Tuesday , May 30 2023

The Government examines possible changes to the compensation scheme for years of service


December is the month of the government to enter the workforce modernization project in Congress, which will provide rules to make working days more flexible and to change the measures implemented by the labor reform promoted by the former president's administration, Michelle Bachelet.

For this initiative and others related to service modernization, the Ministry of Labor convened commissions both experts and multi-men who entered the final stage to forward their referral reports later on before the project enters Congress.

In this context, portfolio owner Nicolás Monckeberg said that "it is very important for the labor market to promote employment opportunities.

Sometimes we have rules that leave workers anchored in the workplace and discourage the search for new opportunities, as is the case with our compensation scheme for terminating the contract, which discourages the possibility of a new employment opportunity, because if I lose it all my seniority in the company . "

In this regard, and before any change, the Secretary of State said that "we are evaluating, we have not solved, because we want to make a stage of intense conversation in the working tables and on the basis of all these things we want to make a proposal for modernization" .

Sources in the paper confirm that they look at various alternatives in this regard, including compensation for any event (dismissal or resignation).

More years?

Currently, in Chile, Article 163 of the Labor Code regulates the payment for the length of service to a worker employed at the time of dismissal.

"If the contract had been in force for one year or more and the employer has terminated it in accordance with Article 161 (needs of the company), it must pay the worker compensation for the years of work the parties have accepted individually or collectively "says the norm.

He adds that "the employer must pay the worker an indemnity equivalent to thirty days of the last monthly remuneration earned for each year of service and a fraction of more than six months continuously provided to that employer. This compensation will have a maximum limit of three hundred and thirty days of pay (11 years, ie 11 maximum wages) ".

For the economist and academician at Los Andes University, Cecilia Cifuentes, one of the biggest distortions of labor law is the compensation system: "It is a policy that generates excessive rigidity on the labor market and also generates a perverse sense" .

In this context, he says he should be at any time but with a pay limit of 4 to 6 months, which is the average time a person takes to find a job.

Director of the Center for Development Studies, Luis Eduardo Escobar, said the revision of the regulation is also important, but together with the strengthening of unemployment insurance.

"You have to look at the set of problems in the labor market. It is necessary to address the consolidation of unemployment insurance, considering what the compensation formula should be."

They offered 3 thousand technological jobs

More than 3,000 jobs were offered at the FET 2018 Labor Day, inaugurated yesterday by Labor Minister Nicolás Monckeberg.

"We can not remain in the past, because it is unfair to allow workers to cope with these technological changes. That is why an important part of ministry dedication has to do with accompanying and supporting our workers in the new times," said the authority.

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