Employee Contract Termination: Reasons, Requirements & Compensation

Posted on Mar 1, 2025 in Tourism

Termination by Employer’s Decision

When an employer decides to terminate an employment relationship, it’s often based on objective or disciplinary reasons. This situation is commonly referred to as redundancy.

Types of Dismissals

1. Disciplinary Dismissal

• Causes:
  • Repeated and unjustified absences or tardiness.
  • Disobedience or indiscipline in the workplace.
  • Verbal or physical insults towards the employer, colleagues, or their relatives.
  • Transgression of contractual good faith and abuse of trust.
  • Habitual decline or drug addiction affecting work performance.
  • Continuous decline in voluntary work performance.
  • Harassment based on racial or ethnic origin, religion, disability, age, or sexual orientation.
• Requirements:
  • Notification: The employee must be notified in writing, stating the reasons and the effective date.
  • Grounds: The employee’s breaches must be serious and responsible for the dismissal.
  • Justification: If no breach is proven, the employee must be reinstated or compensated with 45 days’ pay per year of service, up to a maximum of 42 monthly payments.
  • Null Dismissal: If the dismissal is due to discrimination or violation of fundamental rights, the employer must reinstate the employee and pay lost wages.

2. Dismissal for Objective Reasons

• Causes:
  • Lack of aptitude.
  • Inability of the employee to adapt.
  • Absence from work, even if justified, amounting to 20% of working days in two consecutive months, or 25% in four months within a 12-month period.
  • The need to eliminate jobs for economic, technical, organizational, or production reasons, affecting a number of employees lower than what constitutes a collective dismissal.
• Requirements:
  • Procedure: The employee must receive a written dismissal letter with 30 days’ notice and be offered compensation of 20 days’ pay per year of service, up to a maximum of 12 monthly payments.
  • Justification: The objective circumstances allowing the dismissal must be accredited.
  • Judicial Qualifications: Similar to disciplinary dismissal.
  • Inadmissible: The employee is readmitted, with compensation recalculated, minus what has already been delivered.
  • Null: Similar to disciplinary dismissal.

3. Collective Dismissal

• Cause: Based on economic, technical, organizational, or production reasons necessary to eliminate jobs, affecting:
  • The entire workforce.
  • More than 5 employees.
  • A number of workers within a 90-day period.

4. Dismissals by Force Majeure

• Cause: Due to an involuntary, unpredictable, or unavoidable event affecting the company and preventing the continuation of employment (e.g., fires, pests, floods).
• Procedure: Application for employment authorization by processing the case of employment regulation and simultaneous opening of a period of consultation with legal representatives of workers.
• Compensation: 20 days’ pay per year of service, with a limit of 12 monthly payments.

Other Causes of Contract Termination

Death, retirement, or permanent incapacity of the employer or employee generates the right to compensation of 30 days’ salary.

If the employee disagrees with the dismissal, they have 20 days to appeal the dismissal.

Remunerated Permits (Paid Leave)

Employees, with prior notice and justification, can be absent from work with the right to pay for the following reasons:

1. 15 days in case of marriage.
2. 2 days for the birth, death, injury, or serious illness of a child, hospitalization, or surgical intervention without requiring hospitalization of second-degree relatives. The deadline is 4 days if the employee must travel.
3. 1 day for moving habitual residence.
4. The time necessary for the fulfillment of an inescapable public and personal duty.
5. The time necessary to carry out trade union or personal representation activities.
6. The time necessary to perform prenatal tests and childbirth preparation.