Chile Supreme Court rules on fee-based public service contracts

The Supreme Court of Chile has ruled on a case involving the classification of service contracts within the public administration. The court declared inadmissible an appeal filed by the Municipality of Carahue regarding a previous ruling that recognized a formal labor relationship between the municipality and a worker.

The worker had provided services under fee-based contracts (honorarios) between February 2020 and December 2024. However, labor courts determined that the individual performed permanent functions characterized by subordination and dependency, including fixed schedules, supervision, and control. This established the existence of an indefinite employment contract, leading to a ruling for unjustified dismissal and the collection of benefits.