Colombia’s new president may be very totally different from the management of the previous. Gustavo Petro is the first left-leaning leader in the country’s history, and as such has been making ready a number of reforms to make Colombia aligned with the values he stands for. The labor reform in Colombia is considered one of these adjustments, which is definite to affect what you are promoting. Let’s check out what to anticipate if the reform is accredited by Congress and the way it could have an effect on the authorized necessities to begin a enterprise in Colombia.
What’s going to change with the brand new labor reform in Colombia?
As this reform is complete and can modify varied working situations, we are going to solely give attention to the elements that may affect what you are promoting.
- Modifications to Labor Contracts
- Termination of the Labor Contract
- Compensation for Dismissal With out Simply Trigger
- Working hours, leaves, and leaves of absence
- Extra Provisions
- Collective Labor Features
1 – Modifications to labor contracts:
In the present day, we have now two major varieties of contracts: The Indefinite Time period contract and the Prestación de Servicios, or Mounted-Time period. The principle distinction, apart from the period of the contract, is the obligations of the employer.
In an indefinite contract, the employer has to pay for a fraction of the price of the worker’s healthcare, a kind of labor insurance coverage, amongst different issues. Moreover, they should compensate any employee who has been dismissed with out simply trigger and the worker is free to stop at any time with out giving discover.
In a fixed-term contract, the worker has to handle every little thing on their very own. It can be prolonged a most of three instances.
With the brand new labor reform in Colombia, employees below an indefinite contract now have to offer a 30-day discover earlier than quitting, though it’s not clear if there’ll be a consequence for not complying. Additionally, each contract during which the period just isn’t specified will likely be understood as an indefinite contract.
The fixed-term contract is essentially the most affected, below the reform. In the present day, many firms use fixed-term contracts for jobs or positions that will usually be categorized as Indefinite to not pay the employee’s medical insurance.
That’s going to vary, as they would be the exception, which means that the corporate has to expressly point out the momentary wants they’ve in order that it’s not used to fulfill everlasting wants.
The period of the contract should even be specified, though it may be prolonged as many instances as wanted, offered the overall period of the contract doesn’t exceed two years.
2 – Termination of the labor contract:
New standards of reasonableness and proportionality are going to be launched to evaluate violations by both the employer or the worker when terminating the employment contract for ‘Simply Trigger’. It additionally introduces an obligation for the employer to do a dismissal continuing earlier than any termination, in any other case, it may be dominated ineffective.
The reform additionally has bolstered labor stability, as further authorization is required for a dismissal to be efficient in some particular instances:
Within the case of a employee with union safety, authorization from a labor decide is required; within the case of different protected employees, comparable to pregnant and disabled folks, authorization from the labor inspector is required until the individual was employed below these situations and they’re explicitly acknowledged within the contract.
These measures are put in place to keep away from discrimination within the office, so if the employee feels they have been dismissed due to their situation, they could resort to labor courts. In these instances, the employer may have the duty to show the dismissal was not primarily based on discriminatory reasonings, however relatively goal ones.
3 – Compensation for dismissal with out simply trigger:
As acknowledged earlier than, the employee should be compensated when dismissed with out simply trigger. Listed below are the principle adjustments:
- In fixed-term contracts, the minimal compensation goes from 15 to 45 days of wage.
- In indefinite contracts, it goes just a little in another way:
In the present day, compensation in indefinite contracts is set by the wage and the way lengthy the worker has been working at that firm:
- Employees who earn lower than 10 minimal month-to-month salaries are entitled to 30 days of wage, with 20 further days per yr labored on the firm.
- Employees who earn greater than 10 minimal month-to-month wages are entitled to twenty days of wage, with 15 further days per yr labored on the firm.
The labor reform in Colombia will remove this differentiation, and each employee will likely be entitled to the identical compensation, no matter how a lot they earn.
- Each employee will likely be entitled to 45 days of wage, with 45 further days per yr labored on the firm.
4 – Working hours and absences:
Weekly working hours will likely be lowered, additional hours and holidays will now be costlier, further compulsory leaves are launched, and night time work hours (which pay greater than daytime work) will likely be prolonged.
The working week will go from 48 to a most of 42 hours. This implies Saturdays will doubtless be now understood as additional hours, which together with Sunday and vacation work will now be paid with a surcharge of one hundred pc of the unusual wage, relatively than the present 75 %. Evening-time work will likely be prolonged by 3 hours, and can now be from 6:00 pm to six:00 am.
