FTC regulated: Yes

Remarks

Arts. 46-48 LC.

Valid reasons for FTC use: objective and material reasons

Remarks

See art. 47 LC: fixed term contracts and contracts concluded for a specific work are an exception. They can only be concluded where it is required by the incidental or temporary nature of the service to be performed or the work to be executed.

Maximum number of successive FTCs: no limitation

Remarks

Art. 48(2) LC provides that fixed-term contract can be expressly or tacitly renewed. No maximum authorized of renewals is specified.

Maximum cumulative duration of successive FTCs: no limitation

Remarks

According to art. 48(1) LC, any provision of a contract of employment which provides for a term of employment longer than 1 year shall be null and void. The nullity may be ordered only at the request of the worker. The same provision also applies to work that requires specific technical training when the term of the contract is more than five (5) years.
Therefore the maximum duration of one FTC is 1 year (or 5 years when specific technical training is required).
Art. 48(1) provides that fixed-term contract can be expressly or tacitly renewed. No maximum number of possible renewals is specified.
Therefore there seems to be no limitations on the maximum duration of successive FTCs

Maximum probationary (trial) period: 2 month(s)

Remarks

Art. 49 LC: The probationary period shall not exceed 60 days.
Within this 60-day period, either party can terminate the employment relation without any responsibility to any of the parties (art. 52 LC).

Obligation to provide reasons to the employee: Yes

Remarks

Art. 117 LC.

Valid grounds (justified dismissal): worker's conduct, worker's capacity, economic reasons

Remarks

* Art. 112 LC provides a list of just causes which allow the employer to dismiss an employee without liability on his or her part. These just causes include:
- deceit by means of false letters of recommendation or certificates, -
- acts of violence, insults, or serious indiscipline at work against the employer or his/her relatives,
- deliberate material damages against the plant, machinery, tools, goods or merchandise and any serious negligence endangering the safety of the workers or the material,
- acts of immorality,
- revealing manufacturing secrets,
- criminal conviction,
- unjustified absence from work without any justification for two consecutive working days, or a total of three days within the same months,
- repeated failure to adopt the preventive measures or to follow the proper procedure to avoid accidents at work and occupational diseases,
- obvious incapacity and inefficiency to fulfil the obligations under the contract,
- infectious disease or mnetal illness when the worker refuses treatment,
- serious misconduct and serious breaches of the obligations under the contract of employment.

In addition, art. 111 LC lists other causes of termination such as force majeure, insolvency, business closure, and suspension of the activities of the employer for more than 120 days for economic reasons (see below under "collective dismissals").

Art. 116 LC allows for termination of a contract of indefinite duration by either party by giving advance notice to the other party.

Prohibited grounds: pregnancy, trade union membership and activities

Remarks

Dimissal on the grounds of pregnancy and lactation is prohibited in art. 144 LC.
Art. 96 c) also prohibits the dismissal of an employee on the grounds of his or her trade union membership and his or her participation in trade union activities.

Note that Art. 12 of the LC prohibits discrimination based on race, religion, political opinion and economic status, but only with regards to any social welfare, educational, cultural, recreational or commercial establishment operated for the use or benefit of the community in any undertaking or workplace, whether under private or state ownership.

Workers enjoying special protection: workers' representatives, pregnant women and/or women on maternity leave

Remarks

- Employees who are members of the Board of Directors of a trade union enjoy special protection: they can only be dimissed with prior authorization from the Labour judge (the autorization will be only delivered if the employer duly proved the existence of a just cause) (art. 516 LC).
If the employer fails to comply with this requirement, he or she will be liable to pay the 6 months' salary to the trade union organization.
- The same rule applies to pregnant women: art. 124 LC.
- The LC also requires the employer to obtain prior authorization from the Labour Inspector (or the mayor) before dismissing a women during the entire period of pregnancy and 3 months after the child delivery. Such authorization to dismiss can only be given if the existence of one of the just causes listed in art. 112 LC is proven (see arts. 144 and 145 LC)

Notification to the worker to be dismissed: written

Remarks

Art. 117 LC: The party which unilaterally terminate the employment contract must give the other party a written notice. However, if the contract was concluded orally, the notice of termination can also be delivered orally. In any cases, the notice must indicate the reason for terminating the employment contract.


