This country-specific Q&A provides an overview to employment and labour law in Colombia.
It will cover termination of employment, procedures, protection for workers, compensation as well as insight and opinion on the most common difficulties employers face and any upcoming legal changes planned..
This Q&A is part of the global guide to Employment & Labour. For a full list of jurisdictional Q&As visit http://www.inhouselawyer.co.uk/index.php/practice-areas/employment-labour-law/
Does an employer need a reason in order to lawfully terminate an employment relationship? If so, what reasons are lawful in the jurisdiction?
In Colombia, in general, an employment agreement may be terminated unilaterally (except in case a special protection exists (e.g. maternity, sick leave, handicap employees, union representatives) with or without just cause (just causes are listed in the law by way of limitation) or by mutual consent.
Events of just cause of termination provided for in the law include the following:
- Deceit of the employee in regards to presenting false accreditations or certifications to obtain the job or to gain undue advantage for the position.
- Any act of violence, insults, mistreatment or severe indiscipline caused by the employee against its work, the employer, members of his family, managers or co-workers.
- Any severe act of violence, insults, mistreatment or severe indiscipline caused by the employee outside the place of work against the employer, members of his family, its representatives or business associates, shop managers, security guards or doorman.
- Any material damage caused intentionally to buildings, work, equipment, machines and raw materials, tools and other objects related to the job, and any gross negligence, which may put in danger the safety of people or objects.
- Any immoral or criminal act committed by the employee in the workshop, place of work, or anytime during service.
- Any serious violation of the obligations or especial prohibitions of the employee pursuant to articles 58 and 60 of the Labor Code, as well as any serious fault contained in a collective bargaining agreement or the like, arbitration award, individual contract, policy or procedure.
- Unless afterwards acquitted, an employee’s detention for more than thirty days, or the correctional arrest that exceeds eight days, or for a lesser period when the cause of the sanction is enough to justify the termination.
- Revealing technical or business secrets, or publishing reserved matters in detriment of the employer.
- A deficient performance of the work not corrected in a reasonable time since the employer requests a change, in relation to the employee’s capacities and with the average performance in analogous labours.
- Employee’s systematic non-performance of contractual or legal obligations, without valid reasons.
- Any of the employee’s addiction or bad habit that disturbs the discipline in the workplace.
- Systematic reluctance of the employee to accept the preventive or curative provisions, prescribed by the employers healthcare provider or by the health authorities to avoid illness or accidents.
- Employees’ ineptitude to perform the entrusted work.
- Recognition of retirement or disability pension to the worker while in service to the company, and
- Non-work related contagious or chronic illness of the employee, as any other illness or injury that incapacitates employee to perform its work for a period of more than one hundred and eighty days. The dismissal under this this event can only take place once the one hundred and eighty day term expires, and does not release the employer from paying any legal or contractual benefits and compensations derived from the illness.
If the employment agreement is terminated without just cause, the employee will be entitled to the payment of severance (indemnification) which is calculated in accordance with the seniority and the salary level.
Please note that before exercising a just cause, the employer has the obligation to allow the employee to exercise his/her right to defence with respect to the conducts that constitute the just cause or should give a notice of fifteen (15) working days before the termination date of the employment agreement (depending on the just cause).
What, if any, additional considerations apply if large numbers of dismissals (redundancies) are planned?
Colombian labor Law provides that in case an employer unilaterally and without just cause terminates the employment agreement of a given number of employees and in a specific period of time it will be incurring in collective termination or mass lay-off. Collective terminations without authorization from the Ministry of Labor (which is not easy to be obtained) have no effect, and therefore the employer would be liable for all salaries or benefits it might not have paid to the employees during the relevant period.
If the authorization from the Ministry of Labor is obtained, the employer may proceed to terminate the employment agreements by paying the corresponding severance (indemnification) for termination without just cause provided in the law.
In the event that the employees are terminated by mutual consent (instead of unilaterally by the employer) the employer will not need to request the authorization from the Ministry of Labor. In such case it is customary that the employers pay to the employees being terminated, a bonus at least equivalent to the value of the indemnification (to be attractive for the employees to agree on the termination by mutual consent).
What, if any, additional considerations apply if a worker’s employment is terminated in the context of a business sale?
