As an employer in Colombia, it’s important to exercise caution when ending an employment relationship. Terminating employees without adequate grounds or failing to follow the standard procedure can result in hefty fines and damage to your reputation.
The Colombian Labour Code, particularly Article 62, outlines the fair causes for dismissal. It mandates that for a termination to be considered fair, the employer must provide written notice specifying the contractual or legal standard that was breached, or the facts justifying the termination.
In this guide, we will discuss everything you need to know about the end of employment in Colombia, including the notice period, post-termination clauses, severance pay, termination process, waivers, and more. This way, you can protect your workers and your business from any potential legal and financial risks.
The working notice period in Colombia for employment termination varies based on the type of employment contract and the reasons behind the termination.
For fixed-term employment contracts, the employer must provide a notice of termination at least 30 days before the contract’s expiration if they decide not to renew it. If a fixed-term contract is terminated before its expiry without just cause, the employer must pay compensation equivalent to the salary due for the remainder of the contract.
On the other hand, there is no statutory notice period for an indefinite-term employment contract. However, it is a common practice to provide 15 days’ notice period. This is also the case for employees under probationary contracts.
In cases where a dismissal under this contract is considered without just cause, employers must provide severance pay to the affected employee. Employers calculate this based on the duration of employment and salary.
In Colombia, severance pay is mandated by law. The calculation of severance pay depends on the nature of the employment contract, the duration of employment, and the reason for termination. For example, a severance pay calculation may take into account the length of service an employee has provided to a company.
So, if an employee earns less than 10 times the minimum monthly wage, they are entitled to severance pay of 30 days for their first year of work, plus 20 days for each additional year. If the employee earns more than 10 times the minimum wage, they receive 20 days of severance for the first year and 15 days for each additional year of service.
Meanwhile, the employer is not obligated to provide severance pay if an employee is terminated with just cause.
The probation period in Colombia is not required by law, but it is commonly used by employers to assess the compatibility and performance of new hires.
According to Article 78 of the Colombian Labour Code, the maximum probationary period for an indefinite contract is two months. On the other hand, the probationary period for a fixed-term contract can be up to one-fifth of the contract terms, not exceeding two months.
This allows both the employer and the employee to evaluate the employment relationship before committing to a long-term engagement.
When it comes to the termination process, Colombia follows the standard procedure based on the local labour laws.
As an employer, you need to have a just or sufficient cause to dismiss someone without notice. For example, fairgrounds that can be considered for dismissal are repeated or gross misconduct, failure to perform required duties, criminal behaviour, or misrepresentation.
Fair dismissals need to align with the just causes outlined in Article 62 of the Colombian Labour Code, such as:
These fair causes ensure that dismissals are justified and that the rights of workers are respected, balancing the interests of both employers and employees.
The notice of termination must be made in writing and sent to the appropriate government authorities. It should specify the legal and contractual standards that were breached or detail the circumstances justifying the termination. Employees should receive their final payment on their last day of work.
On the other hand, for terminations without cause, the employer must meet severance obligations. In such cases, there are no requirements for issuing a prior notice, but the employee is entitled to compensation or indemnification for the unilateral termination by the employer.
Non-compete clauses are permissible but are strictly regulated when it comes to their enforceability post-termination.
During active employment, employers can enforce agreements to prevent employees from participating in competing activities. However, if an employee leaves your company, you must meet certain conditions to enforce non-compete clauses.
If you’re considering adding a post-termination non-compete clause to your employee’s contract, you must be aware of the following:
Such agreements must be clearly stated and should serve a legitimate purpose to protect your business without imposing unfair limitations on your employees.
Customer non-solicitation clauses or agreements are generally not enforceable by law. This clause or agreement restricts a former employee from contacting the employer’s clients. It primarily acts as a preventive measure rather than a legally binding one.
While these clauses can be included in the contract, it only sets clear expectations and standards from employees. Using them for legal protection against competition from former employees might not be effective.
Similar to customer non-solicitation, post-termination employee non-solicitation clauses or agreements are not enforceable. Typically, employers add these clauses or agreements in employment contracts only to set clear expectations and discourage this kind of behaviour, rather than as a legal measure on which they can rely in court.
Waivers related to the termination of employment are only enforceable and advisable when executed through a labour settlement before a Labour Judge or the Ministry of Labour. This process ensures that any agreement between the employer and the employee is fair, legally sound, and mutually agreed upon.
However, employers must take note that employment rights during termination are protected under the local law. It is generally not possible for an employee to waive these rights voluntarily, which include rights to due process and fair dismissal reasons as outlined in the Colombian Labour Code.
