Chile withdraws bill on multi-level collective bargaining reform

At a glance

• On 17 March 2026, Chile’s new government withdrew the prior administration’s bill on multi‑level collective bargaining from Congress.
• The bill would have expanded collective bargaining rights to allow negotiations at industry and economic sector level.
• Under Chilean law, only the President can introduce legislation modifying collective bargaining procedures, and withdrawal halts the legislative process entirely.
• The proposal had raised concerns among employers due to its potential impact on labor relations and operational flexibility.
• The withdrawal signals a policy shift and has been broadly welcomed by the business community.

On March 17, 2026, Chile’s newly appointed government formally withdrew from Congress the previous administration’s bill proposing a reform of the collective bargaining framework. The withdrawal forms part of a broader package of measures aimed at supporting economic growth.

The bill sought to introduce a multi‑level collective bargaining system by expanding the scope of negotiations beyond the company level to include industry‑wide and economic sector‑level bargaining on employment terms and conditions. Such a reform would have represented a significant structural change to Chile’s existing labor relations framework.

Under Chilean constitutional rules, the President holds exclusive authority to introduce legislation concerning collective bargaining procedures. As a result, the government’s decision to withdraw the bill effectively brings the legislative process to an end and prevents further parliamentary debate on the proposal unless a new bill is introduced.

The proposed reform had generated considerable concern within the business community, particularly due to comparisons with collective bargaining models in other Latin American jurisdictions that have been associated with reduced flexibility in labor relations and increased operational constraints. Against this backdrop, the withdrawal of the bill has been positively received by employers.

For now, the existing collective bargaining framework remains unchanged. Employers should nonetheless continue to monitor labor policy developments, as the government’s approach to employment and industrial relations reform continues to evolve.