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Labor training instead of layoffs

This morning, President Michelle Bachelet signed a National Agreement for Employment, Training and Labor Protection that aims to prop up employment, protect jobs, train workers and increase the competitiveness of Chile’s economy.

It consists of six instruments that would benefit some 125,000 people over the next 12 months. The agreement was drafted with the participation of large, medium and small business representatives and the main worker’s union, linked to the government.

The agreement, Bachelet said, is an attempt to create conditions so “employers opt for training instead of layoffs,” providing government support for labor training to improve workers’ skills.

The six instruments include incentives for companies to keep and train workers and an extension of unemployment insurance to workers with temporary contracts. As an alternative to layoffs, an employer and worker may voluntarily agree on a five-month leave in which the employee would not work for the company, but instead attend labor training. Workers would receive 50 percent of their average income, to be financed in part by the employer and partly through the unemployment insurance system. During this period, work contracts and labor rights would remain intact.

The agreement also includes grants for women who are the heads of their households and who have started small companies, duplicating the 2009 budget for this program and opening another 20,000 places a year for low-skilled women workers who are currently unemployed or have begun a micro business. The program includes training, subsidies for food and transportation and funds for purchasing tools or materials.

During the signing ceremony, Bachelet said that Chile has resisted the crisis better than other countries thanks to the government decision to create reserves with the income from copper sales when the price of copper was high. “Now we are thinking beyond the crisis … the world will be more demanding … and Chileans, along with having protected their jobs, will be better prepared and skilled,” she said.

Unemployment reached 9.2 percent in March, according to official figures. The University of Chile has placed unemployment in the Metropolitan Region of Santiago at 12.8 percent.