Employment and employee benefits in Colombia: overview | Practical Law

Employment and employee benefits in Colombia: overview | Practical Law

A Q&A guide to employment and employee benefits law in Colombia.

Employment and employee benefits in Colombia: overview

Practical Law Country Q&A 7-503-1696 (Approx. 23 pages)

Employment and employee benefits in Colombia: overview

by Catalina Santos Angarita, Brigard & Urrutia (member of Ius Laboris)
Law stated as at 01 Sep 2014Colombia
A Q&A guide to employment and employee benefits law in Colombia.
The Q&A gives a high level overview of the key practical issues including: employment status; background checks; permissions to work; contractual and implied terms of employment; minimum wages; restrictions on working time; illness and injury; rights of parents and carers; data protection; discrimination and harassment; dismissals; redundancies; taxation; employer and parent company liability; employee representation and consultation; consequence of business transfers; intellectual property; restraint of trade agreements and proposals for reform.
To compare answers across multiple jurisdictions, visit the Employment and Employee Benefits Country Q&A tool.
The Q&A is part of the Multi-jurisdictional Guide to Employment and Employee Benefits law. For a full list of jurisdictional Q&As visit www.practicallaw.com/employment-mjg.

Scope of employment regulation

1. Do the main laws that regulate the employment relationship apply to:
  • Foreign nationals working in your jurisdiction?
  • Nationals of your jurisdiction working abroad?

Laws applicable to foreign nationals

Foreign nationals have the same rights and obligations as Colombian employees. However, when a foreign national enters into an employment contract in Colombia, both the employer and foreign national must meet additional requirements under the administrative procedures of the Ministry of Foreign Affairs concerning:
  • Entry of the foreign national into Colombia.
  • Supervision of the foreign national's stay in Colombia (see Question 5).
If a foreign company hires an employee in Colombia and the contract is executed in Colombia, the contract must follow the same rules as those that apply to domestic Colombian companies.
If a labour relationship is conducted in Colombia, Colombian rules apply, regardless of the employer's origin and where the contract was executed.

Laws applicable to nationals working abroad

The following regulations apply to nationals working abroad when their labour relationship is maintained with a Colombian employer:
  • National Constitution.
  • Labour Code.
The laws applicable to nationals working abroad depend on whether the:
  • Employer is in Colombia.
  • Employee is held accountable in Colombia because of an employment relationship maintained in Colombia.
Colombian law might not be applicable to Colombian nationals that are hired abroad by foreign companies if, for example, the employee is not rendering his services in Colombia.

Employment status

2. Does the law distinguish between different categories of worker? If so, what are the requirements to fall into each category, the material differences in entitlement to statutory employment rights and are there any maximum time periods for which each category of worker can be engaged?

Categories of worker

Under Colombian law, individuals can provide the following categories of services:
Services under an employment agreement. An employment agreement is a contract under which a person agrees to render their personal services to an employer (an individual or a company). It is characterised by the employee's subordination to the employer, and their receipt of periodical payments in exchange for the provision of services.
Services provided by Temporary Employment Agencies (TEAs). Temporary Employment Agencies are companies that provide personnel on a temporary basis to companies to assist in the company's development. Even though the user company benefits from the services provided through "mission employees", those employees are not dependent on the company using the services and have no relationship of subordination with the company. The provider is truly independent and autonomous in the performance of their services.
Outsourced services. Companies can receive personal services from employees by means of outsourcing. Where this is the case, the outsourcing company and the company to which the services are outsourced will complete a service agreement. For all legal purposes, the company which carries out the outsourced services is the sole employer, and is therefore responsible for all legal labour obligations with the employees that provide their services. The company to which the services are outsourced is not allowed to give orders relating to the mode, time or quantity of the work either to the company from which the services are outsourced, or to its employees.
Services from independent contractors. A company can execute a service agreement with an individual who works as an independent contractor. However, it must be clearly established that the performance of the contract will be carried out with technical and administrative autonomy, under the account and risk of the contractor, and therefore without a relationship of dependence or subordination to the hiring company.

Entitlement to statutory employment rights

Statutory employment rights only apply to services provided under an employment agreement.

Time periods

Labour contracts can be classified according to their duration, as follows:
  • Indefinite term. The duration depends on the subsistence of the causes that originated the employment relationship, and the scope of the work to be performed.
  • Fixed term. The parties establish a term for the duration of the contract, which cannot exceed three years and must be in writing. There are two types of fixed-term labour contracts: those of less than a year and those of between one and three years. Contracts for less than a year can only be renewed for three equal or lesser terms. If a new renewal is required, the term can not be for less than one year. Contracts that are between one and three years can be renewed indefinitely, but it will never become an indefinite-term labour contract.
  • For the time required to complete the assigned task. The duration of the work period is not defined by the parties. Rather, it depends directly on the period of time it takes to complete the work assigned under the contract.
  • Occasional, accidental or transitory. This type of contract is appropriate where the work to be completed falls outside of the scope of activities usually undertaken by the company, where its duration is less than one month.
There is no maximum legal duration set out under Colombian labour legislation (other than the limits mentioned above).

Recruitment

3. Are any grants or incentives available for employing people? Does any information/paperwork need to be filed with the authorities when employing people?

