Termination of Employment Contract: A Comprehensive Guide
Termination of Employment Contract
Concepts
Termination of employment involves canceling the employment contract, either voluntarily by the employee or involuntarily by the employer.
Termination by the Employee
Resignation
The employee can terminate the employment contract without further explanation by providing a written notice of fifteen days.
Abandonment
Abandonment occurs when the employee fails to report to the workplace indefinitely without warning.
If an employer breaches contractual obligations or if the worker experiences discrimination, they may request a judicial indemnification of 45 days’ wages per year worked.
Termination by the Employer
Constructive Dismissal
Constructive dismissal occurs when the employer creates a hostile work environment that forces the employee to resign. This effectively ends the employment relationship.
Dismissal for Disciplinary Reasons
In this case, no indemnification is provided.
Causes:
- Repeated and unjustified tardiness
- Disobedience at work
- Offenses
- Voluntary decrease in work performance
- Habitual drunkenness or substance abuse in the workplace, provided that it negatively influences work
Procedures:
The employer notifies the employee in writing of the cause and date of dismissal. From that time, the employee has twenty calendar days to contest the dismissal. The judge will rule on the dismissal’s appropriateness. The employer can choose to reinstate the employee or provide severance pay (33 or 45 days’ wages).
Objective Redundancy
In this case, the dismissal and compensation are provided on the same day.
Causes:
- Ineptitude for the job after being hired
- Lack of worker adaptation to technical changes in the company
- Absences from work, even if justified, that are intermittent and reach 20% of the working day or 25% in 4 months
- Situations where the employer is obligated, for technical reasons, to reduce staff. In this case, a collective dismissal procedure is followed.
A 30-day notice period is served to the worker, and they receive 20 days’ salary per year worked. If the employee disagrees, they can go to labor court. If the dismissal is deemed appropriate, the severance pay remains at 20 days, and the employment relationship ends. If deemed inappropriate, the severance pay may increase to 45 days, and the company may have to reinstate the employee.
Collective Dismissal
Collective dismissal occurs when the employer dismisses 10% or more of employees within a 2-month period due to economic reasons or production-related redundancies. This is also known as employment regulation.
Layoffs by Force Majeure
When unforeseen circumstances (force majeure) permanently affect the company, the employer can dismiss workers, providing 20 days’ wages per year worked.
Dismissal for Discrimination
Dismissal for discrimination based on sex, race, religion, ideology, or formal defects is illegal and subject to legal action.
Collective Agreements
A collective agreement is a written agreement between employers and workers to establish working conditions in a particular area or sector.
Areas of Application
- Territorial: firm-level, local, provincial, national
- Industrial: wood, metal, cement, chemical, retail, etc.
Parties Involved in the Negotiation
For enterprise agreements, negotiations involve the works committee or a delegated person and the employer. For agreements affecting multiple companies:
- Worker representation: Most representative trade unions and unions with at least 10% representation on company councils.
- Employer representation: Business associations representing at least 10% of the affected workers.
Elaboration of a Convention
- Proposal: Both employee and employer representatives can propose a convention.
- Negotiation: Upon receiving a proposal, the other party must form a negotiating committee within one month to discuss and negotiate the terms.
- Signing and Registration: Once agreed upon, the signed convention is submitted to the General Directorate of Labor (or provincial delegation) within 15 days.
- Publication: The convention is published in the official state, autonomous, or provincial gazette within 10 days of registration.
Content of the Convention
- Identification of parties
- Scope (industry, territorial, temporal)
- Procedures for employee opt-out
- Hardship clauses for companies facing sustainability risks
- Dispute resolution mechanisms
- Duration of the agreement
If a company faces difficulties meeting the terms of the convention, they can appeal for an exemption. If the convention doesn’t specify a duration, any party can terminate it by providing 1-2 months’ notice. A joint committee with representatives from both parties is formed to handle interpretation issues or disputes arising from the convention.