Employers must cite one or more of the fair causes established in Article 62 of the Labour Code to consider fair dismissal.
Given these protections, employees cannot simply sign away their right to a fair termination process, even if they or the employer wish to do so.
During a transfer of a business in Colombia, there are certain implications that can impact your workforce. It’s essential to understand them to ensure compliance with the local labour laws and regulations.
Transfer of employment can only occur in the following ways:
When an employer substitution or contract transfer takes place, employees are assured of retaining their jobs and existing employment conditions, including their salaries, accrued seniority, benefits, and any other terms they previously enjoyed.
In the case of an employer substitution, the original employer shares liability with the new employer for any employment-related obligations that arose before the transfer. This includes, but is not limited to, unpaid salaries, severance, or other liabilities. Shared responsibility ensures a fair outcome for all parties and helps to safeguard employee interests during the transition.
An employer substitution is recognised by law when the following three criteria are met:
There are many different ways an employment contract can come to an end. But whatever the situation, you need to understand the rules that cover the end of employment in Colombia — or you could end up facing legal issues.
Our solutions ensure your business is protected from risk when a relationship with a worker ends — whatever the reason. We can also help you to avoid missed opportunities by re-deploying talent where possible.
Termination of employment in Colombia is governed by the Código Sustantivo del Trabajo and must follow the applicable legal requirements,regardless of the reason for ending the contract. Here is what employers in Colombia need to know.
Termination falls into two categories
Colombian labour law recognises two types of termination: termination with just cause and termination without just cause. The category determines what the employer must pay and what process they must follow.
Termination with just cause
Article 62 of the Labour Code sets out the statutory groundsthat allow an employer to end a contract without paying additional severance. These include serious misconduct, repeated violations of internal regulations, abandonment of work, dishonesty, and acts that damage the employer’s reputation or property.
The employer must identify the specific just cause in writing and notify the employee formally. Employers should also ensure that any applicable disciplinary or due process requirements have been followed before dismissal. Failing to follow this process even when just cause genuinely exists can result in the termination being challenged before the labour courts and, depending on the circumstances, being declared unjustified.
Termination without just cause
If the employer ends the contract without a legally recognised reason, the employee is entitled to severance compensation (indemnización por despido sin justa causa). The amount depends on the employee’s salary and length of service, and the applicable statutory compensation rules.
Special protections against dismissal
Certain employees benefit from reinforced employment protection under Colombian law. Depending on the circumstances, dismissal may require prior authorisation from the Ministry of Labour or may be subject to additional legal requirements. These include:
Dismissing any of these employees without the required authorisation results in mandatory reinstatement and financial penalties, regardless of whether just cause exists.
Fixed-term contracts
For fixed-term contracts, the contract ends at the agreed date. If the employer does not want to renew, they must give the employee written notice at least 30 days before the contract expires. Without this notice, the contract renews automatically on the same terms.
Documentation is required
All terminations in Colombia must be documented in writing. The written notice must state the reason for termination and reference the applicable just cause under Article 62 where relevant. Verbal dismissals are not valid and can expose the employer to unjust dismissal claims.
It depends on the type of employment contract. Colombia does not require a statutory notice period when terminating an indefinite-term employment contract. Instead, employers generally pay statutory severance if the dismissal is without just cause. However, fixed-term contracts require at least 30 days’ written notice if the employer does not intend to renew the contract.
Notice period for indefinite-term contracts in Colombia
There is no statutory notice period for terminating an indefinite-term employment contract in Colombia.
Notice period for fixed-term contracts
Employers must provide at least 30 days’ written notice before the end of a fixed-term contract if they do not intend to renew it.
If the employer does not give the required notice, the contract automatically renews for the agreed term under Colombian labour law.
Notice period for contracts for a specific project
Contracts linked to a specific project or task end when the agreed work is completed. Colombian labour law does not require a statutory notice period, although employers should notify employees when the project is nearing completion as a matter of good employment practice, to allow for an orderly handover and final payroll processing.
Can employers include a notice period in the employment contract?
Yes. Employers can include contractual notice periods in employment contracts.
However, contractual notice provisions cannot reduce an employee’s statutory rights. The enforceability of contractual notice clauses should be assessed on a case-by-case basis under Colombian contract and labour law. If an employer ends employment immediately despite a contractual notice period, they must still comply with all contractual payment obligations as well as any statutory entitlements under Colombian labour law.
