If the employment relationship ends unilaterally due to early dismissal by the employer, the employee has the right to liquidation, the value of which will depend on the time spent on duty.

Premature dismissal is the termination of the employment relationship by a unilateral decision of the employer, so the Labor Law in this case points to some obligations that make the settlement of that worker higher than in the case of resignation.

Art. 188 of the Labor Act states that the employer must pay the additional amount that is compensation for early termination.

If the worker has been employed for one to three years, he is entitled to three monthly benefits; and starting from the fourth year, he receives compensation for each year he spent with that employer or a part of it as compensation if he is fired, according to Vanessa Gómez, an expert in labor law and a member of Lex Valor Abogados.

“You have to consider seniority. If a person has an experience of one to three years, only three salaries are taken into account in compensation due to early termination, with regard to the last compensation received.“, he assures.

Here’s an example. If a person turns two years old and gets fired, the last salary is multiplied by three to determine the compensation for early termination.

If the person has been there for three years and five months, the compensation item for his settlement is calculated as if he had been there for four years, that is, the last monthly compensation he received is multiplied by four. The number you multiply by increases according to the number of years you finally reached.

“In the case of early dismissal compensation, part of the year is considered a full year,” says Gómez.

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In the case of an indefinite contract, the trial period can be 90 days. If that period passes, it is considered to be for an indefinite period, so if a person is fired, he already receives that proportional compensation. To calculate the number of years, we count from the beginning of the employment relationship.

Calculation of compensation, whether for early termination or any other form of termination of employment, is always done on the basis of the last full compensation received, says labor law expert Jorge Endara.

That one person worked since February 1, 2022 for the company, you have completed two years of service and your last net income was $460 (current base salary), then you will receive the following items if you farewell in January 2024.

1.- The compensation for early termination It will be calculated on the basis of three years, because he has achieved more than one year of work. Since his total income was $460 (which is the net sum of the income column of his last role without taking into account discounts such as IESS contributions or mortgage and unsecured loan payments), he multiplies that value by three. or whatever number you ended up working on. The result in the presented case The price is 1380 dollars.

2.- The eviction bonus It is calculated from 25% of the last full fee received, which is $460. 25% is $115. This last value is multiplied by two, which is the number of full years of work. The fraction is not taken into account here; so, it would be $230.

3.- The it would be proportional to the thirteenth salary from December 1, 2023 to January 31, 2024. The sum of all income received during that period (two full paychecks of $450 plus $460) is $910. This last value is divided by twelve and what you get is $75.83.

4.- The proportional to the fourteenth salarywhich is $460 if you work a full year, In this case, it would be for the period from March 1, 2023 to January 31, 2024, that is, eleven months of work. The operation is to divide the last income received by twelve, which gives a result of $38.33. This last value is multiplied by eleven, which is the number of months corresponding to the payment (what has been done). So the amount you will get is $421.67.

5.- The total annual leave or proportional annual leave. Given that it was not received in two years of work, it is calculated by adding up all the income of that time:

Which makes a total of $10,535. This last value is divided by 24 as indicated by the standard, so you finally get $ 438.96.

He the final result of the early termination settlement in this case is $2,546.46.

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Endara indicates that the example applies with the basic salary without bonuses, payment of overtime and additional hours, that is, assuming that the worker does not have them. If you have them, you must take into account all the earned income in your last full salary. Tithes are also calculated from the total income each month.

Therefore, it is important to have payment roles with income received so that one can more accurately calculate what should be received as a settlement.

The Ministry of Labor has a link where you can, after entering the appropriate data, calculate the amount you will receive depending on the reason for the termination of the employment relationship.

“It is important to note that the calculations will be made on the basis of the Individual Employment Contract (the causes of termination of which are prescribed in Article 169 of the Labor Law) without taking into account the achievements made in the Collective Agreements, municipal/provincial regulations, Decisions or Transaction Minutes. “

It’s important to take into account, Gómez adds, that the emerging contract is effective from June 2020, so you must also review what type of contract you have first.

In the latter case, both the employer and the employee can terminate the contract before the fixed term, which can last up to one year and can only be renewed once for the same period.

“If I signed a one-year contract and the employer unilaterally terminates the contract in the eighth month, the worker does not receive compensation for early termination because this contract specifically does not have that characteristic,” says Gómez.

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Whether compliance with the agreed period and renewal and the employment relationship continues, this resulting contract is considered for an indefinite period.

“As an employee, I did not cancel my employment relationship, nor did the employer, so it is already an indefinite employment relationship and it obviously applies to me, yes, once I have that condition, an indefinite contract; If the company unilaterally terminates my employment, it must pay an early termination fee taking into account the total time worked,” says Gómez.

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