What you need to know before hiring in Colombia: A guide to terminations

When you hire your first Colombian employee, letting them go is probably the last thing on your mind. But if you don't know the laws around terminating employees in Colombia, you could find yourself in a legal mess when it comes time to part ways with a worker.

Terminating employees in foreign countries requires careful compliance with local labor laws. Getting this wrong could land you in court for a wrongful dismissal claim, facing fines and other legal penalties. 

So before you onboard your first Colombian hire, read this guide to ensure you understand the basics of terminating employees in Colombia—and how hiring through an Employer of Record (EOR) can simplify terminations and spare you from missing compliance requirements when the time comes.

5 essential things to know before hiring in Colombia

• Written employment agreements are only required for certain types of contracts. Those employment contracts affect dismissals, so this is important. You'll need the agreement in writing if:
  • Your employee will have a probation period.
  • They're on a fixed-term rather than indefinite-term contract.
  • They're receiving an integral salary.
  • They'll receive any other non-salary payments.
• You can generally terminate employment at any time, and for any reason. However, if you terminate an employee without just cause, you're required to pay them severance.
• Notice periods are generally not required, except for fixed-term contracts that aren't going to be renewed, and in certain cases of employee misconduct.
• The onus is on employers to prove there was just cause for dismissal. If the employee files a wrongful dismissal claim and you can't back up your cause for dismissal, you'll have to pay them the severance they're owed.
• Ministry of Labour approval is required for collective dismissals. These must meet certain standards set forth by employment law (more on this later).

Termination rules in Colombia: What are acceptable grounds for firing an employee?

If any employee chooses to resign voluntarily, they can do so at any time and for any reason. As for involuntary terminations, the below stipulations apply.

• Termination during the probationary period. In Colombia, if an employee is going to have a probation period, it must be specified in writing in their employment contract, and last a maximum of two months. Generally, an employee can be terminated at any time during the probation period without notice or severance, as long as the termination is in good faith.
• Termination without cause. Termination without cause is allowed in Colombia and no notice is required in most cases. The employer will need to provide the employee with written notice of termination and pay them severance based on the length of their employment and their salary (see the table below).
• Termination for cause. If employment is terminated for cause, no severance is required, but 15 days of notice may be required in certain cases:
  • Poor performance
  • Systemic failure to comply with legal or conventional obligations
  • Addiction
  • Breach of health and safety rules
  • Inability to perform role or task
  • Chronic or contagious disease

What are the mandatory notice periods and termination pay for Colombian employees?

No prior notice is required for termination of employment: 

• Without just cause if the employment agreement is on an indefinite term
• If the employee was hired to complete a specific task or project, where the duration of the contract is tied to the duration of the task or project. They can be terminated without notice when the task or project is complete, and the reason is assumed to be the completion of the task or project (as long as this is written in their contract). 

15 days of notice is required if an employee is terminated for cause for certain reasons:

• Poor performance
• Systemic failure to comply with legal or conventional obligations
• Addiction
• Breach of health and safety rules
• Inability to perform role or task
• Chronic or contagious disease

30 days of notice is required if the employee is on a fixed-term contract and the employer chooses not to renew it after it expires.

If an employee is terminated without cause, severance pay (also called indemnification) is required. Severance depends on the type of employment relationship.

For fixed-term contracts, severance is required if the employee is terminated before the contract expires. Severance is calculated as the amount of earnings due until the agreed-upon termination of the contract.

For service contracts without a termination date, severance is required if the employee is terminated before completing the task or project they were hired to complete. Severance should be equal to at least 15 days of payment and calculated based on the amount of earnings due to complete the remainder of the task or project.

For indefinite-term contracts, the amount varies based on the length of employment and the employee's salary. See the table below: