The relationship between the Chilean labor movement, the business sector and the government has dramatically improved since democracy returned in 1990. In fact, these three sectors have negotiated a series of national agreements, regarding issues such as the annual adjustment of minimum wage, training and the promotion of workers rights. While labor conflicts will not disappear, there are negotiation mechanisms in place that regulate collective bargaining, including the right to strike.

Since 1990, labor unions have grown stronger, workers’ rights are fully respected and the increased dialogue between labor, business and government has resulted in a more balanced national labor policy.

The Lagos Administration has set the following objectives regarding labor:

• The improvement of labor productivity and the quality of jobs while maintaining a low unemployment rate.

• The protection of workers’ rights and improvement of working conditions.

• The strengthening of the social security system.

• Increased consultation and participation between labor, business and government.

• The promotion of initiatives aimed at securing equal treatment of women in workplace.

• The establishment of unemployment benefits (insurance) for workers who lose their jobs.

Chile’s dramatic economic success in recent years has been, in large extent, due to the increase in training, specialization and productivity of its workforce. In this regard, Chilean labor is competing effectively in world markets. Equal pay for equal job and anti-discriminatory laws are now reinforced. Chile has ratified 48 International Labor Organization (ILO) Conventions. The law provides women with equal access to all employment. Gender discrimination is prohibited by law.

In Chile, around 18 % of the labor force is unionized and 96% of unionized labor is affiliated to the United Workers Federation (CUT). Strikes last for an average of eight days.

Basic labor information on Chile (February 2005)

• Minimum monthly wage: US$ 287. This amount places Chile in third place in Latin America in terms of higher minimum wage.

• Average Real Monthly Wages:

• US$ 680, applicable to 30% of the labor force (Industrial sectors, metalworking, energy, transportation and construction).

• US$ 490, applicable to 35% of the labor force, most of the textile area, agro-industry, mining (except copper), trade and services (including the public sector)

• The remaining 10% of the labor force corresponds to sectors with higher salaries.

• Labor force: 6,382,000

• Number of employees: 5,845.520.

• Number of unemployed: 482,580

• Rate of unemployment (national level): 7.6%

• Businesses are encouraged to promote, facilitate and develop fully compensated occupational training activities for beneficiaries.

Maternity Benefits:

• State subsidized maternity leave for six weeks prior and twelve weeks subsequent to birth; in the case of death in childbirth or during postnatal leave the father has the same rights.

• Special subsidized leave for mothers in case of specific illness of a child less than one year old; transferable to the father at her option.

Occupational Accidents:

• Employers make a mandatory contribution to Insurance Mutual Funds of 0.90% of their taxable salary plus an additional 0.85 to 3.4% -depending on the activity and risk of each business-, which provide medical benefits and subsidies or workman’s compensation.

• The Law requires Worker/Management Health and Safety Committees in companies with more than 25 workers and a risk prevention expert in companies with more than 100 employees.

Unemployment Benefits (Working Insurance)

• Benefits for workers who lose their jobs have been established by the government; it plans for more than 2 millions workers. During 2003, almost 200 thousand of those eligible workers received monetary benefits from the system.

Training

• 850,000 workers received annual training in 2003 paid by the government. The objective is to expand the opportunity to five million within five years.

Enterprise/Worker Relationship

• The right of workers to unionize is recognized and freedom to join and withdraw is guaranteed.

• Employers cannot penalize or discriminate against employees for actively belonging or not belonging to a union.

• Right to organize shop unions, inter-shop unions, independent unions, part-time or temporary workers unions, and to constitute federations, confederations and central labor organizations, and for such entities to join or withdraw from international union organizations.

• Union dues discounted from salary.

• Collective bargaining rights:

• Business level collective bargaining mandatory for employer.

• Right to strike; special conditions for replacing strikers.

• Conditions established for declaring lockout.

• Voluntary mediation or arbitration when decided by mutual accord; obligatory arbitration in essential public enterprises.

• Employer, union or worker can be sanctioned for unfair practices which interfere with collective bargaining.

• The Bureau of Labor supervises collective bargaining.

• Labor Courts have jurisdiction to hear cases on labor matters.