Grants or incentives

Most incentives for employing people are related to social taxes. These benefits are granted to employers when hiring persons who are, among others:
  • Handicapped.
  • Disabled.
  • Under 28 years old.
  • From the military.
  • Women over 40 years old.
Employers that hire new employees under 28 years old, women over 40 years old, handicapped people or people that are in situations of displacement or reintegration to society are able to deduct amounts paid for payroll fees from their taxes (Law 1429 of 2010). Payroll fees are an additional contribution that companies are obliged to pay to certain welfare entities, which amount to 9% of the company's payroll. Such deductions apply for two or three years as of the moment in which they hire the new employee, depending on which of the conditions mentioned above is the one fulfilled by the employee hired.
In addition, other incentives are available to employers if disabled employees comprise more than 10% of their total workforce. Benefits include (Law 361 of 1997):
  • Preferential treatment in public contracting.
  • Tax deductions.

Filings

There are no filings that need to be made directly with the authorities when hiring a new employee.

Background checks

4. Are there any restrictions or prohibitions on carrying out background checks in relation to applicants?
In Colombia companies can review the background records of new applicants, provided that they have the applicant's express consent. Under Colombian labour laws, employers cannot withdraw an offer of employment based on the outcome of the background checks of a candidate.

Permission to work

5. What prior approvals do foreign nationals require to work in your country? What information/paperwork needs to be kept or filed with the authorities when they start work?
The prior approvals that a foreign national requires to work in Colombia are either a TP-4 visa or an NE visa and a professional permit (temporary professional licence, permanent professional card or a non-necessity certificate). The visas and permits are commonly used by multinationals in order to allow their executives to enter the country so that they can conduct business activities.

TP-4 visa (temporary work visa)

Procedure for obtaining approval. This visa is issued to foreign nationals intending to work in Colombia who are employed by companies established or domiciled in Colombia. It has a duration of three years and can be renewed for a further two years. This visa can be lost if the person to whom the visa applies is absent from the country for more than 180 days. It must be renewed before its expiry date, so that the applicant's permanence in the country is not lost. It is applicable to foreign nationals who:
  • Are hired by local companies to develop activities in their specific field, such as technicians, journalists, people from art groups and legal representatives, amongst others.
  • Are appointed by a government department or entity.
  • Are managers, technical or administrative staff of foreign private or public entities and have been transferred from abroad to assume specific posts in the company.
An online or personal application can be filed before the Colombian Ministry of Foreign Affairs, either before a Colombian Consulate abroad or before the Visas Coordination Division in Bogotá.
In strictly regulated areas, foreign nationals must obtain approval from the Professional Councils responsible for regulating their respective professions. This is achieved through certificates, issued by the Professional Council, that validate the workers' qualifications.
Foreign nationals must register at the Migration Authority "Migración Colombia" within 15 days of entering Colombia, if using any type of visa issued for a term exceeding three months. Migración Colombia then issues a foreign national's identity card, which expires at the same time as the foreign national's visa. If the foreign national does not register with Migración Colombia within 15 days, the foreign national may be subject to financial penalties by Migración Colombia and the visa could be cancelled. The employer must also inform Migración Colombia about any foreign national employees within 15 days of the employee's arrival and within 15 days of the termination of the labour relationship.
Cost. The administration costs US$50, and the visa itself costs US$245 (this must be paid in Colombian pesos).
Time frame. It usually takes between 30 and 40 business days.
Sanctions. A violation of Colombian immigration law enables the Director of Migración Colombia to impose financial penalties in accordance with the law in order to ensure that immigration laws are upheld. Penalties can range from between one month's to 15 month's salary at the minimum wage. A foreign national not abiding by immigration law can also be deported from Colombia.

NE visa (previously called the Business Visa)

Procedure for obtaining approval. The NE visa (previously called the Business Visa) is now divided into four categories (NE-1 to NE-4). NE-1 and NE-4 visas are the most commonly used.
The NE-1 visa can be granted for up to three years and the NE-4 visa for up to five years (although both are typically granted for one year), and they allow multiple entries, allowing for a maximum stay of 180 days in the country (for either continuous or discontinuous days). If an individual remains in the country beyond the authorised length of stay the visa is rendered invalid.
The following people (among others) can apply for an NE visa:
  • Traders, manufacturers or individuals with business interests in Colombia or who are interested in establishing a commercial presence in Colombia.
  • Legal representatives, officers, directors or executives of foreign companies, if specific conditions regarding their interests are met.
  • People visiting Colombia as the head, representative or member of a foreign governmental trade office that promotes economic and trade activities with Colombia.
Possession of an NE-1 or NE-4 visa does not allow the holder to establish a permanent residence in Colombia, nor will they be entitled to receive a salary/wages of any kind while in Colombia.
An online or personal application can be filed before the Colombian Ministry of Foreign Affairs, either before a Colombian Consulate abroad or before the Visas Co-ordination Division in Bogotá.
Cost. This depends on the type of visa, though an NE-1 visa has administration costs of US$50, while the visa itself costs US$370 (which must be paid in Colombian pesos).
Time frame. It usually takes about 20 business days.
Sanctions. A violation of Colombian immigration law enables the Director of Migración Colombia to impose financial penalties in accordance with the law in order to ensure that immigration laws are upheld. Penalties can range from between one month's to 15 month's salary at the minimum wage. A foreign national not abiding by immigration law can also be deported from Colombia.

