Collective goals system and the origin of the payment of the consecutive week’s salary

Nov 10, 2023

At the time of resolving the controversy, the Court of Appeals proceeded to reject the appeal for annulment filed by the plaintiff former employee.

On October 18, the Court of Appeals of Santiago ruled on the appeal for annulment filed by a former employee (case Rol Ingreso Corte No. 2987-2022), who alleged that the judge of instance, at the time of ruling on his claim for the collection of benefits (one working week) and nullity of the dismissal, had incurred in an erroneous interpretation of the law (mainly in relation to article 45 of the Labor Code).

This was due to the fact that the variable remunerations that he received due to the rendering of services in favor of his employer were not accrued on a daily basis, in circumstances in which the aforementioned article 45 of the Code did not establish such requirement.

Thus, in his argument, the plaintiff argued that “(…) although the commissions were paid at the end of the month, there is no doubt that they correspond to a percentage of the sum of all daily sales in a month, so it is not correct to argue that they are not accrued on a daily basis, since it is clear that the commission depends on the work performed daily by the plaintiff and that the payment is a percentage of the individual sales, this activity being part of his daily duties, although its amount will only be known at the end of the respective monthly process“.

In this way, he requested -in short- that the Court of Appeals proceed to annul the judgment of the labor judge of the first instance, issuing the respective replacement judgment in which his action for the collection of benefits related to the week’s salary allegedly owed by his employer was upheld and, also, derived from that, the defendant was ordered to nullify the dismissal for not paying the social security contributions derived from what he should have received for the week’s salary.

Well, at the time of resolving the controversy, the Court of Appeals proceeded to reject the appeal for annulment filed by the plaintiff former employee, stating that “(…) it should be made clear that the appeal is wrong in the statement that the judge dismissed the right to a week’s salary because the commission was not accrued on a daily basis, nor did she take into consideration the complexity of the calculation of the variable stipend”.

On the contrary, the judge took into account only the collective nature of the bonus, which excludes considering it as the result of her own effort or individual work. The conclusion, in the opinion of this Court, is correct because the circumstance of having mixed remuneration, although it is the basic assumption to generate the benefit of the “working week”, the variable part of it must necessarily be associated to the individual personal effort of the worker that allows projecting it to Sundays and holidays when he does not work“, he emphasized.

Finally, the court concluded that “the system of collective profit credited (total sales of the store) prevents estimating that Sundays and holidays have not been adequately remunerated, since it accounts for the work of all the store’s workers every day, since while one is resting there is another worker generating sales that will benefit everyone“.

Thus, the Court’s reasoning in this regard is interesting, in that the variable part of a mixed remuneration, to the extent that it obeys a cause or has a collective nature (that is, that its accrual is not associated solely with the individual effort or labor of each worker), would not entitle the employee to receive any payment for the concept of a “working week”, since it would have to consider the work performed by all the workers every day, which would preclude considering that with this collective “well” system, Sundays and holidays have not already been remunerated.

For more information on these topics, please contact our #azLabor group:

Jorge Arredondo | Partner | jarredondo@az.cl

Jocelyn Aros | Senior Associate | jaros@az.cl

Felipe Neira | Associate | fneira@az.cl

Palmira Valdivia | Associate | pvaldivia@az.cl 

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