Termination in Colombia: just cause, indemnity and protected employees

Termination in Colombia follows a closed list. The Labour Code (Código Sustantivo del Trabajo, CST) names the ways a contract ends in art. 61: death, mutual consent, expiry of a fixed term, completion of a project, closure of the business, a suspension of activity lasting more than 120 days, a court judgment, failure to return after a suspension, and a unilateral decision by either side, with or without just cause.

For an employer, three routes come up in practice. A fixed term can simply run out, provided notice of non-renewal goes out on time. The employer can dismiss for one of the just causes the law lists. Or it can end the contract without any just cause, which is allowed, but only on payment of a statutory indemnity. There is no route that is both cause-free and cost-free once probation is over.

Probation is the exception. During an agreed trial period (período de prueba), which must be in writing and cannot exceed two months, either party can end the contract at any time with no notice and no indemnity. How probation is written, and why it cannot be repeated in a second contract with the same person, is explained in our piece on Colombian employment contracts.

Closing the business, or suspending activity, needs prior permission from the Ministry of Labour (Ministerio del Trabajo), which has two months to decide. A company winding down its Colombian team cannot treat closure as an automatic end to every contract.

A dismissal with just cause (justa causa) needs a reason that appears in CST art. 62(A), and that list is exhaustive. It has fifteen items, which fall roughly into three groups.

• Conduct: lying to get hired with false certificates; violence or grave indiscipline; damaging property on purpose; immoral or criminal acts at work; a serious breach of duties under the contract or the internal rules; revealing trade secrets.
• Performance and ability: poor results that continue after a warning, systematic non-performance, incompetence for the job, and refusing preventive or curative medical measures.
• Circumstances: more than 30 days in detention, being granted a retirement or invalidity pension, and illness unrelated to work that remains uncured after 180 days.

Notice depends on the group. For the causes in numerals 9 to 15 (the performance, health and pension grounds) the employer must give at least 15 days’ notice. For the others, such as violence or dishonesty, termination can take effect immediately.

Write the reason down. The letter should name the specific numeral of art. 62(A) and the facts behind it, because the cause given at termination is the one a labour judge will weigh. Vague wording such as “loss of confidence” is a common way to turn a just-cause dismissal into one without just cause, and so into an indemnity bill.

The illness ground deserves extra care. Ending a contract after 180 days of non-occupational illness is listed as a just cause, but workers with a health condition can also hold reinforced job protection, covered below and in our note on sick pay in Colombia.

CST art. 115, rewritten by Ley 2466 de 2025, sets out the steps for imposing any disciplinary sanction. The employer opens the process formally and puts the charges in writing; the worker sees the evidence and gets five days or more to reply; the decision is reasoned, the sanction proportionate, and the worker may contest it. A business with under ten staff only has to listen to the worker before acting.

Whether that full procedure applies to a just-cause dismissal, as opposed to a lesser sanction, has been shaped by court decisions rather than settled in a single article. Our approach is simple: we put the facts to the employee in writing and let them answer before any decision is taken. It costs a week and removes the most common ground of challenge.

The reglamento interno de trabajo, or internal work rules, matters here too. Above set headcounts an employer must have one, post it physically and online, and bring it into line with the reformed disciplinary steps. If a dismissal relies on breach of the rules, the rules must exist and the employee must have had access to them.

Dismissal from an indefinite contract with no cause given is allowed, provided the employer pays the CST art. 64 indemnity (indemnización por despido sin justa causa). No notice period is set for this route; the indemnity takes its place. The amount depends on the type of contract, on length of service and, for indefinite contracts, on whether pay sits above or below 10 SMMLV.

Picture three years’ service at COP 8,000,000 a month, a daily rate of about COP 266,667. Year one earns 30 days and years two and three earn 20 apiece, so the bill is 70 days: COP 18,666,667. Run the same service at COP 20,000,000, above the 10 SMMLV line, and the count becomes 20 + 15 + 15 = 50 days, about COP 33,333,333.

Fixed-term and project contracts work differently. Ending a fixed term early without just cause means paying out every month left on it. For work tied to a specific project (obra o labor), the payout covers the time the project still needed, and never less than 15 days. Ending a 12-month fixed term after four months therefore costs eight months’ salary.

An employee who quits because of the employer’s own fault, unpaid wages being the classic case, is owed the same amount. A small group with ten years’ unbroken service by 27 December 2002 remains on the previous, richer scale. Income tax is withheld from the indemnity at the employee’s average rate.

Some employees have reinforced job protection (estabilidad laboral reforzada), and dismissing them without the right authorisation costs far more than the ordinary indemnity.

