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Contract Termination

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Work contract termination occurs when all obligations acquired by the parties, employee and employer, cease completely.

Direct causes of contract termination:

•	Expiration of the agreed period - In fixed duration contracts with an agreed upon termination date, it causes the contract's termination.

•	Conclusion of the job or service hired - When the job or service hired is concluded and no other formality is required.

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Complete employee incapacity - Employee incapacity because of illness or accident, not work-related, for more than 180 days, which prevents the employee from performing his/her usual job or another similar one, causes contract termination. It is just cause whenever it is impossible to provide the service, that is, whenever the employee is incapacitated for work.

•	Employee death - The employment relationship becomes extinct as, since the activity involving the person is the fundamental element of the contract, the person's death automatically terminates it.

When this happens, the following obligations are generated for the employer:

•	Communication to the social security agency and the family compensation fund.

•	Payment of burial charges.

•	Payment of remaining salaries and social contributions to the heirs.

•	Transfer of the pension rights.

The contract settlement payments in this case are the same as for normal settlements, with the difference that the payment must be done to a beneficiary. It is important that the system control to whom the settlement has been paid.

In Colombia, pensions to beneficiaries may be paid by the companies themselves. Check the Pension Calculation routine.

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Dissolution or definitive closing of the company - In cases of dissolution, bankruptcy of the company or establishment, or suspension of activities for more than 120 days, the employer must request the corresponding permission from the Social Protection Ministry and inform its employees of such in writing. The Ministry has a deadline of two months to analyze the case. After the authorization, the employers in question must pay the legal compensation regarding unjustified dismissal. If the company or employer has net assets of less than 1000 times the minimum wage, the compensation amount is 50% of the one mentioned above.

Causes derived from employee's will:

•	Resignation - It is the free and spontaneous expression of the employee's intent of ending the employment relationship and thus terminate the employment contract.

In the past, the employee was forced to pay the employer an compensation equivalent of 30 days, when not giving prior notice, which was deducted from the amount the employee had to receive. After Decree 789 from 2002, this changed and the employee no longer has to pay such compensation.

•	Indirect dismissal or dismissal request, by fault of the employer - The employee may claim indirect dismissal or request dismissal and claim compensation payment for unilateral termination without just cause when believing to have been harmed or threatened by the employer.

•	Not returning to work once the causes of contract suspension have ceased - If the employee does not return to work once the causes of contract suspension have ceased, the contract is terminated.

Causes derived form both parties' will:

•	Mutual agreement - When there are circumstances which make the continuation of the employment relationship inconvenient for both parties and they are able to reach an agreement by terminating the contract.

Causes derived from the employer's will:

•	Dismissal with just cause, for employee non-compliance.

The following may be considered just causes:

1.	The employer has been misguided by the employee through the use of false certificates at the time of admission, or the later has received recognition by use of inappropriate means.

2.	Any act of violence, injury, mistreatment or serious insubordination by the employee while at work, against the employer, the employer's family, superiors or work colleagues.

3.	Any act of violence, injury, mistreatment, or serious insubordination by the employee while not at work, against the employer, the employer's family, the employer's representatives, partners, superiors, watchers or guards.

4.	Material damage intentionally caused to buildings, machinery and raw material, tools and other work-related objects, as well as serious negligence which put people or objects at risk.

5.	Any immoral or illegal act committed by the employee while at work or in the workplace.

6.	Serious violation of special obligations and prohibitions by the employee or any serious fault which is described as such in collective agreements and conventions, arbitrary decisions, individual contracts or regulations.

7.	Preventive arrest of the employee for more than 30 dais, unless released afterward, or incarceration in correctional institutions for more than 8 days or less, if the cause for such is enough to justify contract termination (in disuse).

8.	The employee reveals technical or commercial secrets or reserved matters, causing loss to the company.

9.	Inadequate work performance in relation to the employee's abilities or average performance, provided the employer has allowed a reasonable period of time for correction from the time the employee was notified (which must be attested by appropriate reports).

10.	Systematic failure, without valid justification by the employee, to perform the conventional and legal obligations.

11.	Any employee vice which disturbs the discipline of the establishment.

12.	Systematic resistance by the employee in accepting preventive or treatment measures, prescribed by the employer's appointed doctor or by the authorities, to prevent disease or accidents.

13.	Lack of ability to perform the job by the employee.

14.	The acceptance of retirement or disability pension while in the employ of the company.

15.

Employee's chronic contagious disease, not work-related, as well as any other disease or injury which incapacitates the employee for work and which cure is not possible in 180 days. Dismissal for this reason cannot occurs before the expiration of such period and does not release the employer form the obligation of paying the legal and conventional contributions and indemnities derived from the disease.

The employer who chooses to dismiss an employee with just cause must be precise in the communication to the employee of the facts and circumstances that provoked such decision, indicating its time, place and conditions. For causes 9 to 5, the employer must tell the employee 15 before the date when the employment relationship is to be terminated.

•	Dismissal without just cause, with compensation - The employee has the right to receive the compensations according to law.

The descriptions of such are in the settlement calculation document at the bottom of the contract.

Administrative or judicial intervention

This model is effective in employment contracts with underage workers, when the minimum age for employment has been violated and prior consent by the Social Protection Ministry is required. When the contract is found to be irregular and its termination declared, the employer must pay the total salaries and contributions that exist for the underage worker.

In cases of Union Forums, in which the protected employees can only be dismissed if just cause is proved, there must be a court decision authorizing it, without which it is not legally valid.

•	Employment relationship termination order.

•	Administrative decision.

•	Court order.

Currently the type of contract settlement is not sent to the government, so these types do not need to have specific codes. The codes are for the company's control and management information access.