/ Settlement and Resignation Will Now Be Electronic Procedures

Francisco Espinoza
Senior Associate
Alessandri Abogados

On November 12, 2021, Exempt Resolution No. 1,340 of the Labor Directorate was published in the Official Gazette, which in accordance with Law No. 21,361 establishes the following procedures:

1. Ratification of the settlement, resignation and termination by mutual agreement in the electronic portal of the Labor Directorate;
2. Requirement of the employer to pay and comply with the obligations arising therefrom in a timely and complete manner; and
3. Regulation of the reservation of rights by the employee in the electronic settlement.

The use of these electronic documents is optional, so the alternative of executing and ratifying the documents in person before a notary public is maintained. To access any of these procedures, both the employee and the employer must be previously registered in the page of the Labor Directorate.

The employee must have its “clave única” (sole password) provided by the Civil Registry and the employer must register one or more “labor representatives” to access the site using their clave única. The employer must also provide a contact e-mail address that is kept enabled, to which notifications and communications arising from the process of ratification of documents and payment of obligations will be sent.

All documents issued in this way shall be deemed ratified before a notary public, without the need to carry out additional procedures in person.

Execution and Ratification Procedure

Resignation

The employee must access the Labor Directorate’s website from his or her personal account, select “resignation” and follow the instructions indicated there. Once the form is completed and accepted, the resignation will be generated and notified to the employer, who must communicate the termination of the contract to the social security entities.

Termination by mutual agreement

The employer must access the document and complete the requested data. The document is notified to the employee so that he/she can indicate whether he/she accepts or rejects the employer’s proposal. The proposal will be available for ten business days, after which it will be understood as “expired”. If it is rejected, the employer is informed and the contract remains in force. If it is accepted, the contract terminates and the “mutual agreement of the parties” is perfected, which must be downloaded and kept available for on-site inspections by the Labor Inspectorate, unless authorized to centralize the documentation; and the employer must communicate the termination of the contract to the social security entities.

Settlement

The employer must submit a proposal with the required information. The employer must authorize the verification of the status of payment of the employee’s social security contributions. If there is any debt, the settlement proposal will be rejected and the procedure will be terminated. If there is no social security debt, the proposed settlement is communicated to the employee for review and ratification. The proposal will be available for ten business days, after which it expires. After that, the employer may make a new one or make the settlement materially available before a notary public. The employee may accept in pure and simple form, in which case the employer must proceed with the payment within five business days. The settlement may also be accepted “with reservations”, which must be entered in a special box in the terms that the employee freely states. The employer shall pay the amounts offered in the settlement within five business days.

If accepted, the “electronic settlement” is issued. It should be noted that:

• If there are no associated payments, it is issued within two administrative business days following the execution, counted from Monday to Friday.
• If there are associated payments, it is issued within two administrative business days following the actual payment, which must be made within five business days following acceptance.

The electronic settlement is issued with the content indicated by the parties, including any reservation of rights, and is available for consultation and downloading by the parties. In addition, it must be kept available for on-site inspections by the Labor Inspectorate, unless authorized to centralize the documentation. If the employee rejects the settlement, the procedure is terminated and the employer must make the settlement available to the employee before a notary public. It should be noted that:

• If the rejection occurs before ten business days from the termination of the contract, the settlement must be made available within the days remaining to complete those ten days.
• If the rejection occurs after ten business days, the settlement must be made available to the employee within the following three business days.

Payment

The employer must pay the amounts indicated in the settlement executed in pure and simple form, or the undisputed amounts in the Payment Portal. This will redirect him/her to the website of the General Treasury of the Republic (TGR), from which the transfer of funds to the TGR must be made, which will transfer the amounts to the employee’s bank account, or will manage the payment by cashier at Banco Estado or by check in the employee’s name sent to his/her home address. In addition, it will inform the Labor Directorate of the payment, which will be recorded and the electronic settlement will be generated. Only these payments will be considered by the Labor Directorate to complete the settlement execution process.

If the payment is not made within five business days, a record is left at the employee’s disposal for the exercise of the corresponding judicial or administrative actions.