Permits

Procedure for obtaining approval. In accordance with Colombian immigration laws, citizens of more than 80 countries are called "non-restricted nationality foreigners". Foreign nationals with nationalities not included in the list of non-restricted nationality countries must request a Visitor Visa from the Colombian Consulate abroad in order to enter the Colombian territory. Article 1 of Resolution 5707, issued by the Ministry of Foreign Affairs on 5 November 2008, establishes that nationals of the following countries do not require a visa for short trips to enter and remain temporarily in Colombian territory: Germany, Andorra, Antigua and Barbuda, Argentina, Australia, Austria, Azerbaijan, Bahamas, Barbados, Belgium, Belize, Bolivia, Brazil, Brunei-Darussalam, Bhutan, Canada, Czech Republic, Chile, Cyprus, Vatican City, South Korea, Costa Rica, Croatia, Denmark, Dominica, Ecuador, El Salvador, United Arab Emirates, Slovakia, Slovenia, Spain, United States of America, Estonia, Fiji, Philippines, Finland, France, Georgia, Grenada, Greece, Guatemala, Guyana, Honduras, Hungary, Indonesia, Ireland, Iceland, Marshall Islands, Solomon Islands, Israel, Italy, Jamaica, Japan, Kazakhstan, Latvia, Liechtenstein, Lithuania, Luxemburg, Malaysia, Malta, Mexico, Micronesia, Monaco, Norway, New Zealand, The Netherlands, Palau, Panama, Papua New Guinea, Paraguay, Peru, Poland, Portugal, United Kingdom of Great Britain and Northern Ireland, Czech Republic, Dominican Republic, Romania, Russia, Saint Kitts and Nevis, Samoa, San Marino, Saint Lucia, Saint Vincent and the Grenadines, Singapore, South Africa, Sweden, Switzerland, Suriname, Trinidad and Tobago, Turkey, Uruguay and Venezuela. Additionally, Resolution 0928 of March 2009 establishes that citizens of Russian nationality that wish to enter Colombia do not require a visa.
Citizens of these countries are not required to carry out any prior activities with the Colombian authorities abroad in order to enter in the Colombian territory so long as the purposes of their trip are the same as the description of the visa's categories: TP-11, TP-12 and TP-13 according to Decree 834 2013. In accordance with Colombia immigration laws, after arrival at the airport in Colombia officers from Migración Colombia will grant the visitor a 90-day term, which can be renewed for an extra 90 days for a maximum cumulative period of 180 days within the same year. The following are the most common entry permits issued to visitors:
  • PIP-6. It is recommend to foreign national travellers to hold an invitation or sponsorship letter from either their current employer or an entity in Colombia willing to sign such letter. Upon arrival they should state the purpose of their visit as business, and the proper entry permit will be stamped on their passports.
  • PIP-7. This permit is granted for a foreign national who needs to urgently arrive to the country in order to perform a technical activity, and the company must prepare a letter written to the Colombia Migration Special Administrative Unit (Migración Colombia) justifying the urgency of the trip to perform technical work. The technical entry permit is issued for 30 days and cannot be renewed. Additionally, technical entry permits are only granted for a maximum of 30 days within one year.
Cost. The temporary visitor entry permit and the technical entry permit have no costs.
Time frame. A Technical Entry Permit takes up to three business days to obtain.

Restrictions on managers and directors

6. Are there any restrictions on who can be a manager or company director?

Age restrictions

There are no age restrictions on who can be a manager or a company director.

Nationality restrictions

There are no nationality restrictions on who can be a manager or a company director.

Other

There are no other restrictions applied to managers or company directors.

Regulation of the employment relationship

7. How is the employment relationship governed and regulated?
Labour relationships in Colombia are governed by the Constitution and the Labour Code, as well as other public regulations. Employment agreements and collective bargaining agreements also govern labour relationships and can grant better conditions than the ones established by the law.

Written employment contract

For an employment contract to exist, the following elements must be present:
  • The employee must perform the work personally.
  • The employee continues to be subordinate with respect to the employer.
  • A salary that remunerates the employee for his services.
No special formalities are required.
However, fixed-term employment agreements must be agreed in writing. Otherwise, it will be implied that the agreement is for an indefinite term (see below, Implied terms).
In addition, any special clauses should be agreed in writing, such as the:
  • Probationary period.
  • Salary.
  • Causes for fair termination (other than those specified by law).

Implied terms

If the aforementioned elements of an employment contract are present a labour relationship agreement is presumed.

