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Original article: «No queda otra que profundizar la organización»: Confederación General de Trabajadores rechazó políticas laborales anunciadas por Gobierno de Kast

Public Statement from the National Executive of the General Confederation of Workers of Chile (CGT)

The government quickly revealed its intentions regarding labor conditions. Recently, they announced a proposal for a severance package that claims to enhance workers’ rights, initiating a familiar campaign filled with misleading assertions that their plan is superior to the existing one, which is simply not true.

Unfortunately, workers will likely realize too late the harmful implications of the sweetly wrapped poison they are being offered.

Furthermore, signals have emerged indicating an intention to reduce the impact of the 40-hour workweek law by exploiting the loopholes left by the previous administration, particularly concerning the flexibility of this regulation.

Lastly, it seems that the proposed contributions for universal daycare from employers will be deducted from the employers’ contributions to unemployment insurance, which equates to robbing Peter to pay Paul.

Simultaneously, they have indicated intentions to enforce rules affecting workers in the gastronomic, hotel, and tourism sectors, aimed at altering the operational framework and, among other things, implementing hourly contracts and seasonal regulations, which will undoubtedly result in job losses.

Clearly, we are witnessing the actions of a government that favors business interests. We have no choice but to enhance our organization.

A couple of months ago, we drew attention to a news report from right-leaning media outlets stating that business leaders had proposed changes to the severance compensation related to years of service.

Indeed, the president of the Santiago Chamber of Commerce recently claimed, in statements reported by various media, that their organization presented a severance proposal to presidential candidates for 2025, which would be funded through employer contributions. In April 2025, the current President of the Republic J.A. Kast expressed support for such an initiative.

This proposal is not novel; it is part of the employers’ agenda, who have historically sought maximum flexibility and liberalization in employer-employee relations.

Ultimately, this aims to eliminate the severance compensation for years of service that is paid when layoffs occur for business needs, which equates to one month of severance per year of service, capped at 11 years according to labor law.

In his early statements, the Minister of Labor did not shy away from the topic, although he did not commit to concrete proposals. However, there were discussions in some opinion circles suggesting an employer contribution equivalent to 4% of monthly wages.

The Minister stated that the discussion would take place “later.” All indications are that this “later” has arrived, as reflected in his statements to Emol TV on June 18. It is clear that the proposal discussed by the minister does not include a 4% employer contribution. The capitalist argument from this government primarily focuses on eliminating severance payments for years of service as outlined in Article 161 of the Labor Code, citing the high cost for employers as the main reason.

However, this argument is not entirely accurate. According to La Tercera, in 2025, the grounds stated in Article 159, Nos. 4 and 5, accounted for 61% of contract terminations, whereas only 18.6% were due to business needs.

In other words, only 1 in 5 workers receives severance pay for years of service. Previous reports from the same source highlighted that the average tenure of workers in a company in Chile is just 3 years.

These statistics clearly indicate that eliminating severance compensation for years of service is unwarranted, and instead, legislation is needed to establish a universal severance package for the millions of workers left without indemnity due to the application of the clauses in Articles 159 and 160 of the Labor Code.

Undoubtedly, such discussions will not occur under a right-wing government, nor one from centrist or diluted left factions; these are issues of dignity that can only be achieved through robust worker organization that truly influences decision-making power.

But is the idea of a universal indemnity plan new? No, it is not, as the concept of minimizing or outright eliminating severance pay for years of service has been around since the democratic transition. On November 23, 1990—shortly after the commencement of Patricio Aylwin’s government—the law 19010 was enacted, primarily increasing severance pay from 150 to 330 days (from 5 to 11 years).

However, this legal norm covertly included a significant element: the introduction of universal indemnity. The reasoning is somewhat noble, as it mandates that employers of domestic workers—previously barred from receiving severance under the last clause of Article 159—must contribute to the Retirement Fund (AFP) an equivalent of 4.11% of the monthly taxable salary for the purposes of universal indemnity, capped at 11 years.

Following this, Law 19010 states that for other workers governed by the Labor Code, starting from the seventh month to the eleventh, both parties—employer and worker—may agree that in place of severance for years of service, there would be a universal severance of no less than a 4.11% monthly contribution from the employer based on the worker’s taxable salary.

It becomes clear, then, that there is little difference between a hard-right government and a «progressive government» regarding labor rights.

As an organization, we denounce the actions of this government from the outset, understanding that regardless of the administration, it will be the working class that must advocate for its interests. Only through a solid and powerful organization alongside the unwavering defense of existing rights can we prevail.

National Executive of the General Confederation of Workers of Chile

La entrada CGT Denounces Government’s Labor Policies: Calls for Strengthened Workers’ Organization Amid Proposed Changes se publicó primero en El Ciudadano.