Resignation & Mutual Agreement in Chile

Two ways to leave a job without being fired

The Código del Trabajo lists two voluntary ways to end an employment contract in Chile. One is the employee's resignation (renuncia), which requires written notice to the employer, generally thirty days ahead. The other is a termination by mutual agreement (mutuo acuerdo), where both sides agree to end the contract and the terms are written down. Both appear in article 159 of the Labor Code.

These routes look simple, which is exactly why they cause trouble. Employees sometimes sign a resignation letter after a conversation in which they were told they would be dismissed otherwise, and employers sometimes sign a mutual agreement without realizing it has to be properly ratified. In either case the rights that depend on being dismissed, mainly severance by years of service, are normally not owed unless the parties agree to them. If you are an executive being asked to leave quietly, or a foreign employer winding down a role, the terms of the exit matter more than the label. We explain how severance is calculated on our page about severance pay.

What we handle

Ratification and what a resignation costs you

A resignation or a mutual agreement only has full legal effect if the document is ratified, meaning signed before a ministro de fe such as a notary, an inspector of the Dirección del Trabajo or another official the Labor Code authorizes, or through the electronic platform of the Dirección del Trabajo. Without ratification, the employee may later argue that the document does not prove a voluntary departure, and the employer may find itself facing a dismissal claim it did not expect.

Resigning generally means no years-of-service severance and no payment in lieu of notice, although accrued items such as proportional vacation, final salary and earned benefits are still owed. Access to unemployment insurance benefits can also be affected by the way a contract ends, so check that before you sign. If a resignation was obtained through error, force or fraud, Chilean law allows the employee to challenge the document, but the case is hard to prove and the deadlines are short.

Negotiating an agreed exit

A mutual agreement is a negotiation. Employers who prefer to avoid a dispute may offer an amount comparable to or higher than the severance an employee would receive after a dismissal, together with a reference or an agreed communication. Employees can ask for more, for a longer period of benefits, or for payment of items that are in doubt, such as variable pay.

What a good agreement contains: the exact termination date, a list of every payment, the treatment of unused vacation, confirmation that social security contributions are current, and a clear statement of what is released. Because Chilean law does not allow workers to waive certain rights in advance, a poorly drafted release can fail on the very points both sides wanted settled. We prepare it so that it works under Chilean rules, not just under the template the headquarters sent.