The ruling extends the applicability of the grounds for dismissal based on lack of integrity to employee conduct that affects the company.
On March 23, 2026, the Supreme Court (Case No. 49746-2024) unified the jurisprudence regarding the applicability of the grounds for dismissal based on lack of integrity against an employee who, while on medical leave, uses their time off to travel outside the country.
The case in question involves an employee who, while on medical leave, traveled to Argentina and was terminated on the grounds of lack of integrity.
Thus, the Court of Appeals determined that such conduct did not necessarily imply a lack of integrity on the part of the employee, since, in its view, “Since the provision is limited to conduct by the employee in the performance of their work duties, it is clear that it does not cover conduct in their private life.”
Thus, the matter was brought before the Supreme Court so that it could determine “whether the grounds for termination established in Article 160(1) of the Labor Code can be met in the event that an employee on medical leave ordering complete rest completely violates that instruction and, for purely recreational and tourist purposes, travels outside the country.”
Consequently, and following the Supreme Court’s review of the case, the Court held that the conduct described constitutes a breach of good faith by the employee, entitling the employer to terminate the employment contract of an employee when the employee engages in dishonest conduct, or lacks integrity or rectitude in the performance of their duties—which the Court finds to be the case here, given that the employee used sick leave precisely to absent themselves from their duties and travel abroad, thereby causing—among other things—an impact on the normal operation of the company.
Accordingly, and expressly upholding the decision of the Court of Appeals—and in what we consider to be the most relevant aspect of this ruling—this court holds that “the wording of the aforementioned provision, regarding the requirement that the lack of integrity be committed by the employee in the performance of their duties, does not require, as the contested ruling understands it.
The court emphasizes “that the act be committed in connection with the work entrusted to the employee and that the resulting harm to the company, the employer, or other employees be in a direct causal relationship, since it also includes acts that affect the employee’s performance and the smooth operation of the company.”
Finally, it is important to note that the ruling extends the applicability of the ground of lack of integrity to those acts of the employee that affect the company, thereby allowing the employer to sanction not only conduct by an employee occurring in the direct exercise of the duties for which they were hired, but also conduct occurring outside of work to the extent that it affects the employment relationship, trust, or the operation of the company.
For more information on these issues, please contact our Labor Group:
Jorge Arredondo | Partner | jarredondo@az.cl
Jocelyn Aros | Director Labor Group | jaros@az.cl
Felipe Neira | Senior Associate | fneira@az.cl
Palmira Valdivia | Associate | pvaldivia@az.cl
Manuel Sepúlveda | Associate | msepulveda@az.cl
Catalina Díaz | Associate | cdiazp@az.cl
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