Everything about termination in Guatemala

Justified dismissal in Guatemala is one of the different ways to terminate an employment relationship.

However, there are multiple ways to terminate an employment contract, also called «methods of contract termination.».

The different ways to end a working relationship have in common the disassociation of the worker from the company.

It's important to mention that in this form of termination, if there is no justified cause or if there is one but it cannot be reliably documented, the employer can terminate the employment contract but is responsible for paying severance.

On the other hand, if the dismissal is documented and supported by a valid cause for dismissal, the labor code exempts the employer from paying severance pay.

The following are the most important aspects of a justified dismissal:

Worker rights for justified dismissal

Unjustified dismissal occurs when an employee is fired for a reason that is not their fault.

For example, if the worker is terminated due to a labor restructuring, this cause cannot be considered a justified dismissal, as the worker did not violate any prohibition or fail any obligation. Rather, it is the employer who decided to let the employee go. .

Another common case in State plazas is dismissal due to «contract expiration«These special cases can also result in unfair dismissal, as explained below.

The compensation.

All workers who are fired for an unjustified cause are entitled to indemnification (also known as «the settlement») and as damages, up to 12 months of salary for the period during which the severance pay was not received.

Likewise, the worker has the right to the payment of bonus 13, Christmas bonus and vacation proportional to the time of dismissal.

It is important to mention that the worker has the right to file a lawsuit to claim compensation for a maximum period of 30 days since their dismissal and inalienable rights for a period 2 years old.

Special cases.

As much in the State as in private companies, it is common to simulate an employment contract with a professional services contract, or under figures such as lines of service: 022, 029, among others.

It is important to mention that according to the labor code, a work contract between an employer and an employee is considered to exist if the following characteristics are met.

• Continued dependence provision of personal services on an ongoing basis, complying with mandatory hours and assigned workdays, Monday through Friday, for example.
• Address immediate orders from a boss on how to perform personal service
• Remuneration financial consideration.

In conclusion, regardless of how the employment contract or assignment to a specific position is denominated (whether for professional services, position 022, or 29), the worker is entitled to compensation for unjustified dismissal if their conditions meet the requirements stated above.

Employer's rights for justified termination.

The labor code establishes in articles 63 and 64 the obligations and prohibitions of workers, the violation of which could generate a justified cause for dismissal. For example, abandonment of work.

It is important to mention that the employer can govern and expand its rules (employee obligations and prohibitions) under an individual employment contract or internal work regulations.

This can complement what is already governed by our labor code, and in this way expand the grounds for dismissal if the employer so considers it.

A justified dismissal does not prevent the employee from filing a lawsuit in labor court.

However, we are protected by the fact that in the event of a future contingency, the lawyer (or Lawyers in Guatemalaso that the person assisting them has sufficient legal tools to defend the justified position that motivated the dismissal.

It is necessary to observe the benefits that come with preventing the documentation of everything related to the employer-employee relationship, such as: individual employment contract, internal work regulations, warnings, termination letters, among others.

The foregoing is due to our company being prepared to face any administrative (General Labor Inspectorate) or judicial conflict. Consequently, this considerably protects the company's economic interests, as labor claims are usually very high and unexpected for employers.

Termination due to Reorganization in Guatemala.

In today's world, various circumstances lead companies to innovate or modify their way of working in order to improve or change their economic model.

This decision impacts not only the economic aspect of the company but also labor relations, as companies often find themselves in the position of having to terminate their employment relationships with their employees without just cause. This is commonly referred to as «dismissal due to reorganization.»

The unilateral termination of an employment relationship by the employer can be direct (justified[1] unjustified) or indirect. Pursuant to this article, when we refer to dismissal due to reorganization, we will only refer to unjustified dismissal. Dismissal due to “reorganization” of workers is considered a unilateral form of termination of the employment relationship, in which the employer makes the unjustified decision to terminate the employment relationship with a worker.

Dismissal is unjustified when the employer terminates the employment relationship in cases not provided for by Guatemalan legislation, and the worker has not committed any workplace offense or it is a cause beyond the worker's control. Considering the above, dismissal due to reorganization will have the effects of a unjustified dismissal.

It is for this reason that, in these cases, the employer must pay the worker the non-waivable benefits and compensation for time served, which corresponds to one salary per year worked.

Below is a table with the benefits that must be paid to the worker.

Additionally, the employer must provide the worker with a certificate of employment.

It is important in these cases to correctly document the form of dismissal and the payment of non-waivable benefits and severance pay. Therefore, it is necessary to have efficient legal advice from Lawyers in Guatemala.

[1] The Direct termination will be cataloged as justified When the employer terminates the employment relationship in cases where the employee commits the following: a) offenses contemplated in Article 77 of the Labor Code; b) breach of obligations or offenses contemplated in the individual employment contract; c) offenses contemplated in the Internal Work Regulations or in the Collective Bargaining Agreement.