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Sickness Insurance (Industry) Convention, 1927 (No. 24) - Chile (Ratification: 1931)

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Observation (CEACR) - adopted 2023, published 112nd ILC session (2024)

Previous comment

In order to provide a comprehensive view of the issues relating to the application of the ratified Conventions on social security, the Committee considers it appropriate to examine Conventions Nos 24 (sickness insurance, industry) and 25 (sickness insurance, agriculture) together in a single comment.

Article 7(1) of the Conventions. Contribution to the establishment of the sickness insurance fund. The Committee notes the information provided by the Government in its report with regard to the requirement for employers to pay monthly contributions for their workers, under the terms of Act No. 16744 of 1968, establishing provisions respecting employment injury and occupational diseases. The Committee also notes the presentation of a proposal to reform the pensions system which is currently before Parliament and includes the establishment of a mixed system to replace the scheme created by Legislative Decree No. 3500 of 1980, for which the contributions envisaged are paid by the employer. The Committee once again recalls the importance of complying with the basic principle set out in Article 7(1) of the Conventions, in accordance with which the insured persons and their employers shall share in providing the financial resources of the sickness insurance system. In this context, the Committee trusts that the Government will take the opportunity of the framework of the current reform of the pensions system, in consultation with the social partners, to give full effect to the principle set out in these Articles of the Conventions, and that will provide information on this subject.

The Committee notes that, according to the Government, progress in the examination and subsequent implementation of the new mixed system of pensions could open the possibility of envisaging progress in the ratification of new international instruments in the field of social security. In this context, the Committee recalls that the ILO Governing Body, at its 343rd Session (November 2021), upon the recommendation of the Tripartite Working Group of the Standards Review Mechanism, confirmed the classification of Conventions Nos 24 and 25 as outdated and has included an item for their derogation or withdrawal on the agenda of the 118th Session of the International Labour Conference (2030). The Governing Body requested the Office to take follow-up measures to encourage actively the ratification of Conventions Nos 102 (Parts II and III) and 130, the most up-to-date instruments on medical care and cash sickness benefits. The Committee therefore encourages the Government to give effect to the decision of the Governing Body adopted at its 334th Session (November 2021) approving the recommendations of the Tripartite Working Group of the Standards Review Mechanism and to envisage the ratification of the most up-to-date instruments in this field.

Observation (CEACR) - adopted 2022, published 111st ILC session (2023)

The Committee notes that the Government’s report has not been received. It is therefore bound to repeat its previous comments.

Repetition
In order to provide a comprehensive view of the issues relating to the application of the ratified Conventions on social security, the Committee considers it appropriate to examine Conventions Nos 24 (sickness insurance, industry) and 25 (sickness insurance, agriculture) together.
Article 7(1) of the Conventions. Contribution to the establishment of the sickness insurance fund. With regard to its previous comments, the Committee notes from the Government’s report that, in accordance with sections 158 and 184 and following. of Legislative Decree No. 1 of 2006, the public health system and the private health scheme are financed with a 7 per cent contribution from workers’ pay or income, besides additional contributions by workers in the private scheme. The Committee notes that the State contributes to both schemes in certain circumstances. One of the circumstances in which the State shall contribute is established by Act No. 20850 of 2015, which envisages a financial protection system for high-cost diagnoses and treatment. Another circumstance is provided for by Act No. 21010 of 2017, which has created a fund to finance the Insurance to Support Children (SANNA), which benefits working parents of children under the ages of 15 or 18 years with serious health conditions. In addition, the Committee notes that the SANNA also receives the monthly contributions paid by the employer or the self-employed worker, the amount of which is 0.03 per cent of taxable income. While noting the employers’ contribution to the establishment of the sickness insurance fund in respect of compensation to support children with serious health conditions, the Committee observes that the sickness insurance, which includes medical care and sickness benefits, is mainly financed by insured persons, with the State’s participation in certain circumstances.In this regard, the Committee recalls the importance of fulfilling the basic principle provided for in Article 7(1) of the Conventions, under which workers and employers shall share in providing the financial resources of the sickness insurance fund. The Committee requests the Government, in consultation with the social partners, to ensure the full application of the principle provided for in these Articles of the Conventions and to provide information in this respect.
The Committee has been informed that, based on the recommendations of the Standards Review Mechanism Tripartite Working Group (SRM tripartite working group), the Governing Body decided that member States for which Conventions Nos 24 and 25 are in force should be encouraged to ratify the more recent Medical Care and Sickness Benefits Convention, 1969 (No. 130), or the Social Security (Minimum Standards) Convention, 1952 (No. 102), accepting Parts II and III (see GB.328/LILS/2/1). Conventions Nos 130 and 102 reflect the more modern approach to medical care and sickness benefits.The Committee therefore encourages the Government to follow up the Governing Body decision at its 328th Session (October–November 2016) approving the recommendations of the SRM tripartite working group and to consider ratifying Convention No. 130 or No. 102 (Parts II and III), as the most up-to-date instruments in this subject area. The Committee reminds the Government of the possibility to avail itself of the technical assistance of the Office in this regard.