• Pregnancy and maternity: no dismissal for pregnancy or breastfeeding without prior authorisation from the Ministry of Labour, based on a just cause. Any dismissal while the worker is pregnant, or within 18 weeks of the birth, is presumed to be discrimination, and without authorisation it adds 60 days’ salary to the other amounts.
• Maternity leave: notice of dismissal given during the leave, or expiring during it, has no effect.
• Expectant fathers: the protection extends to a worker whose spouse or companion is expecting, or gave birth less than 18 weeks ago, when she has no formal employment; the 60-day sanction is the same.
• Disability: ending a contract because of a disability needs the labour authority’s prior clearance, and skipping that step costs 180 days’ salary in addition to all other sums.

In each case the safer reading is to treat the protection as live until proven otherwise. If you are thinking of ending the contract of someone who has recently told you about a pregnancy, a spouse or companion who is expecting, or a medical condition, talk to us before any letter is drafted.

Whatever the route, the final settlement (liquidación) is due when the contract ends: unpaid salary, the part-year prima, cesantías with interest, and any vacation not yet taken. Paying late is expensive. CST art. 65 charges the employer a day’s wages for every day the settlement is outstanding, for up to 24 months, where the worker earns above the minimum wage; after that, interest runs at the maximum rate.

A second rule in art. 65 surprises many foreign employers. An employer ending a contract has to prove that the previous three months of social security and payroll levies are paid. Until that proof exists, the dismissal does not take effect.

• Resignation from an indefinite contract: the employee owes 30 calendar days’ warning, though the contract cannot penalise a shorter one.
• Fixed-term non-renewal: written notice at least 30 days before expiry, or the contract renews automatically.
• On request: a certificate of service, role and salary, and an exit medical examination if there was one on entry.
• Relocation: if the person moved for the job, reasonable return costs, unless the contract ends through their own fault or choice.
• Claims: labour rights prescribe after three years from the date they fell due.

The settlement is calculated in full, as the Código Sustantivo del Trabajo sets it out. Only a labour judge can declare an individual right; Ministry inspectors can fine but cannot order payment to a particular worker. Note too that Colombian law gives no force to a post-employment non-compete, so protection of your know-how rests on confidentiality, not on a non-compete.

With Employer of Record Colombia holding the contract as legal employer, the paperwork of an exit is ours: the termination letter, the indemnity calculation and the final settlement. You keep the business decision: whether the role continues, whether performance meets the standard, and what the timeline should be.

A typical exit starts when you tell us early what you are considering and why. We check the contract type, the salary band, any protection that may apply and whether the last three months of contributions are clear. We then set out the options with a cost for each, for example mutual agreement against dismissal without cause, so you can choose with the numbers in front of you.

Mutual consent is often the cleanest route. Both sides sign an agreement ending the contract, the settlement is paid, and any additional amount is negotiated rather than dictated by the art. 64 table. It still needs care with protected employees and with the final settlement deadline.

Termination rules also shape how you hire, which is why we raise them at offer stage: a fixed-term contract has its own exit costs, and a probation period is valid only when the first contract states it in writing. The full scope of what we run, from first contract to final payslip, is set out under EOR services in Colombia, and a provider’s answer on exits is worth hearing before you sign with anyone; it is among the questions in our shortlisting checklist for Colombian EORs.

Q01Is dismissal without stating a cause possible under Colombian law?+

A.Yes, if it pays. After probation, the CST art. 64 indemnity buys the right to end an indefinite contract with no stated cause; under 10 SMMLV that means a month’s pay for year one and 20 days for every later year, with fractions counted.

Q02How much notice must an employer give in Colombia?+

A.For dismissal without just cause, the law sets an indemnity rather than a notice period. For just causes linked to performance, health or pension (art. 62(A) numerals 9 to 15) at least 15 days’ notice is required. Fixed-term non-renewal needs 30 days’ written notice.

Q03How much notice does an employee give when resigning?+

A.A month: 30 calendar days for someone on an indefinite contract, meant to give the employer time to recruit. No contractual penalty can attach to a shorter notice.

Q04What happens if the final settlement is paid late?+

A.For workers earning more than the minimum wage, the employer owes one day’s salary for each day of delay, for up to 24 months, and interest at the maximum rate after that (CST art. 65).

Q05Can we agree a non-compete for after the employment ends?+

A.No. Colombian law does not enforce restrictions on competing after the job ends. Confidentiality and trade-secret duties apply during employment, and disclosing trade secrets is a just cause for dismissal.