Chile

The situation with COVID-19, the disease caused by the coronavirus, is still developing, but there are some key issues that employers should be aware of. Below you will find our guidelines for Chile with the following questions answered. Since the situation is rapidly evolving, check with us for the latest position.

1. Does the employer have any obligation to take preventive measures in its operations regarding COVID-19? 

Article 184 of the Labor Code imposes on the employer the obligation to adopt “all necessary measures to effectively protect the life and health of employees, informing them of possible risks and maintaining adequate hygiene and safety conditions at work, as well as the tools to prevent accidents and occupational diseases”. Article 3 of Decree No. 594 of the Ministry of Health approves the Regulation on basic sanitary and environmental conditions in the workplace. 

Although COVID-19 is not an occupational disease, some workplaces may be vulnerable to its spread. Hence, it is appropriate for companies to take certain preventative measures to face the spread of the disease.

Some of the main measures include:

  • Make disposable gloves, masks, and dry disinfectant soaps (alcohol gel) available to employees to promote and facilitate the implementation of healthcare measures in the workplace (e.g. frequently hand wash with soap, avoid contact with a distance of 1 meter, etc.).
  • Given that the expansion of COVID-19 is currently in phase 4 and the presence of employees within the company is a risk to all personnel, the employer must adopt the necessary measures to protect the health of its staff. An alternative is to monitor the temperature of employees. As for the formality of the exam, it would suffice to communicate via email indicating the time, place and order for temperature control.
  • In the case it is necessary to protect the health and integrity of employees, it will be possible to agree with all those employees who, according to their positions and duties, allow the provision of services through the teleworking modality, for which they must have an annex to the employment contract that clearly establishes the conditions and time period of the said agreement, and the employee must return to the company once this pact has expired. 

However, as there is no clarity on the end date of the contingency that would allow a date to be indicated in the annexes to the employment contracts, and only in view of this exceptional situation, the company can authorise permits to provide services from home for a certain time and defined in the same communication (to be extended in future negotiations).

2. Should employees inform the employer if they are sick?

Yes, the employees have the obligation to inform the employer promptly if they are infected with the coronavirus, so that the employer can take all the corresponding sanitary measures in the workplace and inform all those employees with whom the infected employee had contact, so that they can enter a preventive quarantine.

Sick employees must send the corresponding medical license to the employer to justify their absence and initiate a sick leave.

3. What should the employer do if an employee is infected with the virus or has symptoms?

If an employee with symptoms is detected, the employer should arrange the necessary measures so that he can go to a healthcare center to carry out the corresponding examination.

In the case of employees who were granted medical leave either because they were infected with COVID-19 or because they were granted preventive medical leave due to being part of a high-risk group, in the event of an eventual contagion or contact with an infected person, the employer must process the employee's respective medical leave. The sickness benefit of the health insurer (Isapre or Fonasa) will pay the remuneration of this employee, including profit sharing in the event that it is paid in this modality.

Special care must be taken for those employees who indicate that they have been infected by COVID-19 in the provision of their services. In these cases, only if the traceability of the disease can be effectively determined as of occupational origin, the disease may be classified as an occupational disease with the coverage of the benefits of the Occupational Accident and Professional Diseases Insurance established in Law 16,744.

4. Can employees wear face masks on the job site?

In principle, the use of the mask should be restricted to people with symptoms or people who care for patients. 

Notwithstanding, if there are conditions that could put personnel at risk, it is recommended to use it. However, it is important to clarify with employees the proper use of masks, since its use in an inappropriate way can generate other risks.

5. Can the employer prohibit traveling to areas at risk?

In accordance with the sanitary measures imposed by the authority, a "curfew" (“toque de queda”) has been imposed throughout the national territory from 10:00 pm to 5:00 am and the borders are closed. In addition, several communes and regions of Chile are under a "sanitary cord", which implies the prohibition of entry or exit from the city or region that is under this regime. Only people with safe passage documentation can enter and leave these areas. However, all must undergo a temperature control that detects suspected cases of coronavirus.

Additionally, in those communes where there is a greater number of infections, a quarantine has been imposed.

Therefore, corporate travel is not forbidden, but due to sanitary measures is very difficult to do.

We recommend limiting this kind of travel since it could expose employees to additional risks.

6. Can employees cancel their vacations?

The Labour Board has indicated that employees who are on vacation and then enter quarantine imposed by an act of authority will have their vacation term suspended for the quarantine time imposed by the authority.

Please bear in mind that under the Chilean labour law, the employer can unilaterally force its employees to use their vacations, through the use of "collective holiday", which has the following limitations:

  1.  It must be for the entire company or to certain areas or sections;
  2.  It must be implemented only once in the calendar year;
  3. It has a minimum duration of 15 business days;
  4. It is granted to all employees of the company or of an area or section, even when individually they do not meet the requirements for 15 days of holiday.
  5. In this case, the employer must assume the payment of the full remuneration, despite the fact that no services have been provided.