Notice period:

Remarks

According to art. 116 LC, either party can terminate an employment contract of indefinite duration provided that advance notice is given.
The statutory notice period varies according to the worker's length of service, as follows:
- 24 hours, if the length of service is less than 3 months;
- 1 week if the length of service is between 3 and 6 months;
- 2 weeks if the length of service is between 6 and 1 year;
- 1 month if the length of service is between 1 and 2 years;
- 2 months if the length of service is more than 2 years.

tenure ≥ 6 months:

  • All: 2 week(s).

tenure ≥ 9 months:

  • All: 2 week(s).

tenure ≥ 2 years:

  • All: 2 month(s).

tenure ≥ 4 years:

  • All: 2 month(s).

tenure ≥ 5 years:

  • All: 2 month(s).

tenure ≥ 10 years:

  • All: 2 month(s).

tenure ≥ 20 years:

  • All: 2 month(s).

Pay in lieu of notice: Yes

Remarks

See arts. 116 and 118 LC.

Notification to the public administration: No

Notification to workers' representatives: No

Approval by public administration or judicial bodies: No

Remarks

Except in the event of a dismissal of a protected worker (pregnant women and members of the board of directors of a trade union) whose dismissal must be authorized by a labour judge and/or the labour inspector (see arts. 124, 144, 145, 516 LC).

Approval by workers' representatives: No

Definition of collective dismissal (number of employees concerned): There is no statutory definition and no regulation as such of collective dismissals for economic reasons.
However, the LC regulates the suspension of the employment contracts for economic reasons and allows the employer (and the employee) to terminate employment contracts which have been suspended for economic reasons for more than 120 days without incurring liability.

Remarks

- See art. 111 h) LC in combination with art. 100 LC.
Art. 111 h) allows either party to terminate a contract which has been suspended for more than 120 days in accordance with the procedural requirements applicable to such suspension in the following cases:
- lack of raw material and driving force for the negotiation not attributable to the employer
- overproduction
- unprofitable activity
- lack of funds and impossibility to obtain them.

Note also that fortuitous event or force majeure is also a cause for termination of employment by either parties (art. 111 h) LC)

Prior consultations with trade unions (workers' representatives): No

Notification to the public administration: Yes

Remarks

Art. 102 LC requires the employer to notify in writing the workers affected by the suspension at least 30 days in advance and to send a copy of this notification to the Ministry of Labour and Social Welfare.
The suspension of employment contracts for economic reasons shall be authorized by the Ministry of Labour and Social Welfare (La Secretaría de Trabajo y Previsión Social): art. 101 LC.

Notification to workers' representatives: No

Remarks

No obligation to notify the workers' representatives of the suspension. The law only requires the employer to notify in writing the workers affected by the suspension at least 30 days in advance and to send a copy of this notification to the Ministry of Labour and Social Welfare (art. 102 LC).

Approval by public administration or judicial bodies: Yes

Remarks

The suspension of employment contracts for economic reasons shall be authorized by the Ministry of Labour and Social Welfare (La Secretaru00eda de Trabajo y Previsiu00f3n Social): art. 101 LC.

Approval by workers' representatives: No

Priority rules for collective dismissals (social considerations, age, job tenure): No

Employer's obligation to consider alternatives to dismissal (transfers, retraining...): No

Priority rules for re-employment: No

Notes / Remarks

Notes

The procedural requirements reviewed in this section apply to the suspension of an employment contract for certain reasons listed in the law, which include economic reasons.
That procedure is relevant to dismissal for economic reasons insofar as the suspension of a contract (for economic reasons) for more than 120 days is a valid cause for termination of employment by either parties in the Labour Code. There are no additional specific procedural requirements for terminating those employment contracts which have been suspended for economic reasons.