Collective agreements

There is decentralised bargaining in Colombia, and so collective bargaining agreements are only negotiated at a company level.
The largest and most influential unions in Colombia are controlled by public employees, particularly in the state-owned oil industry, and the health and education sectors. However, there is not a strong labour union culture and only around 4% of the country's total labour force belongs to labour unions.
The right of collective bargaining is protected by the:
  • Colombian Constitution.
  • Labour Code.
Collective agreements determine the conditions that will govern the labour contracts during their terms, between:
  • One or more employers or employers' associations.
  • One or more unions or union federations.
Collective agreements must be executed in writing, and must be registered with the National Labour Department within 15 days of the agreement's signature, otherwise the collective agreement will not be enforceable.
Collective bargaining agreements with non-unionised employees are governed by the same provisions of the collective bargaining agreement and are agreed between:
  • Employers.
  • Non-unionised workers.
The collective agreement only applies to those who sign the agreement or subsequently adhere to it.
The parties mentioned above may only enter into collective agreements in companies where the union members do not represent more than one third of the total number of employees on the payroll.
In companies in which the collective bargaining agreement is signed with a union that has more than one third of the payroll employees of the company, this collective agreement will cover all the company employees.
8. What are the main points to consider if an employer wants to unilaterally change the terms and conditions of employment?
As an expression of continued subordination to the employer (ius variandi), the employer can:
  • Give orders and instructions at any time.
  • Change the employee's working conditions.
However, the power of subordination is limited by the Colombian Constitution, which guarantees basic minimum principles for decent working conditions.
Therefore, before making any unilateral modifications to an employee's working conditions, the employer must take certain aspects into account, such as the employee's:
  • Family situation.
  • Health.
  • Place and time of work.
The employer can unilaterally make changes or transfer the employee, provided the modification complies with the following:
  • There is no reduction of salary.
  • The employee's general labour conditions and minimum rights are not lessened.
  • The decision does not cause any damage to the employee.

Minimum wage

9. Is there a national (or regional) minimum wage?
The monthly minimum legal wage for 2014 is COP616 per month, which applies to all employees that work the maximum legal hours.
However, mandatory overtime pay applies, depending on whether the work is carried out at night time or on national holidays (see Question 10, Working hours).

Restrictions on working time

10. Are there restrictions on working hours? Can an employee opt out on either an individual or collective basis?

Working hours

Working hours are limited to 48 hours per week (eight hours per day), for a maximum of six days per week.
However, with authorisation from the Ministry of Labour, an employee can work up to 12 hours of overtime per week, provided employees are permitted to rest during Saturday.
Working hours are divided into either:
  • Daytime work. Work performed between 6.00 am and 10.00 pm. Overtime work performed during daytime hours is compensated at a rate of 25% higher than the employee's normal daytime salary. Daytime overtime work is compensated with an additional salary of 25% for every extra daytime hour worked.
  • Night-time work. Work performed between 10.00 pm and 6.00 am. Night-time work should be compensated at a rate 35% higher than the employee's daytime rate. Overtime work performed during night time is compensated with a 75% increase on the value of the employee’s daytime hour rate.

Rest breaks

The labour hours in each day of work must be distributed in at least two sections. The employer must grant the employees a rest break that is consistent with the nature of the labour that is being performed, and the needs of the employees.

Shift workers

To achieve continuous business activities, employers and employees can adopt special shifts, such as the ones stated below:
  • Six hours per day over six days (36 hours per week). The six-hour shifts are worked without a break and no night time or overtime salary applies. The minimum wage must be respected and employees must receive one day of compensatory rest per week.
  • 48 hours over six days per week, with one mandatory rest day. The 48 weekly hours can be distributed with a minimum of four continuous hours and a maximum of ten working hours per day, without overtime salary.
  • Where the business activity may be periodical, the law permits working more than eight hours a day, or even more than 48 hours a week, provided the average time calculated for three consecutive weeks is not above 48 hours of work per week.
  • In activities that must be continuous because of their nature, the law allows employees to work in successive shifts, provided every employee does not work more than 56 hours per week.

Holiday entitlement

11. Is there a minimum paid holiday entitlement?

Minimum holiday entitlement

The minimum holiday entitlement per year is 15 days.

Public holidays

Sundays and national holidays are mandatory rest periods. Employees are generally not obliged to perform services on these days but can still receive salary. The public holidays in Colombia are as follows:
  • 1 January.
  • 6 January.
  • 19 March.
  • 1 May.
  • 29 June.
  • 20 July.
  • 7 August.
  • 15 August.
  • 12 October.
  • 1 November.
  • 11 November.
  • 8 December.
  • 25 December.
  • Thursday and Friday of Holy Week.
  • The Ascent of Jesus.
  • Corpus Christi.
  • Sacred Heart.
  • Five religious holidays.
Public holiday entitlement is in addition to annual leave. If the employer requests the employee to work on public holidays, it must pay 150% of the rate for an ordinary working hour.

Illness and injury of employees

12. What rights do employees have to time off in the case of illness or injury? Are they entitled to sick pay during this time off? Who pays the sick pay and, if the employer, can it recover any of the cost from the government?

Entitlement to time off

An employee is entitled to time off in the case of illness or injury, if he presents a medical certificate to his employer.

Entitlement to paid time off

According to decree 2943 of December 2013, employees that suffer from illness receive 66.67% of their salary from their employer for the first two days of absence from work. From the third day onwards (for a period not exceeding 180 days) compensation is received directly from the General Health Social Security System (Sistema General de Seguridad Social (SGSS)) for the same percentage of the salary.
However, the Social Security Risk System (Aseguradora de Riesgos Profesionales (ARP)) (that is, a subdivision of the SGSS) must pay the employee 100% salary for the period of absence from work, where the illness/injury either:
  • Due to a work-associated accident.
  • Results from a work-associated disease.

