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Chile's labour reform will pass this year

Thursday, January 29, 2015

Subject

The pending labour reform bill.

Significance

Complying with an important election promise, President Michelle Bachelet has presented a bill to Congress to strengthen trade unions and encourage more widespread collective bargaining in the private sector. Given the governing coalition's majority in Congress and broad agreement among its parties on the bill's terms, it is expected to become law largely in its current form, probably by mid-year.

Impacts

  • Small companies, where unionisation is now uncommon, are particularly concerned about the reform's implications.
  • A key disincentive for union membership -- non-members' access to the benefits it obtains -- would disappear with the reform.
  • Trade unions are urging authorisation of sector-wide collective bargaining but this would require constitutional reform.
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