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Original article: “El gobierno está siguiendo los intereses de la CPC”: Gonzalo Durán alerta por ofensiva laboral de Kast

As the far-right government under José Antonio Kast pushes forward with a legislative offensive that alters the foundation of the Labor Code, concerns are rising among academic and labor circles. Economist Gonzalo Durán Sanhueza raised alarms that the reform not only undermines worker protections, but also indicates a strong alignment with the Confederation of Production and Commerce (CPC).

«It’s no surprise that the government is fundamentally following CPC interests,» the academic stated, questioning the supposed neutrality of the labor reactivation committee advising the Executive.

«They claim that the Labor Directorate has transformed into an entity that mainly issues rulings in favor of workers, which is not unusual in labor law, given that in the capital-labor relationship, the weaker party is the workers who must sell their labor to the employers. Therefore, there is an imbalance, and this is the purpose of labor law: to somewhat balance this asymmetry, and that’s why the Labor Directorate aims to side with the workers,» explained the academic from the University of Chile.

«Now, what this government has stated is that this is creating tremendous bureaucracy for companies and increasing the cost of layoffs, for example, stemming from Article 161 concerning the needs of the business, where many layoffs are often contested by workers, and the Labor Directorate sides with the workers. This means that ultimately companies have to elevate the cost of layoffs by nearly 30%. Thus, they are trying to eliminate any kind of increase in layoff costs,» warned the member of Fundación Sol in statements to Radio Nuevo Mundo.

At the center of the controversy are two structural changes: the alteration of the workday and the elimination of compensation for years of service. Durán explained that these reforms, far from benefiting employees, act as means to provide companies with more hours of labor at lower wages, while enabling terminations without the cost associated with seniority.

«What they are changing is how these are calculated, but if this provision eliminating indemnification is approved, companies could lay off workers after just a few weeks of working 52 hours,» he detailed.

The official proposal aims to replace the current indemnification system (which compensates for up to 11 years with employer resources) with an individual fund financed by 1.8% of each person’s salary contributions. Durán describes this change as «a substantial saving» for companies, but one that would negatively impact workers’ finances. «For someone earning a million pesos, if they worked for two years under the current scenario, they would leave with 2 million; however, under the proposed scheme, with a 1.8% contribution, they would accumulate about 432,000 pesos,» he warned.

Beyond the numbers, Durán criticized the composition of the so-called labor reactivation committee, popularly known as the «Bravo Commission» due to economist David Bravo Urrutia, who labeled workers as ‘a hassle.’ He indicated that the makeup and recommendations of this body show a clear bias toward the employer sector.

Another of the measures included in the report aims to expand the reasons for layoffs due to business needs and create an inter-ministerial commission to avoid judicial proceedings over layoffs, which according to Durán constitutes «a classic aspiration that has been pursued by employers for many years» and confirms the government’s submission to CPC interests.

Increasing Wages Creates Jobs

In relation to the minimum wage debate, Gonzalo Durán referred to international evidence to debunk free market myths. Regarding the argument that raising base salaries destroys jobs, he noted that research from England and the United States shows the opposite.

«Many times, the minimum wage basically strengthens the aggregate demand, meaning more consumption,» he explained.

To conclude, Durán appealed to statistics from the INE which reveal that «half of the workers in Chile earn less than 680,000 pesos net as their primary income per month; that answers everything.» In this context, Kast’s labor offensive is not viewed as a reactivation but as a setback that deepens inequality in the labor sector of the country.

La entrada «The Government is Favoring CPC Interests»: Gonzalo Durán Sounds Alarm Over Kast’s Labor Offensive se publicó primero en El Ciudadano.