A business sale does not extinguish, suspend or modify the existing employment contracts; thus, all the employees’ rights are transferred.
Notwithstanding the above, if in connection with a business sale the former or the new employer unilaterally terminates the employment agreements of some employees of the company, those employees will have the right to receive payment of severance (indemnification) and the employer will have to respect the legal provisions regarding protections against mass lay-off.
What, if any, is the minimum notice period to terminate employment?
According to Colombian labor law, the following termination notices have to be given by employers:
- In fixed term employment agreements agreed for a fixed period higher than 1 month, a termination notice has to be given by the employer at least thirty days before the expiration of the fixed term agreed.
- To apply some of the just causes of termination provided in the law (i.e. retirement pension), the employer has to give 15 days’ prior notice of the termination to the employee.
Can an employer require a worker to be on garden leave, that is, continue to employ and pay a worker during his notice period but require him to stay at home and not participate in any work?
Yes, in general it will be possible, however instead of a gardening leave it will be advisable to terminate the agreement immediately and pay the severance or propose to the employee a termination by mutual consent and pay a bonus.
Does an employer have to follow a prescribed procedure to achieve an effective termination of the employment relationship? If yes, what are the requirements of that procedure or procedures?
A special procedure for termination (to guarantee the right of defence) applies only in case the termination is based on a just cause. The requirements of the procedure are the following:
- The employer must collect the evidence before initiating the procedure.
- The employer must send to the employee a formal communication of the initiation of the process and it will summon the employee to a meeting, which could take place within the following days after the summoning, to hear the explanations of the employee.
- During the meeting, the employer will have to present the charges to the employee, indicating the conducts or presumed violations and its qualifications. Additionally, during the meeting the employer will present to the employee the evidence supporting the conducts/violations in which the employee has incurred and will give to the employee the opportunity to defend and to present evidence in his/her favor.
- The employer shall evaluate the information and proceed to communicate to the employee, its decision to terminate the employment agreement alleging the specific just cause, in which case the employee will not be entitled to receive the indemnification (severance) provided in the law.
- Depending on the provisions included in the internal work code of the employer, the employee may appeal the decision before an officer of the employer and/or challenge the decision before the Labor Courts.
In addition, according to the law and the jurisprudence, some of the just causes have a previous procedure that have to be followed (i.e. low performance requires at least two notices requesting the employee to improve performance.
If the employer does not follow any prescribed procedure as described in response to question 7, what are the consequences for the employer?
If the employer does not follow the corresponding procedures, it will be considered that the employment agreement was terminated without just cause and the employee will be entitled to the payment of severance.
How, if at all, are collective agreements relevant to the termination of employment?
In some cases collective bargaining agreements refer to stability on employment (imposing additional procedures or burdens for the employer to exercise termination of unionized employees) and also may provide the granting of extra-legal benefits (i.e. golden parachutes) in case of termination of the employees.
Additionally, the employer has to consider that some of the unionized employees (i.e. union board members) have a special protection not to be dismissal without just cause and without a prior judicial procedure.
Does the employer have to obtain the permission of or inform a third party (e.g local labour authorities or court) before being able to validly terminate the employment relationship? If yes, what are the sanctions for breach of this requirement?
Except in case of mass lay-off, in principle, employers do not require to inform or obtain permission from any authority or third party to unilaterally terminate employment agreements. However, there are some employees that in application of Colombian Law and the Constitutional Court ruling have a special protection not to be dismissed without the existence of a just cause and without the prior authorization from the Ministry of Labor or a judicial decision, such as: pregnant employees, employees on maternity leave, employees who are couple of pregnant women who economically depend on them, employees on sick leave, handicap employees, employees being less than 3 years away to comply with the age requirement to obtain retirement pension, union board members, etc.
In case an employer terminates the employment agreement of an employee who is under a special protection (mentioned above), they could claim their reintegration to the job and the payment of the labor rights caused between the termination and the reintegration and in some cases, the payment of special indemnifications.
What protection from discrimination or harassment are workers entitled to in respect of the termination of employment?
The employees are protected against discrimination. The employees may not be discriminated against due to their age, sex, religion, race, political affiliation, economic condition or health (disability or illness).
