14 company’s patrimony;31 (c) to establish an appropriate and rational distribution of the benefits among the investors and permanent workers of an industrial company, and (d) to promote permanent training and stimulate the creativity of the company’s workers.32 39. The Industrial Community was a system sui generis for industrial and labor promotion, applicable in “all industrial manufacturing companies of the reformed private sector that were governed by the General Industries Act, Decree-Law 18350, whatsoever their administrative regime.”33 Thus, companies that formed part of the said reformed private sector were obliged to create an Industrial Community. 40. Under this concept, the workers participated in company ownership, management and profits. The Industrial Community was administered and managed by the Community’s General Assembly and Council. The General Assembly was the highest authority of the Community and it was composed of all the workers.34 41. Meanwhile, the Community Council was the executive body of the Industrial Community.35 Among other functions, it was responsible for administering its patrimony, executing the decisions of the General Assembly and ensuring compliance with the Community’s Statute; advising the workers’ representatives on the company’s board; ruling on matters submitted to it by the workers, after consulting the General Assembly if necessary, and convening the General Assembly. The members of the Community Council could not perform or postulate their candidacy for a labor union position of any kind during their term of office.36 42. The workers participated in company management by appointing their representatives to the company’s Board, which was composed of the latter together with the directors appointed by the company’s shareholders. The directors who represented the workers were elected for one year and could be re-elected for an additional term. The directors who represented the workers had the same responsibilities and the same rights as the other company directors. 37 The law established that, every year, the industrial company would deduct 15% of its net income, tax-free, to constitute the patrimony of its workers and to provide resources for the Industrial Community until this attained a sum equivalent to 50% of the company’s social capital. “Article 38. The industrial company shall deduct 15% per year of its net income, tax-free, to constitute the patrimony of its workers and to provide resources to the Industrial Community as follows: (a) 13.5% of the net income to constitute and to increase the patrimony of the workers pursuant to the investment options set forth in Article 40 of this Act, until this attains a sum equivalent to 50% of the company’s social capital. The provisions of this paragraph shall be complied with pursuant to the regulatory provisions corresponding to each investment option; (b) 1.5% of the net income to constitute and to reinforce the patrimony of the Industrial Community, which shall be delivered within 30 days of the presentation of the annual balance sheet to the tax authorities. Article 39. When the amount of the Workers Patrimonial Participation Account, the composition of which is established in the following article, attains a sum equivalent to 50% of the company’s social capital, except in the case of Article 53, only 1.5% of the net income referred to in paragraph (b) of the preceding article shall be deducted. When there is an increase in the social capital not included in the following paragraph or when, due to redemption of the different values that constitute the Workers Patrimonial Participation Account, this amounts to less than 50% of the social capital, the company shall again deduct part of or the whole percentage referred to in paragraph (a) of Article 38 until the amount in this account again attains a sum equivalent to 50% of the social capital. When the social capital increases owing to revaluation of the patrimony or capitalization of reserves, the company shall issue Workers Shares for a sum proportionate to the degree of ownership that the workers possess in relation to the company’s patrimony at the time of the increase in capital, distributing these shares among the workers in the appropriate proportion.” 31 32 Article 3 of the Decree-Law in force at the time of the facts. 33 Article 2 of the Decree-Law in force at the time of the facts. 34 Article 20 of the Decree-Law in force at the time of the facts. 35 Article 29 of the Decree-Law in force at the time of the facts. 36 Article 33 of the Decree-Law in force at the time of the facts. 37 Article 67 of the Decree-Law in force at the time of the facts.