Recovery of sick pay from the state

Statutory rights of parents and carers

13. What are the statutory rights of employees who are:
  • Parents (including maternity, paternity, surrogacy, adoption and parental rights, where applicable)?
  • Carers (including those of disabled children and adult dependants)?

Maternity rights

Female employees are entitled to maternity leave for a total 14 weeks. Two of these weeks must be taken before the expected date of birth and the other 12 weeks after the child is born.
Nevertheless, the female employee can choose to use only one week prior to the expected date of birth, and have 13 weeks after the child is born.
If there is a multiple birth, the mother will be granted two additional weeks of maternity leave. In addition, for a premature birth, the mother will be granted 14 weeks leave from the estimated date of birth. Therefore the mother will have 14 weeks leave in addition to the time taken prior to the expected date of birth.
Where the salary is not fixed, remuneration during maternity leave will be calculated on the average of the salaries the mother was paid during the last year of service. If the contract has been for less than a year, the complete period worked will be taken into account when calculating the average.
In order to be granted this maternity leave, the employee must present a medical certification that:
  • States how many months pregnant the employee is.
  • Indicates the anticipated date of birth.
  • Indicates the starting date of the maternity leave.
Female employees with a breastfeeding infant up to six months of age will be granted two obligatory 30-minute feeding periods during the work day.
Provided all the requirements are met the SGSS must pay 100% salary during the maternity leave (Law 1468 of 2011).

Paternity rights

A father is entitled to eight working days of paid paternity leave, covered by the employee's health insurance company (Law 755 of 2002).

Surrogacy

Surrogacy is not regulated under Colombian law.

Adoption rights

The same rights regarding paternity and maternity leave are applicable in cases of adoption. However, in the case where the father is the only adopting parent, he will have the same rights as a mother (see above, Maternity rights).

Carers' rights

Colombian law does not specifically address the rights of carers.
However, when emergency care is required for a dependant, a spouse or a close family member, the employee may ask for a leave of absence.

Continuous periods of employment

14. Does a period of continuous employment create any statutory rights for employees? If an employee is transferred to a new entity, does that employee retain their period of continuous employment? If so, on what type of transfer?

Statutory rights created

Continuous periods of employment do not create benefits in favour of employees.

Consequences of a transfer of employee

In an employer substitution the new employer assumes the obligations arising under the previous employer's labour contracts, and all terms and conditions of employment are preserved, including any seniority rights.
The employee retains his or her period of continuous employment. However, if the employee agrees to terminate his or her employment contract with the previous employer, and execute a new labour contract with the new employee, an employer substitution does not take place.

Fixed term, part-time and agency workers

15. To what extent are temporary and agency workers entitled to the same rights and benefits as permanent employees? To what extent are part-time workers entitled to the same rights and benefits as full-time workers?

Temporary workers

Temporary employment agencies services (TEAS) and outsourcing companies are the employers of temporary and agency workers.
In Colombia, it is only possible to hire temporary workers through TEAS in the following cases:
  • When the labour to be performed is occasional, accidental or transitory.
  • When the person is hired to replace personnel.
  • When the person is hired to respond to increases in production, sales, transport needs, or in harvesting seasons or seasons of special needs in the rendering of services. This type of contract is valid for six months, and can be renewed for a further six months.
The TEAS and outsourcing companies must comply with Colombian labour legislation regarding the temporary or agency workers.
If the TEAS or outsourcing company do not fully comply with these stipulations, the receiving company may be deemed as the real employer and therefore liable for obligations regarding salaries and social security, among others.
TEAS agency workers are entitled to both:
  • A salary equivalent to their colleagues who perform the same activity.
  • All the extra legal benefits that the end user has established regarding entertainment, nourishment and transportation (among others).

Agency workers

See above, Temporary workers.

Part-time workers

Part-time work does not justify less favourable treatment. The salary must be proportional to the hours worked.

Data protection

16. Are there any requirements protecting employee privacy or personal data? If so, what are an employer's obligations?

Employees' data protection rights

It is usual in Colombia for companies to review background records of new applicants for employment purposes. However, current employee reviews must follow a particular drive (such as promotions or loans). Any information concerning commercial and financial content, medical records or any personal data is restricted. Accordingly, if the employer requires this information, written consent must be given by the employee (see Question 4).

Employers' data protection obligations

Enacted legislation regarding data protection establishes a prohibition on the transfer or disclosure of any personal data without proper authorisation. Penalties apply when data protection regulations are violated.

Discrimination and harassment

17. What protection do employees have from discrimination or harassment, and on what grounds?

Protection from discrimination

The Constitution and Colombian labour law prohibits any form of discrimination. The following characteristics are expressly protected by law:
  • Sexual orientation.
  • Gender.
  • Age.
  • Race.
  • Religion.
  • Family status.
  • National origin.
  • Military status.
  • Disability.
based on gender, family origin, age, language, ethnicity, religion, disability or gender orientation.