Moreover, the understanding of a “home calamity” will likely be expanded. They embrace “any private or household occasion, fortuitous occasion or power majeure whose seriousness impacts the conventional improvement of the employee’s actions”.
Lastly, two new compulsory leaves are launched, and one is prolonged:
- To attend scheduled medical appointments or emergency medical appointments, these embrace the employee presenting incapacitating menstruation cycles, dysmenorrhea, or stomach rigidity on account of menstruation.
- To attend faculty obligations because the authorized guardian of youngsters or minor members of the instant household.
- Paternity depart will now be 12 weeks (3 months).
5 – Extra provisions:
This impacts wages, so pay shut consideration:
The yearly wage readjustment will likely be no less than equal to the CPI variation as of December thirty first of the earlier yr for employees who earn two or fewer month-to-month minimal salaries.
If the employee can’t work due to the employer, they can’t refuse to pay wage for the times the worker has not labored. Which means that if the employer asks the employee to not work, they nonetheless should pay for these days.
6 – Collective labor elements
That is crucial side of the labor reform in Colombia, and can most likely have the best affect on what you are promoting, because it entails many various subjects:
Proposed adjustments to the laws surrounding unions and collective bargaining embrace a number of key factors.
The definition of an “employer” will likely be expanded to embody contractors and their organizations, permitting for contractors to be included in union associations.
Moreover, collective bargaining agreements which can be negotiated with no less than one-fifth of the overall variety of employees or workers of an organization or teams of firms will likely be prolonged to all employees at that stage, no matter whether or not or not they’re unionized.
The negotiations for collective bargaining should be carried out with unity of the negotiation settlement, unity of the negotiating committee, unity of the negotiating desk, and conclude with the signing of a single collective bargaining settlement at every stage.
Nevertheless, collective bargaining agreements geared toward fixing working and employment situations are prohibited, as are these agreements whose objective or impact is to entrust the execution of labor or providers in favor of third events in change for a value to employees’ organizations.
Lastly, let’s speak about strikes. They’re certain to turn into extra frequent if working situations should not met, on account of them being additional protected by the state.
The proposed adjustments to the laws surrounding the suitable to strike embrace a number of key factors.
First, the suitable to strike is redefined, and the State now should be certain that all employees, whether or not unionized or not, have the basic proper to strike in all its kinds, together with partial strikes. The proper to strike can be now contemplated in firms or entities that present public providers.
Each strike has to adjust to the authorized necessities to be declared. That is proven by how the bulk guidelines for the approval of the strike at the moment are regulated:
For employees to strike throughout the framework of negotiation of an organization settlement, it should be accredited by a majority of employees affiliated with the union or unions concerned with the battle after they characterize no less than one-third of the employees of the corporate; and strikes can now solely be initiated after a two-day discover has been given to the employer, besides within the case of strike attributable to the employer.
The situations the place putting is deemed unlawful have been restricted to solely three situations:
1 – When in important providers the availability of minimal providers just isn’t complied with, when it isn’t peaceable, or when prior discover just isn’t given when required.
2 – The employer is not capable of dismiss employees who’ve legally declared a strike and the sanctions that the employer can train in opposition to these chargeable for an unlawful strike are eradicated.
3 – The utmost period of the strike of 60 days is eradicated, and employees below union autonomy can lengthen the strike till they deem it pertinent or request the convening of an arbitration tribunal at any time.
How can the Labor Reform in Colombia have an effect on what you are promoting?
The working situations in Colombia are about to vary drastically, whether or not this or different variations of the Labor Reform are accepted.
There isn’t any method of realizing but if these adjustments will likely be good to your particular firm. Understanding the proposed adjustments will likely be helpful for what you are promoting in the long run as compliance with authorized necessities in Colombia will assist keep away from penalties.
Biz Latin Hub may help you with the Labor Reform in Colombia
At Biz Latin Hub, we offer built-in market entry and back-office providers all through Latin America and the Caribbean, with places of work in Bogotá and Cartagena, in addition to over a dozen different main cities within the area.
Our unequalled attain means we’re ideally positioned to assist multi-jurisdiction market entries and cross-border operations.
In addition to data concerning the Labor legal guidelines in Colombia, our portfolio of providers contains hiring & PEO accounting & taxation, firm formation, checking account opening, and company authorized providers. Contact us in the present day to search out out extra about how we are able to help you to find high expertise or in any other case doing enterprise in Latin America and the Caribbean.