Grounds for Termination of Employment According to the Labor Code
Grounds for Termination of Employment
Legal Framework
The grounds for termination of employment are outlined in Articles 159, 160, and 161 of the Labor Code. These articles cover grounds for revocation, dismissal due to company needs or job mismatch, and termination by mutual agreement.
Types of Termination
Objective Causality
Objective causality refers to situations that lead to the dissolution of the employment contract due to external factors not attributable to either the employer or the employee. These include:
- Expiration of the contract term
- Completion of the work or service agreed upon
- Force majeure or unforeseen circumstances
Subjective Grounds
Subjective grounds involve factors related to the actions or conduct of either the employer or the employee. These can be further classified as:
- Involuntary: such as the death of the worker.
- Voluntary: These are typically referred to as grounds for dismissal for cause. They arise from actions or omissions by either party that violate contractual obligations, justifying termination by the other party following legal procedures. Examples include:
- Unilateral will of a party (e.g., resignation by the worker or dismissal by the employer in specific cases)
- Needs of the enterprise
- Mutual Agreement: Both parties can agree to terminate the contract, extinguishing their legal obligations. Article 177 of the Code outlines specific procedures for mutual termination agreements.
Objective Grounds in Detail
Expiration of the Contract Term
While indefinite-term contracts are common, fixed-term contracts are also permitted for specific situations like seasonal work or short-term projects. The maximum duration of a fixed-term contract is generally one year, with exceptions for managers and professionals (up to two years).
Consequences of exceeding the contract term
If an employee continues to work after the expiration of a fixed-term contract, it automatically converts into an indefinite-term contract. The same applies to the second renewal of a fixed-term contract.
Effects of Contract Completion
When a fixed-term contract reaches its agreed-upon end date, the employment relationship is terminated. If the employer terminates the contract prematurely without cause attributable to the worker, the worker is entitled to compensation for the remaining contract period.
Conclusion
Understanding the grounds for termination of employment as outlined in the Labor Code is crucial for both employers and employees. This knowledge ensures that terminations are conducted legally and fairly, protecting the rights and interests of all parties involved.