Protection from harassment

Labour harassment is defined as persistent and demonstrable conduct taken against an employee by a co-worker, superior or boss, with the purpose of generating fear, intimidation, terror and anguish, or of inducing that employee's resignation (Law 1010 of 2006).
Harassment generally includes any conduct capable of offending or threatening dignity, life, physical integrity or sexual freedom.
Every company must include preventative and corrective measures against harassment.
Nonetheless, employees who have been harassed may file a complaint before the Ministry of Labour, which can be enforceable up to three years after the occurrence of the harassment.

Whistleblowers

18. Do whistleblowers have any protection?
Companies must have an internal process for reporting, preventing and addressing labour harassment (Law 1010 of 2006). A special committee must investigate and inform the company of the necessary measures taken.
The internal procedure must be confidential and the whistleblower is protected. The employer cannot terminate the employment agreement of the whistleblower during both the (Article 11, Law 1010 of 2006):
  • Course of the investigation.
  • The following six months after the investigation.

Termination of employment

19. What rights do employees have when their employment contract is terminated?

Notice periods

Either party can terminate the labour agreement unilaterally, without cause and prior notice. However, the terminating party is responsible for indemnifying the damage, which includes consequential damages and loss/reduction of remuneration caused.
Under a fixed-term contract, the employer should notify the employee 30 days before the termination of the contract, to avoid its automatic renewal on the same terms.
Additionally, under some of the clauses for termination with just cause, the employer is obligated to give 15 days' notice prior to the termination of the employment contract (Article 70 of Decree 2351 of 1965).

Severance payments

Severance payments are structured as follows:
  • Fixed-term contracts. The severance payment corresponds to the salary due for time remaining until the end of the fixed term.
  • Contract for the duration of the performance of the work. This applies to work where there is no fixed term of employment and work continues until the duty/work is completed. In this case, the severance payment corresponds to the expected duration of the duty or contracted work and must not amount to less than 15 days' pay.
  • Indefinite term contract. Where the term of employment is indefinite (ongoing), the severance payment depends on the employee's salary and years of service. It is calculated as follows:
    • employees with salaries that are less than ten times the minimum legal wage: these receive 30 days' salary if they have one complete years' service and 20 additional days' salary for each subsequent year, pro rata;
    • employees with salaries equal to or above ten times the minimum legal wage: these receive 20 days' salary if they have one year or less than one year of service and 15 additional days' salary for each subsequent year, pro rata;
    • employees with ten or more years as of 27 December 2002: these receive 45 days of salary for the first year, plus 40 additional days for each subsequent year, pro rata;
    • employees with ten or more years of service as of 1 January 1991: these have the right to be restored to the previous position. In the case of dismissal, if a court finds reinstatement impossible or unadvisable, the employer must pay 45 days' salary for the first year and 30 days' salary for the additional years.

Procedural requirements for dismissal

Every employment relationship allows the parties to terminate the labour agreement unilaterally without cause and prior notice (see above, Notice periods). However, if an employer unilaterally terminates an employment agreement, they must begin a disciplinary action to guarantee the employee's right of defence and due process. If this process is not performed, it can be concluded that the contract was terminated without just cause and that the employer must pay the corresponding compensation.
If an employee is dismissed and the employer does not pay the employee the salary or benefit sums owed in due time, the employer must pay an indemnity which corresponds to one day's pay for every day of delayed payment (for a period of two years from the day on which the right accrued). If the sums due are not paid within 24 days, by the beginning of the 25 day, the employer will be obliged to pay the current banking interest (19.33% for 2014) in addition to the default indemnity, until the sum is fully paid.
20. What protection do employees have against dismissal? Are there any specific categories of protected employees?

Protection against dismissal

Authorisation from the Ministry of Labour is required for:

Protected employees

Persons with disabilities and women who are pregnant or on maternity leave have employment protection, for example, they cannot be dismissed or relocated by their employer without due cause and judicial authorisation.
Additionally, there are some special protections that are granted to members of unions, as a consequence of the protection of the right to form unions which is expressly provided in the Constitution.

Redundancy/layoff

21. How are redundancies/layoffs defined, and what rules apply on redundancies/layoffs? Are there special rules relating to collective redundancies?

Definition of redundancy/layoff

A layoff is deemed collective if a specific number of employees with a labour agreement from the total workforce are affected, during a term of six months or less (see below, Collective redundancies). When an individual employee is made redundant by the employer, the employer must pay all labour obligations that arise from the dismissal.

Procedural requirements

If a company intends to dismiss a percentage of employees that exceeds the percentage permitted under Colombian law (see below, Collective redundancies), it must file an authorisation before the Ministry of Labour. If this authorisation is not filed:
  • The dismissals have no effect.
  • The employees must be remunerated for any unpaid salary that is owed to them.
However, the Ministry of Labour's authorisation does not release the employer from its obligation to pay the indemnity or severance that is owed to each dismissed employee for termination without reasonable grounds.