The Committee hopes that the Government will make every effort to take the necessary action in the near future.

Observation (CEACR) - adopted 2019, published 109th ILC session (2021)

Article 7(1) of the Conventions. Contribution to the establishment of the sickness insurance fund. With regard to its previous comments, the Committee notes from the Government’s report that, in accordance with sections 158 and 184 and following. of Legislative Decree No. 1 of 2006, the public health system and the private health scheme are financed with a 7 per cent contribution from workers’ pay or income, besides additional contributions by workers in the private scheme. The Committee notes that the State contributes to both schemes in certain circumstances. One of the circumstances in which the State shall contribute is established by Act No. 20850 of 2015, which envisages a financial protection system for high cost diagnoses and treatment. Another circumstance is provided for by Act No. 21010 of 2017, which has created a fund to finance the Insurance to Support Children (SANNA), which benefits working parents of children under the ages of 15 or 18 years with serious health conditions. In addition, the Committee notes that the SANNA also receives the monthly contributions paid by the employer or the self-employed worker, the amount of which is 0.03 per cent of taxable income. While noting the employers’ contribution to the establishment of the sickness insurance fund in respect of compensation to support children with serious health conditions, the Committee observes that the sickness insurance, which includes medical care and sickness benefits, is mainly financed by insured persons, with the State’s participation in certain circumstances. In this regard, the Committee recalls the importance of fulfilling the basic principle provided for in Article 7(1) of the Conventions, under which workers and employers shall share in providing the financial resources of the sickness insurance fund. The Committee requests the Government, in consultation with the social partners, to ensure the full application of the principle provided for in these Articles of the Conventions and to provide information in this respect.

The Committee has been informed that, based on the recommendations of the Standards Review Mechanism Tripartite Working Group (SRM tripartite working group), the Governing Body decided that member States for which Conventions Nos 24 and 25 are in force should be encouraged to ratify the more recent Medical Care and Sickness Benefits Convention, 1969 (No. 130), or the Social Security (Minimum Standards) Convention, 1952 (No. 102), accepting Parts II and III (see GB.328/LILS/2/1). Conventions Nos 130 and 102 reflect the more modern approach to medical care and sickness benefits. The Committee therefore encourages the Government to follow up the Governing Body decision at its 328th Session (October–November 2016) approving the recommendations of the SRM tripartite working group and to consider ratifying Convention No. 130 or No. 102 (Parts II and III), as the most up-to-date instruments in this subject area. The Committee reminds the Government of the possibility to avail itself of the technical assistance of the Office in this regard.

Observation (CEACR) - adopted 2012, published 102nd ILC session (2013)

Article 7(1) of the Convention. Continuous failure to apply core provision of the Convention. For many years, the Committee has been drawing the Government’s attention to the fact that the national legislation is not in compliance with a basic principle established by Convention No. 24, that workers and employers shall share in providing the financial resources of the sickness insurance scheme. In Chile, all social contributions, with the exception of those for the employment injury compensation scheme, have been payable by workers since the adoption of Legislative Decree No. 3501 of 1980.

