Labour reform introduced in 2017 bolstered unions' influence in determining which compensations a company may grant to its employees, because unions must now authorise the company to extend the application of the collective bargaining agreement to non-union employees. Such authorisation is not required for benefits based on employees' skills, suitability, responsibility or productivity, but applies to any other benefit stemming from the collective bargaining agreement that the company wishes to extend to non-union employees.

The debate arose around the question of whether benefits added to the collective bargaining agreement triggered the need to obtain union authorisation to extend the agreement to non-union employees, even for benefits that were historically granted to non-union employees before being added to the collective bargaining agreement. This interpretation was consistently upheld by the Labour Board in recent months, restricting the right of non-union employees to maintain their status quo on compensation matters, reducing the company's discretion in compensation matters and indirectly forcing non-union employees to join the union.

However, this position recently changed. Following an opinion rendered by the Labour Board (Ruling 3826/031, dated 20 July 2018), companies may continue to extend to non-union employees benefits which they received before they were added to a collective bargaining agreement, because such benefits are not an attribute of the collective bargaining agreement for non-union employees. This new position impedes union interference in the granting of benefits to employees who are not involved in union activity (eg, sub-managers).

For further information on this topic please contact Ignacio Garcia or Fernando Villalobos at Porzio Rios Garcia by telephone (+56 22 729 0600) or email (igarcia@porzio.cl or fvillalobos@porzio.cl). The Porzio Rios Garcia website can be accessed at www.porzio.cl.

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