Redundancy/layoff pay

Collective redundancies

A layoff is deemed collective if, during a term of six months or less, the redundancies affect more than the following numbers of employees:
  • 30% of the workforce, where the number of payroll employees is between 11 and 49.
  • 20% of the workforce, where the number of payroll employees is between 50 and 99.
  • 15% of the workforce, where the number of payroll employees is between 100 and 199.
  • 9% of the workforce, where the number of payroll employees is between 200 and 499.
  • 7% of the workforce, where the number of payroll employees is between 500 and 999.
  • 5% of the workforce, where the number of payroll employees is 1,000 or more.

Employee representation and consultation

22. Are employees entitled to management representation (such as on the board of directors) or to be consulted about issues that affect them? Is employee consultation or consent required for major transactions (such as acquisitions, disposals or joint ventures)?

Management representation

Employees can be members of the board of directors.

Consultation

The employer is not required to consult its employees on company decisions.

Major transactions

The approval of employees is not required unless otherwise stated in the company's byelaws.
23. What remedies are available if an employer fails to comply with its consultation duties? Can employees take action to prevent any proposals going ahead?

Remedies

This is generally not applicable.

Employee action

See above, Remedies.

Consequences of a business transfer

24. Is there any statutory protection of employees on a business transfer?

Automatic transfer of employees

In a business transfer, employees are automatically transferred (see Question 14).
After an employer substitution, the continuity of an employee's employment contract is protected whenever:
  • A company has a major change regarding its property or administration.
  • There is no substantial variation in the company's activities or business.

Protection against dismissal

There is no special protection in relation to dismissals. Regular protection applying to dismissals with or without legal justification applies (see Question 20).

Harmonisation of employment terms

Harmonisation of employment terms is not mandatory.
Nonetheless, it must be taken into account that in the case that there are some employees of the new company working with employees that have been transferred, conditions between them should be equal. Harmonisation may be demanded by employees.

Employer and parent company liability

25. Are there any circumstances in which:
  • An employer can be liable for the acts of its employees?
  • A parent company can be liable for the acts of a subsidiary company's employees?

Employer liability

An employer is only liable for the actions of its employees if the employees commit the actions while performing their duties.

Parent company liability

A parent company is not liable for the actions of the subsidiary’s employees because they are independent entities. Parent companies are never responsible for the actions or debts of the subsidiary, except where the subsidiary's acts were influenced by the parent company.

Employer insolvency

26. What rights do employees have on the insolvency of their employer? Is there a state fund which guarantees repayment of certain employment debts?

Employee rights on insolvency

Once the company enters insolvency proceedings employee credit prevails above third party and tax obligations.

State guarantee fund

There is no fund set aside to safeguard employment debts in the case of employer insolvency.

Health and safety obligations

27. What are an employer's obligations regarding the health and safety of its employees?
Employers are responsible for the safety of their employees when at work. Employers must develop an occupational health programme. To maintain and improve health and safety at work, every employer must adopt, among others, the following measures (Law 9 of 1979):
  • Installation of evacuation signals in open areas, entrances, exits and stairs.
  • Wide and clear stairways and corridors.
  • Permanent supervision of activities in areas where chemicals, food, flammable or hazardous materials, or combustibles, are stored or handled.
  • Monitoring the proper operation and maintenance of electrical control systems.
  • Monitoring the location, accessibility and required nature of fire extinguishers, ensuring staff are trained for their appropriate use.
  • Maintaining warning signs.
  • Monitoring the availability and content of first aid kits.
Hygiene and Industrial Safety Regulations are an obligation for companies that have more than ten permanent employees.
In addition, every employer must:
  • Supply its employees with all necessary equipment to perform their job.
  • Ensure that working facilities are maintained so that employees can perform their tasks in a good working environment and preserve their health.
  • Require medical examinations of their employees at the point of hire, during the labour agreement, and also on the termination of employment.

Taxation of employment income

28. What is the basis of taxation of employment income for:
  • Foreign nationals working in your jurisdiction?
  • Nationals of your jurisdiction working abroad?

Foreign nationals

Foreign nationals and nationals working abroad must comply with the following Colombian tax laws regarding employment income:
  • Foreign nationals (and nationals working abroad) who are not considered tax residents for Colombian tax purposes are subject to income tax only on their Colombian source income and Colombian held equity. Colombian source income derives, among other sources, from the provision of services within the Colombian territory.
  • Foreign nationals (and nationals working abroad) who are considered as Colombian residents for Colombian tax purposes are subject to income tax on their worldwide income and worldwide held equity.
Special rules may apply in accordance with any applicable double tax treaties.
A foreign national is considered as resident in Colombia if they stay in Colombia for more than 183 calendar days within any given 365 consecutive-day term.

Nationals working abroad

A national working abroad who is not considered resident in Colombia for tax purposes is subject to income tax only on their Colombian source income and Colombian held equity. A national working abroad who is considered resident in Colombia is subject to income tax on their worldwide income and worldwide held equity. A national is considered as resident in Columbia if they meet any of the following criteria:
  • Stays in Colombia for more than 183 calendar days within a year.
  • Is in service with the Colombian State or Government in a foreign state in which that person is exempt from taxes.
  • Has a spouse or permanent companion, or dependent children, who are residents of Colombia.
  • 50% or more of their total income is sourced in Colombia.
  • 50% or more of their assets are managed in Colombia.
  • 50% or more of their assets are deemed to be located in Colombia.
  • Has failed to provide proof of residency in another country upon previous official request by the Colombian tax office.
  • Is a resident of a country deemed as a tax heaven under Colombian law.
29. What is the rate of taxation on employment income? Are any social security contributions or similar taxes levied on employers and/or employees?

