Frequently Asked Questions

The information on this page does not exempt you from consulting the Labor Code and Labor Law in force.

The contents here present may change at any time, in case of doubt, seek legal advice from a specialized professional.

Termination of employment contract

Can the contract be rescinded during the trial period?

Yes. During the trial period, both the employer and the worker have the right to rescind the contract without warning or invocation of just cause and without the right to any compensation, except where a written agreement stipulates otherwise.

But, if the trial period has exceeded 60 or 120 days, the employer must give 7 or 15 days notice of their intention to terminate the contract.

In which situation can the employment contract lapse?

The employment contract lapses when:

  • - It reaches its term;
  • - In cases where it is unexpectedly, absolutely and definitively impossible for the worker to do their work or for the employer to receive it;
  • - When the worker retires due to age or disability;
  • - The employer dies, the company goes into liquidation or is closed totally and permanently.

What rights does the worker have when the employment contract lapses?

When the term employment contract expires, at the initiative of the employer, the employee is entitled to compensation corresponding to 18 days of basic compensation and bounty payment for each full year of seniority.

In the case of expiration of an uncertain term contract, the employee will be entitled to the following compensation for expiration:

  • - 18 days of basic and daily remuneration for each full year of seniority, for the first three years of the contract;
  • - 12 days of basic remuneration and bounty payment for each full year of seniority, in subsequent years.

    If the contract lapses on the retirement of the worker, they do not have the right to any compensation.

What is the Work Compensation Fund?

The Work Compensation Fund, is financed by employers, with monthly contributions, to ensure the worker's right to receive 50% of the amount of the compensation they are due in case of termination of their employment contracts.

Employers are required to contribute 1% of pay – 0,925% to Work Compensation Fund and 0,075% to Guarantee Fund for Work Compensation.

The Work Compensation Fund may be activated to pay compensation for termination of the employment contract to which the employee is entitled in case of collective dismissal, termination of employment, inability, expiration of term contract, expiration of the employment contract temporary, death of employer, extinction of a legal person or definitive closure of an enterprise.

Can the employer contract another worker for the same position once the contract has terminated?

When the contract terminates at its term for a reason which is not attributable to the worker, a new person cannot be admitted to the same position before a period of time has elapsed which is equal to one third of the duration of the contract, including its renewals. The employer may only contract another worker for the same position in the following cases:

  • - The new absence of the worker replaced when the term employment contract has been signed for their replacement;
  • - Exceptional increase in the company's activity after the contract has terminated;
  • - Seasonal activities;
  • - The worker was contracted previously under the system for contracting workers seeking their first employment.

Can the employment contract be revoked?

Yes. Both the worker and the employer can revoke the employment contract by mutual agreement, but this agreement should be written in a document signed by both parties, giving the date it is signed and the date it comes into force.

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