Labor Disputes Contract Law

Labor disputes and contract law in Colombia is a hot topic that gets a lot of attention in the press. The labor laws in Colombia are set out by the Colombian Labor Code, conceived in 1950. The Labor Code itself has not changed much in recent years, though amendments have been added recently as in 2008. Significant revisions include the 50 Act of 1990, the 789 Act of 2002, and the 797 Act of 2003.

All employees in Colombia, whether corporate, domestic, or public, are privy to some form of a labor contract. As such, contractual obligations apply to both them and their respective employers. To start, let’s take a closer look at the different kinds of contracts that may be formed between an employee and an employer.

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The minimum requirements for a contract

Contracts may be in verbal or written form. The three essential components of an employment agreement are:

  1. The specification of services sought (by the employer)
  2. The direct provision of services (by the employee)
  3. Remuneration or compensation of the employee concerning services rendered.

A document that outlines these three components may be considered a form of contract. However, formal additions may be required to constitute a specific type of contract or to make an agreement legally binding.

As stated earlier, contracts needn’t be in writing; they can also be verbal agreements. For a verbal agreement to be considered a contract, the following conditions must be agreed upon by both parties:

  1. The nature of the service to be provided
  2. The length of the contract
  3. The amount and form of compensation

The different types of labor contracts

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Indefinite Term Contracts

An Indefinite Term contract is one without a predefined term or duration. Such contracts apply from the date of commencement onwards and do not expire with time. All contracts, unless otherwise stated, are indefinite term contracts. Terms for termination of the contract may be specified within the contract.

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Fixed Term Contracts

Fixed Term Contracts are legally binding agreements between an employer and an employee that apply for a certain period. This duration is decided with mutual agreement between the party drawing up the contract and the party entering it. A fixed-term contract can range from any number of months to up to three years.

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Service Contracts

In this case, both parties are not entering into an employment agreement but rather just a commitment to provide certain services. A person retained via service contract is not an employee and is not entitled to a salary or any form of employment benefit; they are only paid a fee. However, they are also not subject to the employer in any way beyond the provision of the services outlined in the contract. Such employees have no other obligations to the employer (such as working to a certain schedule or adhering to guidelines). These types of contracts are best suited to consultants and independent contractors.

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Employee Rights

Employees in Colombia are guaranteed several rights:

1. A salary

Salary

The minimum wage for all employees (roughly equivalent to COP 908,526 for people working the maximum amount of time allowed in a week). The term “Salary” here includes monetary compensation, as well as any other form of remuneration received by an employee instead of services rendered (also referred to as payment in kind).

Payment in kind may not exceed 30 percent of the overall salary; the rest must be in the form of monetary compensation. Conversely, an employer may also choose to count non-salary payments made to an employee as part of an employee’s salary.

Please remember that at the heart of most of the labor disputes and contract laws in Colombia are salaries or wages.

However, the amount may not exceed 40 percent of their salary. Employees who receive a salary that is at least ten times as much as the minimum wage may opt for an integrated salary, which affords them their present wage plus up to 30 percent of their salary and compensates them in advance for future overtime, statutory payments, and other forms of payment rendered beyond their regular duties

2. A separated workday and a maximum workweek

An employee’s mandatory workday cannot exceed 8 hours, and the required time for the week may not exceed 48 hours. If agreed upon by both the employer and employee, a different amount of time may be assigned for any given day, given that it is between 4 and 10 hours. An employee’s workday must be broken into two parts, with a period of rest allowed between both parts. An employee must also receive at least one rest day per week.

A separated workday and a maximum workweek

3.  Overtime pay

Overtime pay

Regular employees are entitled to overtime pay at a rate that is 25% higher than regular hourly compensation for extra shifts they may put in. For nighttime workers, this amount is raised to 35% over the regular hourly compensation. It is raised to 75% above their regular hourly compensation for work on a Sunday. This doesn’t apply to employees who earn an integrated salary or employees of a trust.

4. Right to a safe work environment

Employers are obliged to provide employees with a safe work environment that adheres to the safety and health at work management system protocols. These protections must extend not only to employees but to contractors as well.

5. Right to collectively bargain

Employees aside from public employees are allowed to unionize and seek better compensation, work environments, or other stipulations of their employer. In addition, non-unionized workers may enter into collective bargaining agreements. Still, they may not adopt these agreements if a pre-existing union represents one-third of the company’s overall workforce.

Right to collectively bargain

6. Right to strike

Employees may strike for up to sixty days without compensation. Still, they will have to find a means to conciliation, composition, or arbitration within three days of elapsed sixty days.

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