Employment Contract Termination and Dismissal Procedures

Termination of the Employment Contract

The termination of an employment contract represents the end of the professional relationship between an employer and their employees. This process ensures that the obligations of both parties disappear permanently. It is important to note that while the suspension of work is temporary, extinction is a permanent state.

Causes for Contract Termination

The causes for the termination of a contract are typically determined by:

• The common will of both the employer and the employee.
• The will of the worker.
• The will of the company.
• Other external causes.
• Finiquito (Settlement).
• Extinction by mutual agreement of both parties.
• Completion of the specific work or service.

Extinction for Objective Reasons

This form of termination is triggered by circumstances beyond the control of the employee or the employer. These causes include:

• Ineptitude of the worker: This applies if the ineptitude is discovered after the placement of the worker. If it occurs during the trial period, the employer may not be required to respond.
• Lack of adaptation: This occurs if the employee is not suited to technical changes proposed by the company, provided those changes are reasonable. This applies within two months of the changes occurring. The contract may be suspended for up to 3 months if the company offers the worker a retraining course.
• Lack of attendance (Absenteeism): These are justified when they reach 20% of working days in 2 consecutive months or 4 discontinuous months. This does not include absences for legal strikes, accidents, maternity, or holidays.
• Insufficient budget: Economic reasons that necessitate the reduction of staff.

Formalizing an Objective Dismissal

To formalize a dismissal, a formal statement must be issued. This document should detail the compensation, the notice period, and the available license or resources for the employee.

Disputed Dismissal and Conciliation

When a dismissal is notified and the worker does not agree with the causes, they can attempt a conciliation agreement. This must be done within 20 working days before the SMAC (Service of Mediation, Arbitration, and Conciliation) of the autonomous region.

The SMAC Conciliation Process

The employment authority shall summon both parties to reach an agreement, noting the specific date and time. The conciliation process will end in one of the following ways:

• Failure to reach an agreement: The parties cannot find common ground.
• Compromise: After reaching an agreement, compensation is often set at more than 35 days' salary per year of service, granting the worker the right to collect unemployment benefits.
• Non-appearance: If one of the parties is not present, the case ends in a non-reporting status and is archived.

Legal Proceedings and Judgments

If conciliation does not happen, other forms of resolution include:

• Proceedings before the Social Court: These must be initiated within 20 working days from the time of dismissal; a worker is unable to sue once this period has passed.
• Judgment: A judge rules the dismissal as null, fair (given), or inappropriate (unfair).

Alleged Test Responses

1C, 2C, 3B, 4B, 5B, 6B, 7B, 8A, 9B, 10A.