The relationship between employer and employee in Colombia is regulated by a system that allows for various contractual arrangements, adapted to the specific needs of the service, the duration, and the purpose of the contract. The recently introduced labor reform proposes significant changes that will impact hiring practices and job security.
Current forms of employment contracts
According to the Substantive Labor Code (CST), there are various forms of employment contracts:
- Fixed-term contract (Art. 46 CST): Establishes a precise date for the termination of the employment relationship.
- Indefinite term contract (Art. 45 CST): It has no end date and is the most stable form.
- Contract for work or labor (Art. 47 CST): Related to the execution of a specific job whose time is usually uncertain.
- Temporary, occasional or accidental contracts: These are used to cover temporary or sporadic needs within the company.
Contracts can be made verbally or in writing, both of which are valid according to the CST, provided that the existence of the employment relationship is evident.
Proposed changes in labor reform
The labor reform seeks to strengthen job stability and modify hiring rules, especially regarding fixed-term contracts:
- It is proposed that the indefinite-term contract be the general rule in all sectors, public and private, limiting traditional contractual freedom.
- Fixed-term contracts may not be used for permanent activities within the company. Furthermore, the reason justifying this type of contract and its relation to the expected duration must be specified. Failure to provide this information will result in the contract being considered indefinite.
- If the type of contract is not expressly stipulated in writing, it will be understood to be for an indefinite term, reinforcing the protection of the worker.
These modifications imply greater rigor in the contractual structuring, requiring precision in the clauses regarding functions, duration, obligations and characteristics of the work.
Legal basis
- Articles 45 and 46 of the Substantive Labor Code: They regulate indefinite term and fixed term contracts respectively, determining the conditions for their celebration and termination.
- Political Constitution of Colombia (Art. 53): Recognizes the right to work and job stability, key principles that underpin these reforms.
- Law 789 of 2002 and complementary regulations: They regulate specific aspects of contracting and seek to promote formal employment.
Implications for employers and workers
- Companies must review and adjust their contracts to avoid future penalties and claims, ensuring that the hiring is adapted to the actual nature of the contracted work.
- It will be necessary to train business owners, managers, and human resources directors to understand and correctly apply the new provisions and contractual modalities.
- Expert advice is vital for the correct implementation of new work schemes and to resolve any resulting contingencies.
Specialized legal services
At Páez Martin, we have expert professionals in labor law to offer:
- Advice on contractual modalities and their correct structuring.
- Support in hiring processes, sanctions and dismissals in all their forms.
- Implementation of internal regulations and management of complex labor relations.
This reform will be a challenge for companies, but with proper guidance they can transform their practices and achieve stronger labor relations, complying with current regulations and strengthening their human talent management.