There is controversy over what happens if a company decrees a collective holiday, and then the authority orders quarantine in the same period. Although there are no Labour Board opinions that have foreseen this situation, we consider that:

  • If the authority decrees quarantine, the collective holiday is suspended. Thus, the collective holiday will resume once the quarantine ends. For example, if today a collective holiday is decreed, and then on Friday the authority decrees quarantine, this will imply that only five day of collective holiday will have elapsed, and the remaining balance of the holiday (ten business days) must continue to be exercised. once quarantine is complete.
  • The problem with the above is that if the quarantine ends and the employer wishes to return to work immediately, he will be banned from doing so because employees must continue to exercise the balance of the collective holiday.

This being the case and given that a national quarantine is likely to be ordered,  it would be convenient to wait for an act of authority to declare the suspension of the labour relationship due to force majeure.
 
Finally, an employee who has a fixed-term contract, his contract ends on the scheduled day, regardless of whether he has made use of the entire collective holiday that the employer has decreed.

7. Can employees refuse to participate in a work trip to a risk area?

In principle, no, since it would be an order from the employer. However, it is not recommended that employees be ordered to go to areas of risk of contagion, since the responsibility of the employer for limiting the contagion of the disease would be clear.

In the case that work travel is necessary, the employer must take all health and security measures to avoid contagion and exposure of the employees to the virus.

Bear in mind that in all areas where mandatory quarantine has been decreed, employees who are not from those companies that have activities declared essential must not go to work, understanding that the labour relationship is suspended due to force majeure.

8. What measures can be applied at this time regarding employment contracts?

Now, regarding what can or cannot be done according to the different workplaces and the contingencies associated with each of them, take in consideration the following:

8.1 Administrative staff who provide services in offices

The personnel who carry out tasks in facilities like offices can provide their services remotely, through the teleworking modality. This form of work would have a preliminary duration to be determined by the employer, a term that will be renewed according to the state of contagion of the disease at the national level, which is determined day by day.

By virtue of the foregoing, the employment relationship of these employees is not altered, since the provision of services continues to be carried out on a regular basis, there being no reason for the employer not to pay the corresponding remuneration.

8.2 Personnel whose functions cannot be carried out by telework

To date, the health authority has not established a mandatory quarantine for all Chilean territory, except in seven communes in the Metropolitan Region and three communes in other Chilean regions, so that employees must continue to provide services in those companies that are not in said communes under the security measures that have been imposed (e.g. alcohol gel available at points of sale, avoiding contact with a distance of one metre, among others). 

One way to reduce the risk of contagion is to decrease the allocation of staff or modify their hours of entry to and exit from the work site each day, always avoiding incurring non-compliance that could lead to fines or an attack on the operational continuity of the business.

In regard to these employees, and especially those who are part of the risk groups, the following alternatives emerge:

  • HOLIDAY: It can be agreed with the employees to make use of their legal vacations; however, this is a decision of the employee (it cannot be imposed by the employer), being the only way for the employer to force the use of holidays is through the "collective holiday" (review answer 6).
  • LEAVES: The Company may reach agreements to suspend the provision of services, by entering into permission agreements with or without remuneration.

There is no legal obligation regarding the payment of remuneration with those employees with whom an agreement has been reached, since the remuneration is granted by the employer only in case of the effective rendering of services by the employee. However, if the employer and the employee have agreed in the employment contract to pay monthly advances of the profit sharing, they will continue to be obliged to pay the said amount even if the employment relationship is suspended, since in that case the employer was simply advancing a payment to be made in the future.

The following should be taken into consideration in case of eventual closure or a request for quarantine:

  • If the closure is determined by an act of authority.

The Labour Board in their ruling N°1239/005 dated 19 March 2020 has indicated that when the Health Authority decides as a sanitary measure the close of the companies, it can be classified as force majeure for labour effects. However, this qualification must be determined on a case-by-case basis, being the courts of justice who must resolve the controversies associated with the said qualification.

Being considered force majeure, the parties to the employment relationship are released from their reciprocal obligations, which means they are prevented from granting the agreed job, suspending the employment relationship, and in the absence of an effective service provision, they are not obliged to the payment of remuneration. Later once normality is returned and the services for which they were hired can be rendered again, they can resume the labour relationship.

The Labor Board has indicated that the force majeure qualification of this crisis does not necessarily mean that the termination cause of article 159 No. 6 of the Labour Code (force majeure) is validly applicable. Thus, for the valid application of the cause of termination of the employment contract in question, the fact of closing a company by an act of authority is essentially transitory, so it would not be an irresistible fact that indefinitely prevents the return of the employee's services.

  • If the closure is determined by the client or the employer.  

Now, if the closure is due to an exclusive decision of the employer, it is a commercial decision, which cannot have an impact on existing labour relations, since our Labour Courts have indicated that responsibility for commercial decisions cannot be transferred to employees.

Regarding this case, our recommendation is that employers pay their employees at least a base salary and the variable bonuses that correspond monthly without discounting the days when closed by the principal.