While it acknowledges the extensive information supplied by the Government in its latest report regarding the financing and operation of the employment injury scheme financed exclusively by the employers, the Committee is bound to observe that employment injury issues are not addressed by the present Convention and are dealt with under the Employment Injury Benefits Convention, 1964 [Schedule I amended in 1980] (No. 121), also ratified by Chile. The Committee regrets that the report does not express any intention of seeking ways to finance the sickness insurance system through joint contributions of employers and insured persons so as to give effect, in national laws and regulations, to the requirements of Article 7(1). The Committee wishes to emphasize that failure to comply with the principle of the collective financing of social security in the health insurance branch, as in the pensions branch, makes the system socially unjust for workers and therefore incompatible with the objectives of international labour standards in relation to social security. The Committee asks the Government to reconsider the situation in consultation with the social partners and to indicate in its next report how it intends to give effect to its obligations under Article 7(1) of the Convention.

Observation (CEACR) - adopted 2009, published 99th ILC session (2010)

For many years, the Committee has been drawing the Government’s attention to the fact that the national legislation is not in compliance with a basic principle established by Convention No. 24 (Article 7, paragraph 1, of the Convention) and, in general, by international social security law, in accordance with which insured persons and their employers shall share in providing the financial resources of the sickness insurance scheme. In Chile, all social contributions, with the exception of those for the employment injury compensation scheme, have been payable by workers since the adoption of Legislative Decree No. 3501 of 1980.

In its report, the Government confines itself to reporting the adoption in 2005 of DFL No. 1, which is intended to codify the legal regime governing health protection by compiling the various applicable legislative texts. The Committee notes with regret that the Government does not express any intention of complying with its obligation to give effect, in national laws and regulations, to the requirements of Article 7, paragraph 1, of the Convention, under the terms of which the financial resources of the sickness insurance system shall be constituted through joint contributions of employers and insured persons. The Committee wishes to emphasize that failure to comply with the principle of the collective financing of social security in the health insurance branch, as in the pensions branch, makes the system socially unjust for workers and therefore incompatible with the objectives of international labour standards in relation to social security. The Committee hopes that the Government will be in a position to assess the consequences of this situation with the social partners and it requests it to keep the Committee duly informed of any measure adopted in this respect.

Observation (CEACR) - adopted 2001, published 90th ILC session (2002)

In reply to the Committee’s previous comments, the Government indicates that the obligation to subscribe to the social security scheme is not of a contractual nature - it does not stem from the wish of the parties - but is based in law. Since the adoption of Legislative Decree No. 3501 of 1980, all social insurance payments, except those of the occupational injury compensation scheme, are paid by the worker. Previously, a large percentage of these contributions was paid by the employer and/or the State. Gross salaries have been increased in order to compensate for the worker’s obligation to pay contributions in their entirety. The Government therefore considers that by increasing wages the employers are continuing to finance contributions and the worker’s level of income is thus not affected.

The Committee notes this information. It notes with regret that the situation remains unchanged. The Committee has already indicated that the salary increase to which the Government refers could not be considered as giving effect to Article 7, paragraph 1, of the Convention which stipulates that employers shall share directly in providing the financial resources of the sickness insurance system. The Committee hopes that the Government will be able to re-examine this question and asks it to communicate in its next report information on any progress made in this regard.

Observation (CEACR) - adopted 1995, published 83rd ILC session (1996)

In its previous comments, the Committee indicated that to give effect to Article 7, paragraph 1, of the Convention, measures would have to be adopted to ensure that employers contributed directly to the establishment of the Sickness Insurance Fund for their employees. In its report for the period ending 30 June 1994, the Government refers again to certain legislative texts in force, particularly Legislative Decree No. 3501 of 1980, which establishes a new structure for payments providing an increase of cash remuneration for employees so that the employer's contribution to financing the insurance system is included in the increased salary. The Committee has already noted that the nature of this salary increase does not comply strictly with the requirement that the employers must contribute, in accordance with the provision of the Convention, in establishing the Sickness Insurance Fund. In these circumstances, the Committee can only request the Government again to adopt measures to ensure full application of this provision of the Convention.

