[REVISION HISTORY]

Chile labor court litigation surge and evolving rulings

Updated 2 times since CLSTR started tracking revisions of this situation.

What changed

2026-08-17 21:42 UTC → 2026-08-26 01:33 UTC · added ~~removed~~

In late July 2026, Chile’s labor courts reported a dramatic increase in filings, with cases rising from approximately 35,000 to over 112,000 in five years. Unfair-termination dismissals accounted for roughly 60% of proceedings, a 262% increase. This surge was linked to reforms such as the Karin Law, the 40-hour workweek, and stricter data-protection rules. The system also faced strain from the automated submission of over 38,000 AI-generated documents, which temporarily crippled the virtual judicial office. By August, courts began issuing substantial compensation orders. One ruling required a real-estate official in Calama to pay more than 16.9 million pesos for retaliating against a worker who reported sexual harassment. In Punta Arenas, two foundations were ordered to pay over 117 million pesos to an accountant dismissed under false pretenses. In mid-August, judicial rulings further expanded the scope of employer liability by distinguishing between economic compensation and reparations for psychological harm. The Santiago Court of Appeals ruled in a case involving Enel Generación Chile S.A. that legal indemnities for constructive dismissal do not substitute for compensation for moral damage, specifically regarding mental health issues like post-traumatic stress caused by harassment. Additionally, Empresa Nacional del Petróleo (Enap) Magallanes was ordered to pay approximately 82 million pesos to a worker, after a judge found the company failed to consider less severe disciplinary alternatives before dismissal. These developments underscore a growing judicial emphasis on mental health and the necessity for employers to adhere to good-faith principles and proportional discipline. By late August, the Supreme Court upheld a ruling regarding labor harassment at the Dr. Philippe Pinel Psychiatric Hospital in Putaendo. A nurse was awarded a maximum legal indemnity following confirmed fundamental rights violations; due to payment delays, the total amount owed, including fines and interest, has risen to over 24 million pesos.

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