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Original article: Agenda laboral del Gobierno: ¿Una tormenta perfecta?

By Manuel Ahumada Lillo, President of the CGT

If the authorities’ proposals come to fruition as legislation – and we have heard enough about the intended changes – we can conclude it will lead to a perfect storm.

Firstly, the proposal includes alterations to the current regulations regarding severance pay for years of service, which would directly reduce employer costs while increasing their freedom to hire and fire workers.

The permanent mobility mentioned is made significantly easier when indemnities do not need to be paid, and employers are not obligated to provide reasons for terminating an employee’s contract, giving credibility to the authorities’ narrative.

If such a law is introduced and passed, employers will be able to terminate contracts for any reason, and workers will only be entitled to a 21.6% severance payment as specified by law. This was highlighted by Labor Minister Tomás Rau during an interview with Emoltv on June 18, 2026, where he discussed «an additional contribution of 1.8% monthly from employers to workers’ unemployment insurance accounts.»

It is evident that dismissals for business needs do not entail high costs. According to official data, in 2025, 18.5% of severance payments were due to this reason (Article 161 of the Labor Code). Therefore, if the goal is to support workers, attention should be given to the 81.5% of employees without severance rights, rather than eliminating existing rights such as severance payments for years of service.

A provision could feasibly be established for severance in cases of employee resignation, serving as a complementary indemnity mechanism to the current regulations.

Lastly, it is worth acknowledging a report from the Parliamentary Technical Advisory in August 2025, which indicates that in 2023, the average tenure of workers with indefinite contracts was 48.3%, while those with over ten years of service only constituted 17.3%.

Consequently, the main objective, if not the only one of this proposal, is to support the flexibility practices being suggested. Workers may be hired during peak production, sales, or service periods, and subsequently laid off during slower periods. Employers could hire on fixed-term or part-time contracts, alleviating any worries regarding severance payments. This presents a favorable scenario for certain sectors of society.

Secondly, the approved regulations regarding the implementation of a 40-hour workweek (which will not be fully in effect until 2028) indicate that the workweek can be completed either weekly or over a period of up to four weeks (Article 22, first paragraph of the Labor Code).

Furthermore, the first paragraph of Article 22 bis states that if the workweek is agreed upon in a single cycle of four weeks, workers can work up to 45 hours in at least two of those weeks. It also mentions that daily and weekly compliance calendars will be established, which can vary depending on the number of agreed-upon cycles.

Interestingly, the law states that «the parties may resolve whether (to comply with the workweek) in weekly hours or in cycles of up to four weeks,» meaning the company and worker must agree on how the legal norm will be applied.

Now, we must be clear that in this situation of «the parties,» one holds nearly total power to dictate terms, except when faced with a representative union of the majority of workers. The law clearly states in the third paragraph of Article 22 bis that if this cyclical system is applied to a unionized worker, prior agreement from their union is required.

Finally, the last paragraph of Article 22 bis states that through collective bargaining or direct agreements with unions solely concerning their members, it may be arranged that the weekly limit of two 45-hour weeks, as indicated in the first paragraph, can be extended to 52 hours within those two weeks.

As it stands, the law allows unions some maneuvering space to optimize its application in the interests of organized workers. However, statistical data reveals that less than 20% of Chilean workers are unionized, meaning, initially, only 1 in 5 workers could negotiate these norms.

However, it is evident that many unions boast inflated or outright fictitious membership numbers, creating a harsher reality. Workers are not in a position to negotiate favorable terms against employers.

These factors, combined with a parliamentary composition less inclined towards maintaining and improving workers’ rights, and the approval of previous laws from 1990 to 2024 that endorse multifunctionality, event-based severance, and flexibility, enable the current government to propose changes to the 40-hour law, which has yet to be fully implemented.

Thirdly, the government’s and employers’ proposal is clear: intensify labor flexibility regulations, which primarily includes extending the number of weeks for completing a cycle from the current four weeks to 15 or 16 weeks.

Initially, this announcement would allow for the establishment of three cycles per year (16 weeks is nearly one-third of the year), enabling employers to predict periods of high production, occupancy, or service demand and shape these into cycles for workers. Adjustments may also be made regarding these cycles.

The employers’ relentless pursuit of eliminating rights is so substantial that they have suggested the possibility of extending the number of weeks, even up to 52, for workers in the tourism sector, although it remains to be seen which specific areas will be included (hotels, restaurants, etc.).

Fourthly, they have also indicated the need to enhance labor multifunctionality, which requires modifying Article 10 of the Labor Code.

It should be noted that Article 10, which outlines what must be included in an employment contract, clearly stated in point 3 that the nature of the services to be performed by the worker should be specified. This article was amended in 2002 by Law 19759, adding the phrase: «The contract may specify two or more specific functions, whether alternative or complementary» ¹.

Thus, it is clear that multifunctionality was firmly established since 2002, allowing a person to be hired to perform any tasks their employer determines in the contract. What more do they wish to add?

All the above considerations lead us to use the phrase «a perfect storm,» which has taken shape through the series of legal modifications permitted during the Concertación governments and culminated with the 40-hour law, which undoubtedly allows employers increased flexibility.

It is regrettable that, to date, there has been no firm and clear response from various union federations, nor from political parties claiming to represent the working class.

The challenge we face is clear. We must establish mechanisms to defend the rights we currently have, which are clearly intended to be diminished, and construct a concrete and clear platform for struggle that unites the working class and encourages organized labor, the only tool for advocating and defending our rights.

Manuel Ahumada Lillo
CGT CHILE

NOTE

1 It is said that in the labor field, a specific function precisely defines the tasks, responsibilities, and purpose for which a worker was hired, differentiating it from other jobs and providing legal certainty about their role.

La entrada Government’s Labor Agenda: A Perfect Storm on the Horizon? se publicó primero en El Ciudadano.