We invite you to read the column written by our partner Jorge Arredondo, where he addressed the entry into force of Supreme Decree 44 of the Ministry of Labor and Social Welfare and the challenges it presents.
At the end of last year, the Spanish Supreme Court made a historic change in its doctrine and, in relation to ILO Convention 158, entitled “On the termination of the employment relationship”, established that there was a duty on the part of companies to carry out a disciplinary process prior to the dismissal of an employee who had committed a breach of his or her labor duties, unless the employer could not reasonably grant this possibility. This, in order to analyze whether the employee had indeed performed an action contrary to the company’s internal regulations and to weigh the appropriate system of sanctions. That is to say, as a due process before a dismissal.
Prior to the Spanish Supreme Court’s pronouncement, there was a discussion in Chile as to whether or not the employer had the duty to investigate a labor infraction before applying a penalty regime. And, although Chile has not ratified Convention 158, on February 1 of this year Supreme Decree (DS) 44 of the Ministry of Labor and Social Welfare came into force, which refers to prevention issues that the employer must take into account in the duties of care and protection of workers.
Article 61 of this Supreme Decree establishes that “the internal regulations will contemplate sanctions for workers who violate its provisions, after the corresponding disciplinary procedure has been carried out”. Is this figure contemplated in the SD a kind of “prior hearing” that is being incorporated into our labor law in an administrative manner?
There are three issues that need to be clarified. The first is that if the answer to the above question is affirmative, the regulations of a convention – 158 – that has not been ratified by our country would be applied. Secondly, this prior procedure is not contemplated in Chilean law. Our labor legislation establishes the administration, management, disciplinary and sanctioning powers of the employer, within which it can proceed to terminate the employment contract in the event of any of the grounds set forth in the law. No section of the Labor Code contemplates a “prior hearing” or the initiation of a disciplinary process. Therefore, the regulation cannot establish a procedure that is not enshrined in the law.
The third problem -and perhaps the most important- is that this Supreme Decree limits the employer’s powers in an unfounded manner and without any legal support. Likewise, it would imply that in labor relations there would be an exercise of jurisdiction by the employer. What the employer does -and must do- is to ponder if there was a fault and if this, based on a gradualist theory, entails a dismissal without the right to severance pay. Then, whether or not it is appropriate is a judicial discussion.
In short, Supreme Decree 44 poses a significant regulatory challenge. While the purpose of strengthening due process in the labor sphere is laudable, it cannot be achieved at the cost of violating fundamental principles of labor law and the Constitution. The fundamental discussion remains open: to what extent can a supreme decree introduce obligations that the law has not foreseen? The answer to this question will not only define the scope of this regulation, but will also set a precedent in labor relations established through an administrative process, as well as the rights of employers and workers.
Column written by:
Jorge Arredondo | Partner | jarredondo@az.cl
