring someone, make sure you get them to issue you a bolleta for tax purposes from them as a contract worker. That along with a contract like this are your 'get out of labor relations board' hell cards, if someone should ever come back and try and claim that you in fact hired them as a full employee. It may not cover you however in many cases if the person can prove you did things like provided the tools, set the hours, had direct supervision and control over their work. What it does do however is change the burden of proof in a labor dispute from you to them. They have to prove they were an employee. Without such a contract, the labor law in Chile assumes that what the employee claims is true and you have to prove that they did not work as an employee if you did not have such a contract. With a contract like this, you take the whole dispute out of the hands of the labor relations boards responsibility and in to a civil contract dispute.

So for example, I would not use such a contract in relation to hiring your housekeeper in most cases.

The most likly thing that contract will do is just stop any after the fact silliness of people coming back and asking for more money or whatever, and as a refresher for short memories among workers. It will formalize your agreement a bit more.

Also be aware, that there are limitations in Chilean law to just how much money and what sorts of goods and services a contract can involve without being notarized. When in doubt, spend a few of your quid/pesos/dollars and get all contracts notarized and archived as a public record. It will also stop after the fact situations of people claiming that is not their signature, or they had never seen that document before.

My wife tells me she heard that Piñera was in favor of reforming laws that let contractors sue someone under the claim they (the contractor) were de facto employees. Until and if that happens, from personal experience the above - not just the contract language, but the framework that the admin provided around it - is well worth paying attention to, especially for people coming from common law countries where they might expect contracts to more likely be the final word in a dispute.

Well, I believe for the most part they can already. The difference is,is there a labor board and bunch of administrative type labor laws inserted between the parties and the courts.

One labor attorney we spoke to basically said that he never understood why companies even bother trying to challenge the labor board, they always loose. When the left was in power, they were siding on the workers side almost exclusively. I suspect the right is going to even that out a bit more, and I honestly believe it is needed. It is kicking the economy while it is down, and likly keeping the employment rate higher than it would be.

The OECD report also recommends the reform of the labor laws in regards to severance pay, because it encourages companies to hire part time and short time workers rather than full-time steady employees and limits worker mobility once they are hired.

The irony of Chile's labor market is that some of the most vulnerable workers are professionals. They are doctors, lawyers, and others that although relatively speaking are payed better they are also payed as contractors no matter how much they act like an employees and lack the labor law protections in most cases as contractors.

I know this has been a real eye-opener to more than a few gringos teaching English in Chile that have tried to game the labor laws to get even with their employers after the fact. English teachers are almost exclusively dealt with as contract labor.

Thanks for this. It has taken us nearly three years to finally realise that although my word is my honour, that is not necessarily the norm.

Takes a much longer time to unlearn things than to learn new things from scratch!

Another thing I seen in the OECD report, but they did not draw any conclusions about directly was maternity leave. If you hire a woman, and she announces she is pregnant, you are on the hook for the maternity leave no matter how much she has worked. Well, the OECD explicitly brought up the issue of severance pay issues in general, but skipped drawing a line between the maternity leave costs in relation to the participation of women in the work force.

Our entire office is full of women. I don't really care that I might have to pay for maternity leave for any of them, because our girls are just all around productive and worth it. As far as we are concerned they more than earn that right. However, I could definitely see many other companies in Chile being hesitant to hire women or even pay women more money, because of the potential cost in corresponding maternity leave. I think women should get maternity leave, just not at the expense of other women (or them) being able to find a job or earn more money. That labor law needs some tweaking, I am not sure how.

The current state of the law and how it's applied by labor courts is obviously a disincentive to hiring and contributes to the high unemployment rate.

Another ploy used multiple times on my pareja is to setup a situation to intentionally anger the worker so he/she quits or is let go because of some accusation (later proven wrong) before being vested for vacation time pay (one year). Then a week or two later, they call the worker back and ask him/her to return. This works out well for a business, especially when the worker is in the job market age discrimination range (late 30s on).

xxx

el Puelche bebe demasiado cerveza po!

I remember in Guatemala one time the politicians got really stupid, and passed a law that employees all had to be paid a bonus based on the number of years they worked at a place equal to one months pay for each year they worked. A friend of mine that had like 50 employees in a store was forced to just fire everyone and hire them back the day before the law went in to effect. He simply told everyone, if you want to keep your job this is what has to happen, and sign this waver if you want your job back. Either that or he would have had to close the store, and everyone would have been unemployed. I think almost the entire country got fired and hired back at the same time to avoid the law.

There is a similar Micky Mouse law on the books in Chile that gives workers a right to a percentage of the profits of the companies, but I am not aware of any company that pays it (sort of) because there are so many exceptions to what companies qualify, loopholes, whatever that by the time it is divided among the workers it is fairly meaningless. Many companies just include it as a fixed portion of the wages.

If I gave my employees bonuses based on it, my girls would quit on me.

Are there any sample templates available for Work Visa Subject to Contract?

Max