Finiquito (settlement agreement)

In Chile, the finiquito is the document that formalizes the termination of an employment relationship and records the settlement of outstanding obligations between employer and employee, such as wages, pro-rated vacation and severance where applicable. To have full releasing effect, the finiquito must be in writing and signed by the employee and, under current rules, ratified before an authorized officer (a notary, a labor inspector or the union president). A properly granted and ratified finiquito releases the parties with respect to the specific matters it mentions, which is why careful drafting is key to avoiding later claims. The employee retains non-waivable rights that cannot be extinguished through this instrument.