There are several reasons that can lead to the end of an employment relationship, from being fired to the employee wanting to leave the company, and each of them has different implications for the person leaving and the employee. The way in which the professional relationship ends determines not only the type of termination, but also the rights and compensations that each party can demand.
According to Ekonomista, a website specializing in economics and finance, the termination of the employment contract is regulated in Chapter VII of the Labor Code, between articles 338 and 403. Even with recent changes to labor legislation, the framework continues to guarantee some protection for workers, especially in cases where the end of the contract is not voluntary.
Expiration of the contract
Expiry occurs when the period defined in a fixed-term contract ends, or when the worker reaches retirement age or becomes unable to perform duties. According to Ekonomista, in these situations there is the right to compensation corresponding to 24 days of basic salary and seniority payments for each complete year of seniority.
Revocation by mutual agreement
It is the most peaceful modality and one of the most common. The company and the worker reach a consensus on the end of the contract and formalize the agreement in writing. Ekonomista explains that this type of termination may include financial compensation negotiated between both parties, in addition to the definition of termination and payment dates.
Dismissal for just cause
This is a termination at the initiative of the employer, normally motivated by behavior considered serious, such as unjustified absences, disobedience or violation of contractual duties. In these cases, the worker is not entitled to compensation, but the employer must prove that there was just cause.
Collective dismissal and termination of employment
Both situations come from the employer’s initiative, but for different reasons. Collective dismissal, according to the same source, applies when several positions are eliminated simultaneously, for economic or structural reasons. The termination of a job can be decided for technological, organizational or market reasons.
In any of these cases, legal compensation recently increased from 12 to 14 days of base pay for each year of seniority, a change valid only for new contracts concluded after 2023.
Dismissal due to unsuitability
This type of termination occurs when the employee is no longer able to perform their duties with the required quality, even after additional training or support. The law requires the employer to present objective evidence of inadaptation, such as drops in productivity or repeated technical failures.
Resolution and complaint by the worker
When the worker takes the initiative, there are two main hypotheses. If there is just cause, such as systematic delay in salary payment or violation of rights, the employee can terminate immediately and receive compensation. If there is no just cause, you can terminate the contract, but you must serve 30 or 60 days’ notice, depending on seniority.
Ekonomista also recalls that failure to comply with this prior notice may force the worker to compensate the company. In fixed-term contracts, the notice period is 15 to 30 days, depending on the duration of the contract.
What has changed from 2023
In addition to the increase in compensation, the changes to the Labor Code introduced an important rule: workers can no longer waive credits owed by the company, such as holiday, Christmas or overtime allowances. Even if they agree to leave by agreement, these amounts continue to be mandatory.
In short, regardless of how the contract ends, knowing your rights and duties is essential to avoid financial losses and conflicts. As explained by , a well-conducted termination, whether on the initiative of the worker or the company, can make all the difference in the outcome and the amount you actually receive.
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