April 1, 2008 / 8:55 PM / 11 years ago

Codelco in legal spat with Chile labor authority

SANTIAGO, April 1 (Reuters) - Chile’s Supreme Court began reviewing pleas from state-owned Codelco and private miners on Tuesday to overturn a government mandate to hire thousands of subcontracted workers.

At issue is last year’s ruling requiring Chile’s largest miners to directly hire subcontracted workers, a move contested by Codelco, the world’s leading copper producer, and global mining giant BHP Billiton (BHP.AX) BLT.L, among others.

In cases that were tried on a site-by-site basis in different courts, Codelco won seven of eight appeals and is now appealing the only unfavorable decision it received, issued by the Appeals Court of Copiapo, a northern mining town.

On Tuesday lawyers representing Codelco, Chile’s labor authority, and workers presented their cases before the Supreme Court. Private miners will follow next week.

“The labor authority has made a legal judgment ... that it is not qualified to make,” Carlos Figueroa, legal council for Codelco, told reporters.

The labor mandate would force Codelco to hire nearly 5,000 subcontracted workers.

“What the labor authority has done is to verify a violation and require that it be brought into compliance within a legal time frame, without assuming the attributions Codelco is alleging,” said Labor Authority attorney Monica Vergara.

STRIKES THREATENED

The Confederation of Copper Workers (CTC), a union of subcontracted workers, threatened to strike across all Codelco divisions, after complaining that agreements reached last year have not been respected, including the application of the subcontracting law.

“The party that acted first against this law was a government-owned company,” said Cristian Cuevas, CTC president, referring to Codelco.

The subcontracted workers say they do not enjoy the same pay and benefits as permanently contracted employees of the miners, even though in many cases they participate in the same work activities.

“If this decision is unfavorable, we believe it will be regrettable not only for private mining workers, but for thousands of workers in different productive areas in our country,” Cuevas added.

Subcontracted workers are also widely used in other sectors, including Chile’s giant retailers.

In June and July of last year, subcontract workers took part in sometimes violent strikes at Codelco, until they achieved salary and work condition concessions.

Chile produces about one-third of the world’s copper. The red metal accounts for more than half of Chile’s exports and has boosted Chile’s trade surplus to record highs. (With reporting by Manuel Farias; writing by Lisa Yulkowski; editing by Simon Gardner and Matthew Lewis)

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