9. In case of illness or quarantine, must wages be paid?

9.1 Illness

In this case, those employees will be granted medical leave because they were infected with COVID-19, and the Employer must process the respective medical leave and the sickness benefit of the health Insurer (Isapre or Fonasa) will pay the remuneration of this employee, including profit sharing in the event that it is paid in this modality.

9.2 Quarantine

The declaration of quarantine is considered a force majeure situation. In this scenario, according to our legislation and the interpretation of the Labour Board, the employment agreements must be immediately suspended, releasing both parts of their obligations. Therefore, an employee is not forced to work, and the employer is not forced to pay the agreed salary.

Notwithstanding, this shall be reviewed by the authorities on a case-by-case basis to avoid misuse of this alternative.

10. Can the employer send employees to home?

In the case it is necessary to protect the health and integrity of employees, it will be possible to agree with all those employees who, according to their positions and duties, allow the provision of services through the teleworking modality, for which they must have an annex to the employment contract that clearly establishes the conditions and time period of the said agreement, and the employee must return to the company once this pact has expired.

However, for those employees who were not allowed to provide services through the teleworking modality, they can be sent to their homes by the employer. Nevertheless, as this decision is taken by the Company due the legal obligation imposed to the employer in order to adopt all necessary measures to effectively protect the life and health of employees, wages must be paid, since employees cannot prevent being affected in any way by decisions based on the legal obligations of the employer.

11. What happens if the Company must close due to the coronavirus?

11.1 If the closure is determined by an act of authority.

The Labour Board in their ruling N°1239/005 dated on 19 March 2020 has indicated that when the Health Authority decides as a sanitary measure on the closure of the companies, it can be classified as force majeure for labour effects. However, the said qualification must be determined on a case-by-case basis, being the courts of justice who must resolve the controversies associated with the said qualification.

Being considered force majeure, the parties to the employment relationship are released from their reciprocal obligations, which means they are prevented from granting the agreed job, suspending the employment relationship, so that in the absence of an effective service provision, they are not obliged to the payment of remuneration. Later once normality is returned and the services for which they were hired can be rendered again, they can resume the labour relationship..

The Labour Board has indicated that the force majeure qualification of this crisis does not necessarily mean that the termination cause in article 159 No. 6 of the Labour Code (force majeure) is validly applicable. Thus, for the valid application of the cause of termination of the employment contract in question, the fact of closing a company by an act of authority is essentially transitory, so it would not be an irresistible fact that it indefinitely prevents the return of the employee's services.

11.2 If the closure is determined by the client or the employer.

If the closure is due to an exclusive decision of the employer, it is a commercial decision, which cannot have an impact on existing labour relations, since our Labour Courts have indicated that responsibility for commercial decisions cannot be transferred to employees.

Regarding this case, our recommendation is that employers should pay to their employees at least their base salary and the variable bonuses that correspond monthly, without discounting the days when closed by the principal.

12. Is the employer obligated to pay wages if employees must take care of their children because there is no one else to care for them?

No.

13. Is there an obligation to pay wages when a person is infected by COVID-19 for non-compliance with sanitary measures or as ordered by the employer?

It is not an antecedent to have in consideration whether or not the employee was infected by COVID-19 through his fault. In this case, these employee also will be granted a medical leave because they were infected with COVID-19, and the employer must process the respective medical leave and the sickness benefit of the health insurer (Isapre or Fonasa) will be the one who pays the remuneration of this employee, including the profit sharing in the event that it is paid in the said modality. 

14. Can the employee stay home for fear of becoming infected?

No, medical leave is granted for employees who either are infected with COVID-19 or because they were granted a preventive medical license due to being part of the risk groups in the event of an eventual contagion or have had contact with an infected person.

In any other situation where the employee stays home voluntarily, disciplinary sanctions, including dismissal, can be taken. 

15. Can the employer unilaterally order workers to remain at home and work from home?

15.1 Leaves

The company may reach agreements to suspend the provision of services, by entering into permission agreements with or without remuneration.

There is no legal obligation regarding the payment of remuneration to those employees with whom an agreement has been reached, since the remuneration is granted by the employer only in case of the effective rendering of services by the employee. However, if the employer and the employee have agreed in the employment contract to pay monthly advances of the profit sharing, they will continue to be obliged to pay the said amount even if the employment relationship is suspended, since in that case the employer was simply advancing a payment to be made in the future.

However, if the employer unilaterally orders workers to be at home, it will be considered a measure based on the legal obligation imposed on the employer in order to adopt all necessary measures to effectively protect the life and health of employees. Therefore, wages must be paid, since employees cannot be affected in any way by decisions based on the legal obligations of the employer.

15.2 Teleworking

In case it is necessary to protect the health and integrity of the employees, it will be possible to agree with all those employees who, according to their positions and duties, allow for the provision of services through the teleworking modality, for which they must have an annex to the employment contract that clearly establishes the conditions and the time period of the said agreement. The employee must return to the company once this pact has expired.

Teleworking cannot be imposed unilaterally by the employer.

Authors

Enzo Canales Laywer CMS Law
Enzo Canales