Suspension of employment contracts

Written by Lic. Nicole Pérez, Associate Lawyer at CLD Legal.

In the midst of the crisis that our country is facing due to the Covid-19 pandemic, one of the measures that the national government took, with a view to ensuring the population’s job stability, was to regulate the suspension of the employment contract under the cause of force majeure or fortuitous event.

The Labor Code establishes in its article 7 “for all labor purposes, force majeure or fortuitous event is understood to be the unforeseen event that cannot be resisted.” It is clear that under this definition, it is possible to circumscribe the situation we are facing with the covid-19 pandemic.

Next, Article 199 establishes as causes for suspension of the Labor Contract without liability for the employee and employer the cases of force majeure or fortuitous event, as follows:

8. Force majeure or fortuitous event when it has as a necessary, immediate and direct consequence of the temporary cessation of the activities of the company, the establishment or work of the employer for a minimum period of one week. “

An important point to highlight of this precept is that for said cause to be configured, the immediate result of the act of force majeure or fortuitous event must be the necessary, immediate and direct stoppage of the activities of the company for a period greater than one week.

In the case of the national emergency decreed by the national government, with a view to mitigating the contagion of Covid-19, measures were taken to close establishments as part of the national curfew. Said closure was established by Executive Decree 500 of 2020 and expanded by Executive Decree 507 of 2020, obliging the closure of commercial establishments, with certain exceptions.

While it is true, some companies took teleworking measures, others due to the nature of their functions, were not able to take advantage of this practice and were forced to close temporarily. This is why through Executive Decree No. 81 of 2020, the Ministry of Labor regulates numeral 8 of article 199 of the Labor Code. Said decree establishes that both the existence of the pandemic and the Declaration of a State of National Emergency can be considered as force majeure or fortuitous event as established in numeral 8 of article 199 of the Labor Code.

The suspension is temporary and has a finite nature, with the possibility of suspending the worker for a period of one week to one month and, successively, for periods of 30 days until completing a maximum period of four months.

Basically, the main effect of the suspension implies that the worker does not have the obligation to offer his work to the company, and the employer is not forced to pay the worker salary. The suspension will not affect the computation of the worker’s seniority, and he must return to his job the day after the end of the declaration of the state of national emergency. In the event that the employer prevents the reinstatement of the worker, this will be considered an unjustified verbal dismissal. The suspension of contracts must be requested before the General Directorate of Labor, and during this time it may be requested electronically. The Ministry of Labor must respond to said request to the employer within a period of three days, if the approval or denial of the request is not answered, it will be understood as granted.

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