The employment contract can be terminated for different reasons, among others, for a legal cause, for just cause or without just cause, by mutual agreement, by expiration of the agreed fixed term or by termination of the work or labor. Know some particularities about these causes and learn everything about the termination of the employment contract here!
What is an employment contract?
Articles 22 and 23 of the Substantive Labor Code define the employment contract. employment contract as that by which a natural person undertakes to render a personal service to another natural or juridical person, under the subordination of the latter and through the payment of a salary as consideration for the service.
Termination of employment contract for legal cause
The legal causes for the termination of an employment contract are those set forth in Article 61 of the Substantive Labor Code. Article 61 of the Substantive Labor Codenamely:
- Death of the worker.
- Mutual consent.
- Expiration of the agreed fixed term.
- Completion of the contracted work or labor.
- Liquidation or definitive closure of the company or establishment.
- Suspension of activities by the employer for more than 120 days.
- Executed sentence.
- Unilateral decision of the employer, either unjustified or alleging just cause.
Termination of employment contract for just cause
Labor legislation provides for just causes to terminate the employment contract, which correspond precisely to behaviors, situations or hypotheses that allow, upon their configuration, the termination of the employment relationship.
The article 62 of the Substantive Labor Code lists the just causes for which both the employer and the employee may terminate the contract.
Just causes for the employer to terminate an employment contract
The just causes established by law that may be used by the employer are regulated in paragraph A) of the aforementioned article 62 and constitute those serious faults that, if they occur, entitle the employer to terminate the employment contract without the obligation to recognize any compensation.
These grounds are as follows:
- Having suffered deceit on the part of the worker, through the presentation of false certificates for admission or tending to obtain an undue advantage.
- Any act of violence, insult, ill-treatment or serious indiscipline committed by the employee at work against the employer, members of his family, management personnel or co-workers.
- Any serious act of violence, insult or ill-treatment committed by the employee outside the service against the employer, members of his family, or his representatives and partners, workshop managers, watchmen or guards.
- Any material damage intentionally caused to buildings, works, machinery and raw materials, instruments and other objects related to the work, and any gross negligence that endangers the safety of persons or things.
- Any immoral or criminal act that the worker commits in the workshop, establishment or place of work or in the performance of his duties.
- Any serious violation of the obligations or special prohibitions incumbent upon the employee in accordance with Articles 58 and 60 of the Substantive Labor Code.
- The preventive detention of the employee for more than thirty days, unless subsequently acquitted; or the correctional arrest exceeding eight days, or even for a shorter period, when the cause of the sanction is sufficient by itself to justify the termination of the contract.
- That the employee reveals technical or commercial secrets or discloses matters of a reserved nature, to the detriment of the company.
- Deficient work performance in relation to the worker's capacity and to the average performance in similar jobs, when it is not corrected within a reasonable period of time despite the employer's request.
- The systematic non-performance, without valid reasons, by the employee, of conventional or legal obligations.
- Any vice of the worker that disturbs the discipline of the establishment.
- The systematic reluctance of the worker to accept the preventive, prophylactic or curative measures prescribed by the employer's doctor or by the authorities to avoid illnesses or accidents.
- The worker's inability to perform the work entrusted to him/her.
- The recognition of the employee's retirement or disability pension while in the service of the company.
- The contagious or chronic illness of the worker, which is not of an occupational nature, as well as any other illness or injury that incapacitates him/her for work, the cure of which has not been possible for 180 days. In this case, the dismissal for this cause cannot be made until the expiration of such period and when there is a previous authorization by the Ministry of Labor, and does not exempt the employer from the legal and conventional benefits and indemnities derived from the disease.
Just causes for an employee to terminate an employment contract
A resignation is a voluntary and spontaneous manifestation by the employee to terminate the employment relationship, in principle, for personal reasons; however, the resignation may be motivated when the employee attributes the reasons to conduct on the part of the employer, specifically, the alleged failure to comply with his obligations.
These causes are found in paragraph B) of the aforementioned article 62 of the Substantive Labor Code, namely:
- Having been deceived by the employer regarding the working conditions.
- Any act of violence, ill-treatment or serious threats inflicted by the employer against the employee or members of his family, in or outside the service, or inflicted within the service by the employer's relatives, representatives or dependents with the employer's consent or tolerance.
- Any act by the employer or its representatives that induces the employee to commit an unlawful act or an act contrary to his or her political or religious convictions.
- All circumstances that the employee could not foresee when entering into the contract, and that endanger his safety or health, and that the employer does not agree to modify.
- Any injury caused maliciously by the employer to the employee in the provision of the service.
- Systematic non-compliance without valid reasons by the employer of its contractual or legal obligations.
- The employer's demand, without valid reasons, for the rendering of a different service, or in different places from the one for which he/she was hired.
- Any serious violation of the obligations or prohibitions incumbent upon the employer, in accordance with articles 57 and 59 of the Substantive Labor Code, or any serious misconduct qualified as such in collective bargaining agreements or conventions, arbitration rulings, individual contracts or regulations.
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Termination of employment contract without just cause
Notwithstanding the foregoing, the employment contract may also be terminated by unilateral decision of the employer even if there is no just cause. Thus, if the employer does not wish to continue with this contractual relationship, it may terminate it without the need to justify the decision.
Now, if the employer decides to dismiss an employee without just cause, the to dismiss an employee without just causeIf the employer decides to dismiss an employee without just cause, he/she must pay him/her a severance payment as provided by law (Article 64 of the Substantive Labor Code, which is calculated depending on the type of employment contract, seniority and salary earned by the employee).
However, it should be noted that, notwithstanding this legal power of the employer, the law establishes certain cases in which it is not permitted to dismiss an employee without just cause, even with the payment of the aforementioned indemnity. Thus, these are the following special protections:
- Enhanced job stability due to maternity leave
- Reinforced labor stability due to union privilege
- Enhanced job stability for disabled workers
- Reinforced labor stability due to pre-pensioner status
- Enhanced job stability for mothers or fathers who are heads of household
- Circumstantial jurisdiction
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