SANTIAGO – Chilean President Michelle Bachelet on Monday sent Congress a bill that seeks to balance labour relations by bolstering unions and workers' rights, prompting a quick backlash from business leaders and opposition lawmakers.

The labour reform, part of a battery of measures aimed at reducing Chile's gaping wealth gap, comes at a delicate time, as Chile is facing an economic slowdown and industry heads are reeling from recent sweeping tax changes.

Despite the cooling economy, Chile's labour market is in better shape than many feared.

"The new times demand a change of perspective on labour relations ... to talk without taboos and foster instruments that contribute to dialogue and the balance between workers and employers," Bachelet, a socialist, said during a bill-signing ceremony at the Moneda presidential palace.

"Because what's at stake here is a better work environment, which is a condition to improved productivity."

Some in the business community were quick to rebuke Bachelet's reform, saying it focused too much on empowering unions.

"We believe it doesn't go in the right direction in solving workers' problems. It only worries about giving more power and latitude to union leaders," said Andres Santa Cruz, the head of CPC, a business group.

Among other things, the labour changes look to widen the scope of collective contract negotiations, with guarantees that benefits and salaries are improved with new contracts, and to boost the bargaining power of striking workers by eliminating the use of replacement workers.

"We're proposing that the main instrument for collective negotiations for workers be unions," said Bachelet, adding that benefits negotiated by unions will be automatically extended to new members.

The reform also will allow workers to freely join or leave a union.

Collective contracts currently run for between 34 to 48 months and are used by many of the large companies operating in Chile, in particular in the country's vast mining industry.

"More than a labour reform, this seems like a union reform," said Patricio Melero, an opposition lawmaker.