Chile's Public-Employment Statute Returns to the Reform Agenda

Chile's Finance Minister Jorge Quiroz has announced a review of the administrative statute, the set of rules that governs the relationship between the state and its employees. The initiative has been well received in technical and policy circles, partly because similar attempts under the administrations of Gabriel Boric and Sebastián Piñera were started but never completed.

The government will convene a review commission and has named José Ignacio Llodrá — currently deputy head of rationalisation and public function at the Budget Directorate, Dipres — as its executive secretary. That seat gives the process a direct connection to the ministry responsible for public spending and staffing rules.

Two structural issues dominate the early debate. The first is the coexistence of permanent planta posts and temporary contrata contracts. Enrique Rajevic of Universidad Alberto Hurtado reports that contrata posts now represent about 58% of public employment, even though the original design set a 20% ceiling, while the career-based regime is around 22%. The second is the absence of a demanding performance evaluation system with real consequences.

The debate also extends to honorarios contracts — including what critics call “false honorarios” for people working under subordinate conditions — and to the Alta Dirección Pública, or ADP. María José Abud of Horizontal says half of ADP appointees are removed before the second year of each government, although the legal horizon for such posts can reach nine years.

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What Chile's Named Reformers Want Changed in the Civil Service

The Core Demand: One Hiring Regime Instead of Two

Juan Bravo, director of the Observatory of the Economic Context at Universidad Diego Portales, argues that reform should end the dualism between planta and contrata and create a single hiring regime combining flexibility with protection, including protection when the employment relationship ends. Ignacio Irarrázaval of the Catholic University's Public Policy Centre adds a practical reason: planta positions are defined by law, so a public service that needs to create or remove a division must go to Congress — and therefore tends to fill the gap with contrata posts.

The implication is that much of the state's workforce may be operating on a temporary legal basis even when the work itself is permanent. A unified regime would shift the debate from patching legal categories to deciding which protections and removal grounds should apply across public employment.

Performance Pay and the 99% PMG Problem

Abud notes that bonuses from the Management Improvement Programmes, or PMG, are received by 99% of public institutions. She proposes incorporating those bonuses into base salary and building a system that ranks officials so that ratings reflect genuine performance. Bravo makes the same point from a different angle: there is currently no demanding evaluation mechanism that rewards and punishes based on results.

The tension here is whether a future system would be a real differentiator or simply a repackaging of existing payments. The experts are asking for consequences, not just measurement, and that is what would make the reform politically sensitive.

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The Trust-Merit Tension in Senior Appointments

Rajevic says the ADP has become a confidence appointment rather than a career post: while an ADP role could last up to nine years, in practice the period observed averages three. Abud sees the same dynamic, and Felipe Melo, former national director of the Civil Service, argues that building a professional administration requires separating the space of political trust from the space of merit.

Abud has also proposed a unified digital National Public Employment Registry run by the Civil Service. That responds to a related problem: current figures on how many public employees the state has differ across Dipres, the Comptroller's Office, the Transparency Council and Subdere. The OECD's 2025 study pointed in the same direction, recommending a stronger Civil Service role in coordinating posts and enabling horizontal mobility.

What the Review Commission Could Change for Public Servants and Contractors

  • Contrata employees: the 58% share cited by Rajevic is the main target of a possible unified hiring regime. If the commission follows the Bravo/Irarrázaval argument, current contrata arrangements could be replaced by new contract terms — but only after congressional approval, and no draft has been published.
  • Honorarios workers: critics explicitly want to address “false honorarios” under subordinate working conditions. A formal proposal may clarify whether such service providers are converted into protected public employment positions.
  • ADP executives: reported average tenure of three years versus a nine-year legal horizon suggests the commission may seek to separate trust appointments from merit-based career roles. That could affect how long senior posts are held and on what grounds they end.
  • PMG beneficiaries: Abud's proposal would absorb PMG bonuses into base salary and rank officials. Since 99% of institutions currently receive PMG payments, compensation structures across the public sector could change if that recommendation advances.
  • Public service users: the promised performance evaluation system is designed to improve accountability, but neither a start date nor a legislative timetable has been announced.