Colombian labour law does not set different statutory notice periods based on an employee’s seniority, job level, or salary. The same rules apply regardless of whether the employee is an entry-level worker or a senior executive.
However, there are a few important distinctions in practice.
Employees in positions of trust (cargos de confianza)
Employees who hold positions of trust or management, typically defined as those with significant decision-making authority or access to confidential information, have different rules around overtime eligibility, but their termination rights remain the same as other employees. They are still entitled to severance if dismissed without just cause, and the same just cause provisions under Article 62 apply.
Contractual notice periods
Some employers include notice period clauses in employment contracts for senior roles, typically ranging from 30 to 90 days. These are contractual rather than statutory obligations. If the employer terminates without giving the agreed notice, the employee is entitled to payment in lieu of that notice period on top of any statutory severance.
Collective bargaining agreements
In companies where employees are covered by a collective bargaining agreement (convención colectiva), the agreement may specify different notice requirements or enhanced termination terms for certain categories of workers. Employers must check whether any applicable collective agreement affects the termination process for the specific employee.
Executive and international assignments
For senior executives or internationally seconded employees, employment contracts often include specific termination provisions negotiated at the individual level. These must always meet or exceed the statutory minimum. They cannot reduce the employee’s legal entitlements under the Código Sustantivo del Trabajo.
A fixed-term employment contract in Colombia ends on the agreed end date. If the employer does not want to renew the contract, they must give the employee at least 30 days’ written notice before the contract expires. If they fail to give notice, the contract generally renews automatically under Colombian labour law.
Do employers have to give notice before a fixed-term contract in Colombia ends?
Yes. Employers must provide written notice at least 30 days before the contract end date if they do not intend to renew the contract.
If notice is not given on time, the contract renews automatically on the same terms. For contracts of less than one year that have already been renewed three times, the next renewal must be for at least one year.
Is severance pay required when a fixed-term contract in Colombia expires?
No. If a fixed-term contract ends on its agreed expiry date and the employer has given the required notice, severance compensation is not payable.
However, the employer must still pay the employee’s final settlement (liquidación), including:
What happens if a fixed-term contract ends early?
If an employer terminates a fixed-term contract before the agreed end date without just cause, the employer will generally be required to compensate the employee in accordance with the statutory rules applicable to early termination of fixed-term contracts, which typically include the salary corresponding to the remaining contractual term.
When employment ends in Colombia, employers must pay a final settlement (liquidación). The final payment includes all outstanding salary and statutory benefits. If the employee is dismissed without just cause, severance compensation may also apply.
What is included in a final settlement in Colombia?
A final settlement typically includes:
Is unused vacation paid when employment ends?
Yes. Employees must be paid for any accrued annual leave that has not been taken before their employment ends.
Is prima de servicios included in the final payment?
Yes. Employers must pay any proportional prima de servicios earned since the employee’s last June or December payment.
Are cesantías included in the final settlement?
Yes. Employers must calculate the proportional cesantías accrued since the last annual deposit and make the required payment or deposit, as applicable under Colombian law. They must also pay the employee any proportional interest on cesantías accrued up to the termination date.
When is severance compensation payable?
Severance compensation is generally payable when an employer terminates an indefinite-term employment contract without just cause. The amount depends on the employee’s salary and length of service.
When should the final settlement be paid?
Employers should pay the final settlement promptly upon termination of employment and in accordance with Colombian labour law.
Delays may expose employers to statutory default compensation (indemnización moratoria) or other legal consequences where the legal requirements are met, rather than merely interest charges. Employers should therefore ensure final payments are made without unjustified delay
Yes, but only in certain circumstances. In Colombia, employers must pay severance compensation when they dismiss an employee without just cause. If employment ends for a legally recognised just cause, statutory severance compensation is generally not required.
When is severance pay required?
Severance compensation applies when an employer terminates an indefinite-term employment contract without a valid legal reason.
The amount depends on the employee’s salary and length of service.
For employees earning up to one minimum monthly wage:
Employers should verify the applicable statutory compensation formula before calculating severance, as legislative amendments may affect the relevant salary thresholds or calculation rules.
For employees earning more than one minimum monthly wage:
When is severance pay not required?
Employers do not have to pay severance compensation when employment ends for a legally recognised just cause under Article 62 of the Colombian Labour Code.
However, employees must still receive their final settlement, including outstanding salary, accrued vacation, prima de servicios, cesantías, and interest on cesantías.
Is cesantías the same as severance pay?
No. Cesantías and severance compensation are different payments.