In case the employment agreement is terminated under discrimination circumstances, the employee will be able to claim the reintegration to the job and the payment of the labor rights caused between the termination and the reintegration and in some cases, the payment of special indemnifications.
What are the possible consequences for the employer if a worker has suffered discrimination or harassment in the context of termination of employment?
The employers may be forced to reintegrate the employee to the job and the payment of the labor rights caused between the termination and the reintegration and in some cases, the payment of special indemnifications. Eventually, the employer may also be subject to imposition of fines buy the Ministry of Labor.
Are any categories of worker (for example, fixed-term workers or workers on family leave) entitled to specific protection, other than protection from discrimination or harassment, on the termination of employment?
See answer to question 10.
Are workers who have made disclosures in the public interest (whistleblowers) entitled to any special protection from termination of employment?
No. The law does not provide a special protection to such employees not to be dismissed.
What financial compensation is required under law or custom to terminate the employment relationship? How do employers usually decide how much compensation is to be paid?
According to Colombian Law, Employees being terminated without just cause are entitled to receive the payment of severance (indemnification) which amount is calculated as follows:
a. For agreements entered into for an indefinite term, indemnification rules apply as follows:
- For employees with a salary equivalent to less than ten (10) minimum legal wages: Thirty days of salary for the first year of services plus twenty additional days of salary for each of the years following the first year and proportionally for each fraction of year.
- For employees with a salary equivalent to ten minimum legal wages or more: Twenty days of salary for the first year of services plus fifteen additional days of salary for each of the years following the first year and proportionally for each fraction of year.
- Employees who had ten or more years of continuous service on December 27, 2002 have the right to an indemnification equivalent to forty five days of salary for the first year of service and forty additional days of salary for each year following the first year and proportionally for each fraction of year.
b. For contracts entered into for a fixed term or for the duration of a specific job, the indemnification is equivalent to the salaries corresponding to the remaining period of the contract, but in no event less than fifteen days’ salary.
Additionally, upon termination the employer must pay to the employee all the labor rights (salaries, severance pay – auxilio de cesantías, interest on severance pay, semester bonus, vacation, extra-legal benefits agreed, among others) caused until the termination date.
Can an employer reach agreement with a worker on the termination of employment in which the employee validly waives his rights in return for a payment? If yes, describe any limitations that apply.
Employers may reach settlement agreements with their employees to terminate employment agreements and obtain release form employees.
Under these agreements, the employees may waive their uncertain and disputable rights and the employer should monetarily compensate such waiver for the settlement agreement to have the effect of res judicata.
Is it possible to restrict a worker from working for competitors after the termination of employment? If yes, describe any relevant requirements or limitations.
No, it is not possible.
Can an employer require a worker to keep information relating to the employer confidential after the termination of employment?
Yes, it is possible to execute a clause/document through which the employees agree to keep confidential the information after the termination of employment.
Are employers obliged to provide references to new employers if these are requested?
Employers are not obliged to provide references of ex-employees to new employers. The employers are only obliged to issue a labor certificate (whenever the employees request it or at the termination of the employment agreement) including information about time of services, the type of services rendered by the employee and the salary.
What, in your opinion, are the most common difficulties faced by employers in your jurisdiction when terminating employment and how do you consider employers can mitigate these?
The most common difficulties when terminating an employment agreement are those cases in which the employees have a special protection not be dismissed (e.g. pregnant employees, employees on maternity leave, employees who are couple of pregnant women who economically depend on them, employees on sick leave, handicap employees, employees being less than 3 years away to comply with the age requirement to obtain retirement pension union board members, etc.).
These difficulties may only be solved in case the employee voluntarily an duly informed of his/her protection resigns to the job in which case the employer may still pay to the employee a voluntary termination bonus.
Are any legal changes planned that are likely to impact on the way employers in your jurisdiction approach termination of employment? If so, please describe what impact you foresee from such changes and how employers can prepare for them?
It is foreseen the increasing of legal provisions and court ruling creating protection to additional group of employees not to be dismissed (i.e. single parents in the private sector, etc.) without just cause and without the authorization of the Ministry of Labor, which will make more difficult for the employers to terminate the employment agreements with or without just cause.
Considering the above, the employers need to be prepared to either open spaces of negotiation with those employees to agree on termination by mutual consent with payment of voluntary termination bonuses or adjust to such situations.