Observation (CEACR) - adopted 1993, published 80th ILC session (1993)

The Committee notes the information supplied by the Government in its report, and the statistical information on compulsory sickness insurance.

Article 7, paragraph 1, of the Convention. In reply to the Committee's previous comments on this provision of the Convention, which requires employers to share in providing the financial resources of the sickness insurance scheme, the Government recalls that the change provided for in Legislative Decree No. 3501 of 1980, whereby insurance contributions are paid by the workers, is merely a change in the manner of payment of the contribution, as the cost is still borne by the employer in view of the fact that the same instrument provides for an increase in the cash remuneration of the worker. In other words, the change does not mean a reduction in the amount of the worker's cash remuneration, as the above Legislative Decree provides for an increase in his cash remuneration. The Government therefore considers that there is no point in specifying who pays the contributions because, when wages are negotiated, the employer always takes account of the worker's gross wage and the worker, the net wage. Consequently, whether the contributions are borne by the worker or the employer, the net wage and the pension of the worker are not affected, neither is the amount borne by the employer. Only a change in the rate of contributions can affect these variables.

The Committee takes note of this information. It is bound, however, to stress that, in order to give full effect to this provision of the Convention, employers must share directly in providing the financial resources of the sickness insurance scheme for employees. The Committee therefore once again expresses the hope that the Government will take the necessary measures to give full effect to this provision of the Convention.

Observation (CEACR) - adopted 1992, published 79th ILC session (1992)

The Committee has taken note of the information supplied by the Government in its report and in particular of the statistical data on compulsory sickness insurance.

Article 7, paragraph 1, of the Convention. In response to the Committee's previous comments concerning this provision of the Convention, which requires employers to share in providing the financial resources of the sickness insurance system, the Government states that the health benefits scheme provided for in Act No. 18469 of 23 November 1985 is financed out of resources apportioned by the State through the National Health Fund and out of workers' compulsory contributions, notwithstanding the direct payments made pursuant to sections 28 and 29 of the Act in accordance with Legislative Decree No. 3501 of 1980. With regard to workers who voluntarily opt to leave the General Health Benefits Scheme instituted by Act No. 18469 and enter a Health and Welfare Institution (ISAPRE) on the terms now spelt out in Act No. 18933 of 1990, the Government adds that the financing of the health benefits which such institutions are under a duty to grant directly or indirectly comes from the contributions made by the members under their respective contracts. This occurs notwithstanding the financing provided by the State to ISAPRE through the Single Fund for Family and Unemployment Benefits. The Government considers, moreover, that although, in accordance with the new structure of contributions instituted by Legislative Decree No. 3501 of 1980, insurance contributions are paid by the workers, this does not mean that they suffer any reduction in the cash amount of their remuneration, since the same legal rule provides for an increase in their cash remuneration, which includes the employer's contribution.

The Committee takes note of this information. It also notes that, according to the Government's report, the contributions charged to the employer in accordance with the provisions of Legislative Decree No. 3501 of 1980 were waived with effect from May 1981. The Committee therefore takes the view that, to give full effect to this provision of the Convention, employers should share directly in providing the financial resources of the sickness insurance system in favour of the wage-earners. The Committee consequently hopes that the Government will adopt the necessary measures to give full effect to this provision of the Convention.

[The Government is asked to provide a detailed report for the period ending 30 June 1992.]

Observation (CEACR) - adopted 1990, published 77th ILC session (1990)

1. The Committee notes the information supplied by the Government in its report. In particular, it notes with interest the information concerning the application of Article 2 of the Convention, to the effect that in December 1988 the transitional emergency programmes known as the "Minimum Employment Programme" (PEM) and the "Employment Programme for Heads of Household" (POJH) were terminated. As a consequence, as of 1 January 1989, no one is registered under these transitional assistance programmes.

2. Article 7, paragraph 1. The Committee notes that the Government's reports contain no reply to its previous comments. It therefore once again requests the Government to indicate the provision whereby effect is given to this Article of the Convention, under which employers shall share in providing the financial resources of the sickness insurance fund.