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    Compensation for Contract Terminations Under the Labor Reform.
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    Compensation for Contract Terminations Under the Labor Reform.

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    The landscape of compensation for unjustified dismissal could undergo significant changes, providing greater protection to workers under different types of contracts. In the case of...

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    The landscape of compensation for unjustified dismissal could undergo significant changes, providing greater protection to workers under different types of contracts.

    In the case of fixed-term contracts and contracts for a specific task or project, the labor reform stipulates a substantial increase in the minimum compensation, since currently the compensation for unjustified dismissal in fixed-term contracts and contracts for a specific task or project corresponds to the value of the wages corresponding to the time remaining to fulfill the term or duration of the task or project stipulated in the contract. Such compensation currently cannot be less than 15 days' wages. The reform proposes to increase the minimum threshold to 45 days' wages, meaning that such compensation, if the labor reform is approved, could not be less than 45 days' wages. This measure seeks to more fairly recognize the early termination of fixed-term contracts and contracts for a specific task or project.

    Regarding indefinite-term contracts, it is proposed to eliminate the distinction between workers earning salaries above and below 10 current legal monthly minimum wages. Instead, it is proposed to unify the compensation rules for all workers under this type of contract. In this way, it seeks to establish equality in labor protection regardless of the employee's salary level.

    Under indefinite-term contracts, the labor reform has established a new calculation of compensation. Now, compensation will correspond to 45 days' wages for the first year of service, and an additional 45 days will be added for each subsequent year after the first. This reform seeks to recognize the seniority and loyalty of workers, providing greater compensation for their time of service compared to current legislation, which first distinguishes between comprehensive salaries (greater than 10 SMLMV) and non-comprehensive salaries (less than 10 SMLMV), establishing the computation of compensation as follows:

    Salary above 10 SMLMVSalary below 10 SMLMV
    0<1 year of service: 20 days' wages0<1 year of service: 30 days' wages
    >1 year of service: 15 days' wages X each year>1 year of service: 20 days' wages X each year

    Likewise, it intends to change the rules applicable to compensation for non-payment, contemplated in Article 65 of the Substantive Labor Code (CST). Instead of establishing a limit of 24 months for this compensation, it is now determined that the compensation will be equivalent to one day's wages for each day of delay in payment by the employer, without a time limit. This measure seeks to protect workers against the lack of timely payment by their employers.

    Finally, if a worker alleges that they were dismissed due to some form of discrimination, the employer will bear the burden of proving that the dismissal was based on objective or non-discriminatory reasons. If the employer cannot prove this, the dismissal will be considered ineffective, and the worker will have the right to reinstatement without interruption of employment or to compensation for damages caused.

    June 13, 2023