Cesantías are a mandatory employment benefit that employees earn throughout their employment, regardless of how the contract ends.
Severance compensation (indemnización por despido sin justa causa) is an additional payment that applies only when an employer dismisses an employee without just cause.
Employers in Colombia can include confidentiality, non-solicitation, intellectual property, and non-compete clauses in employment contracts. However, post-employment non-compete clauses are generally interpreted restrictively under Colombian law because they may conflict with the constitutional right to work. Their enforceability depends on the specific circumstances of each case.
Are non-compete clauses enforceable in Colombia?
Sometimes, but only in limited circumstances.
A non-compete clause is more likely to be enforceable if it:
Provides reasonable economic compensation where appropriate.Broad or unpaid non-compete clauses are unlikely to be upheld by Colombian courts.
Are confidentiality clauses enforceable?
Yes. Confidentiality obligations are generally enforceable during and after employment.
Employers can require employees to protect confidential information, including:
The employment contract should clearly define what information is confidential and how long the obligation continues after employment ends.
Can employers stop former employees from contacting clients or employees?
Yes. Employers can include reasonable non-solicitation clauses that prevent former employees from soliciting clients or recruiting colleagues for a defined period after leaving the company.
As with non-compete clauses, the restriction must be proportionate and protect a legitimate business interest.
Who owns intellectual property created by employees?
Employers can require employees to assign intellectual property created during the course of their employment to the company.
These clauses are generally enforceable where the work was created as part of the employee’s duties.
Just cause dismissal allows an employer to terminate employment without paying severance compensation. To rely on just cause, the employer must use one of the legal grounds listed in Article 62 of the Colombian Labour Code and follow the correct dismissal process.
What are the legal grounds for just cause dismissal?
Common examples include:
These examples are illustrative only. Employers should always assess the specific wording of Article 62 before relying on a particular ground for dismissal.
Does the employer have to follow a dismissal process?
Yes. Even where a valid reason exists, employers should:
Provide any procedural guarantees required by law, internal disciplinary procedures, collective bargaining agreements, or constitutional due process principles, where applicable.
Who has to prove just cause?
The employer. If the employee challenges the dismissal, the employer must demonstrate both:
Poor documentation can result in the dismissal being treated as unjust, even where the underlying reason was valid.
To reduce legal risk when ending employment in Colombia, employers should follow a structured termination process, comply with employee protection rules, and calculate the employee’s final settlement accurately. Careful planning can help avoid disputes, penalties, and claims for unfair dismissal.
Should employers check whether an employee has special protection?
Yes. Before starting any termination process, employers should confirm whether the employee has additional legal protection.
This may apply to pregnant employees, employees with disabilities, union representatives, employees on parental leave.
Whether prior authorisation from the Ministry of Labour is required depends on the specific legal protection applicable to the employee. Employers should assess this before proceeding with any dismissal.
How should employers document a just cause dismissal?
Employers should keep clear records before ending employment, including:
Good documentation is essential if the dismissal is challenged.
How should employers notify employees?
Termination should generally be confirmed in writing. The notice should explain:
How long should employment records be kept?
Employers should retain employment records, payroll information, contracts, disciplinary documents, and termination records for at least the minimum statutory retention period required under Colombian law. Different legal obligations may require different retention periods depending on the type of document.
CXC helps businesses reduce legal risks during employee termination in Colombia by managing the entire offboarding process. We help employers comply with Colombian labour laws by preparing compliant documentation, calculating final payments, managing statutory obligations, and reducing the risk of employment disputes.
How does CXC support compliant employee terminations?
Before a termination begins, CXC checks whether the employee has special legal protections, such as pregnancy, disability, union representation, or parental leave.
Where Ministry of Labour approval is required, we guide employers through the correct legal process before any action is taken.
How does CXC manage just cause dismissals?
For dismissals based on just cause, CXC helps employers:
This reduces the risk of a dismissal being challenged because of procedural errors.
How does CXC reduce employment disputes?
Because CXC manages the employment relationship from hiring through termination, we maintain complete employment records, payroll history, and compliance documentation throughout the employee lifecycle. If a dispute arises, employers have the records needed to support their position.
Can CXC support businesses be hiring outside Colombia?
Yes. CXC helps businesses hire, manage, and offboard employees in more than 100 countries, providing consistent compliance support through a single global workforce partner.
With our EoR solution, you can engage workers anywhere in the world, without putting your business at risk. No more worrying about local labour laws, tax legislation or payroll customs — we’ve got you covered.
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