Severance pay:

Remarks

There is no general right to severance pay for justified dismissals (i.e those based on the conduct or the capacity of the worker, or on economic reasons).
However, in the event of unjustified dismissal (dismissal without cause) and indirect dismissal (termination by the employee caused by actions of the employer listed in art. 114 LC such as serious misconduct, violence, failure to pay the wages...), any employee under a contract of indefinite duration is entitled to compensation (Auxilio de cesantía) which varies according to the employee's length of service, as follows (art. 120 LC):
- the length of service is between 3 and 6 months: 10 days of salary,
- from six months to one year of service: 20 days of salary,
- after one year of continuous services: one month's salary for each year of service, up to a maximum of 25 months' salary.
However, according to article 120A LC, the cap is reduced to 15 months' salary in micro-enterprises, which are defined as enterprises with a maximum of 10 employees.

Note that according to the LC, in enterprises with more than 10 employees,
- after 15 years of service any employee who voluntarily terminates his employment is entitled to 35% of his or her accrued severance.
- after 6 months of continued service in the event of an employee's death, his or her heirs are entitled to 70% of the accrued severance.

tenure ≥ 6 months: 20 day(s)

tenure ≥ 9 months: 20 day(s)

tenure ≥ 1 year: 1 month(s)

tenure ≥ 4 years: 4 month(s)

tenure ≥ 5 years: 5 month(s)

tenure ≥ 10 years: 10 month(s)

tenure ≥ 20 years: 20 month(s)

Redundancy payment:

Notes / Remarks

Notes

1) Dismissal for a just cause: no severance pay
2) Unjustified dismissal and indirect dismissal: severance pay = compensation for unfair dismissal [auxilio de cesantía].
3) No specific redundancy pay. In the event of termination of employment following a suspension of an employment contract for more than 120 days for economic reasons authorized by the administration, employee are not entitled to any severance payment.
An employee under a contract of indefinite duration who is dismissed for economic reasons will be only entitled to severance pay if his or her employment was terminated by way of unjustified dismissal.

Compensation for unfair dismissal - free determination by court: No

Remarks

Art. 113 LC.

Compensation for unfair dismissal - Legal limits (ceiling in months or calculation method): In the employer fails to prove the existence of one of the just causes listed in art. 112 LC, and reinstatement is not ordered by the judge, the employer will be liable to pay the employee compensation of an amount equivalent to the indemnity payable in the event of unjustified dismissal (auxilio de cesantía) which varies according to the employee's length of service, as follows (art. 120 LC):
- the length of service is between 3 and 6 months: 10 days of salary,
- from six months to one year of service: 20 days of salary,
- after one year of continuous services: one month's salary for each year of service, up to a maximum of 25 months' salary.
However, according to article 120A LC, the cap is reduced to 15 months' salary in micro-enterprises, which are defined as enterprises with a maximum of 10 employees.
In addition, the employer shall pay the back wages from the date of the dismissal until the decision of the labour judge is final.

Remarks

See art. 113 LC combined with art. 120 LC.
On back wages, see art. 113 LC.

Reinstatement available: Yes

Remarks

Art. 113 LC. Reinstatement is available is lieu of compensation for unfair dismissal if the employer fails to prove the existence of one of the just causes listed in art. 112 LC (i.e serious misconduct, violence, unjustified absence, inefficiency...).

Preliminary mandatory conciliation: Yes

Remarks

Art. 750 LC: preliminary conciliation is carried out by labour judge.

Competent court(s) / tribunal(s): labour court

Remarks

Arts. 666, 679 LC.
First instance judges are the "Juzgados de Letras del Trabajo".
Appeals are heard by the "Cortes de Apelaciones del Trabajo".

Existing arbitration: No