Rate of taxation on employment income

The rate of taxation on employment is between 0% and 33% and depends directly on:
  • The amount of the salary.
  • Other earnings received by the employee, including all fringe benefits (except for severance and the interest on the severance).
  • Whether the employee is considered as a tax resident or not.

Social security contributions

Social security contribution amounts are calculated as follows:
  • Pension contributions: the employer contributes 12% of his salary and the employee contributes 4%.
  • Healthcare: the employer contributes 8.5% of his salary and the employee contributes 4%. Healthcare contributions are made to the SGSS.
  • Risk: the employer contributes between 0.348% and 8.7% of the total amount of the employee's salary depending on the exposed risk. Contributions are made to the General Professional Risks System.
Employees earning more than four minimum monthly legal wages (MMLW) must make additional contributions to the Pension System which ranges between 1% and 2% of the employee’s salary (Law 797 of 2003). The additional contributions are as follows:
  • Up to four MMLW: 16%.
  • Between four and 16 MMLW: 17%.
  • Between 16 and 17 MMLW: 17.2%.
  • Between 17 and 18 MMLW: 17.4%.
  • Between 18 and 19 MMLW: 17.6%.
  • Between 19 and 20 MMLW: 17.8%.
  • More than 20 MMLW: 18%.
Companies and legal entities that hire employees earning less than ten MMLW are exempt from the payment of health contributions.

Bonuses

30. Is it common to reward employees through contractual or discretionary bonuses? Are there restrictions or guidelines on what bonuses can be awarded?
Employers must grant their employees a service bonus equal to one month's salary per year of service to be paid in equal amounts twice a year, in June and December. Employers may grant bonuses attached to employees' performance but these must be deemed as salary. Every payment received by an employee as direct compensation for service is considered salary.

Intellectual property (IP)

31. If employees create IP rights in the course of their employment, who owns the rights?

Inventions

Unless otherwise agreed, all inventions created during the term of the employment by employees for research and development purposes and/or using resources (for example, materials, information, equipment) to which the employee had access by virtue of their employment, belong to the employer (section 539, Colombia Commerce Code).
In addition, under Law 1450 of 2011, rights on industrial property made on a work-for-hire basis, within the scope of an employer-employee relationship or under an agreement for the provision of services, are presumed to have been assigned to the employer or hirer, unless agreed otherwise and provided that the corresponding agreement is in writing.

Trade marks

Under Law 1450 of 2011, rights on industrial property (which includes trademarks, slogans and trade names, among others) made on a work-for-hire basis, within the scope of an employer-employee relationship or under an agreement for the provision of services, are presumed to have been assigned to the employer or hirer, unless agreed otherwise and provided that the corresponding agreement is in writing.

Copyright

Under Law 23 of 1982, as amended by Law 1450 of 2011, unless agreed otherwise and provided that the corresponding agreement is in writing, economic rights on copyrighted works crafted within the scope of an employer-employee relationship or on a work-for-hire basis are presumed to have been assigned to the employer or hirer, to the extent necessary for the adequate performance of the employer or hirer's regular activities at the time the work is created. However, it is common practice and advisable to include in the respective employment agreement the obligation to later assign copyright in a given work.

Restraint of trade

32. Is it possible to restrict an employee's activities during employment and after termination? If so, in what circumstances can this be done? Must an employer continue to pay the former employee while they are subject to post-employment restrictive covenants?

Restriction of activities

An employer can restrict an employee's activities during the employment only if the employee agrees (Article 26 of the Labour Code).

Post-employment restrictive covenants

A restriction of activities is not enforceable once the employment agreement is finished.

Proposals for reform

33. Are there any proposals to reform employment law in your jurisdiction?
Besides proposals to reform the pension scheme in Colombia, most of the labour and employment law related propositions mainly involve the creation and reinforcement of programmes aimed towards informal employment formalisation and unemployment insurance. Additionally, is intended to create mechanisms to assist the unemployed to find employment more easily in the future (such as state device job boards).

Online resources

General Secretary of the Senate of the Republic (Secretaría General del Senado de la República)

The official website of the Colombian's Senate provided in Spanish, in which you will be able to find the Laws of the Republic, with their modifications, and notes on appropriate jurisprudence or case law.

Supreme Court of Justice

The official website of the Supreme Court of Justice provided in Spanish, where cases regarding specific topics can be found.

Contributor profile

Catalina Santos Angarita

Brigard & Urrutia (member of Ius Laboris)

T +571 346 2011
F +571 310 0609 / 571 742
E [email protected]
W www.bu.com.co
Qualified. Colombia, 2005; Spain, 2008
Professional associations/memberships. Ius Laboris; Colegio de Abogados Laboralistas.
Areas of practice. Labour and employment law.
Recent transactions. Advises on a permanent basis clients such as 3M, PPG Industries, Bundy Refrigeration, MTV, Convergys, Amgen and Publicis Groupe, among many others.