The three main ways to terminate an employment relationship are by voluntary resignation of the worker, untimely dismissal or exit with approval.
One of the conditions to proceed with the resignation, which must always be voluntary on the part of the worker, is that there is an agreement between the parties, as provided by the Labor Code.
When a person freely and voluntarily submits a resignation and the company accepts the agreement of the parties, one of the forms of termination of the employment relationship established in art. 169 of the Labor Code, indicates Vanessa Gómez Mosquera, expert in labor legislation and partner of Lexvalor Abogados.
“It is important that no one can force you to resign. And there are many other ways to terminate the employment relationship, such as a process of approval before the Ministry of Labor. If in the process it is shown that the person has committed a serious offense to the internal work regulations or has incurred in some of the causes established in art. 162 of the Labor Code, therefore, the labor inspector will authorize the termination by approval. This process can be initiated by the worker or the employer”, indicates the specialist.
If the employee did not commit the fault they are accused of, they should not sign a waiver, advise labor experts
It is not advisable, says labor law expert Fabricio Dávila, to force one of the workers to resign. “It is an agreement between the parties; a company cannot oblige. If you want to unlink, you have several options. One is the process of approval or termination of the employment relationship unilaterally through untimely dismissal, as this is the case, the employer is obliged to pay compensation to the worker.
What does the settlement include if the worker resigns?
The liquidation by resignationwhich is voluntary, includes the payment of 25% of the last full remuneration received multiplied by the number of years that worker has worked for his employer. The amount is paid to the employee as an eviction bonus considered in art. 184 and 185 of the Labor Code.
“All the income that appears in the role is taken into account; therefore, you have to look at the last remuneration. If I am fired today, March 15, 2022, the last full compensation is that of the end of February 2022; from that value is calculated. The art. 95 of the Labor Code indicates the concept of remuneration as such, which includes overtime, supplementary hours, some considered bonus.
Commissions, participation in profits, the individual contribution to the Ecuadorian Social Security Institute (IESS) when assumed by the employer or any other remuneration that is normal in the industry or service, indicates the norm, that is, net income without any discount.
It that does not enter for the calculation of 25% is the legal percentage of profits, the monthly payment of the reserve fund, the per diem or occasional subsidies, the thirteenth and fourteenth remunerations, the economic compensation for the decent salary, salary components in the process of incorporation to the remunerations and the benefit that the services of social order represent, according to art. 95 of the Labor Code.
In addition to receiving 25% of the last net remuneration received multiplied by the number of years of work, the worker who resigns receives the proportional thirteenth and fourteenth salary and vacations not taken, which are paid.
What are the options that the employee has to access the employer’s retirement?
For receiving the thirteenth full salary takes into account the period from December 1 to November 30 of the following year. Then, the proportional payment covers from the last month of the year until the day the employment relationship ends. The calculation is made by adding each monthly remuneration received in that period until the termination of the employment relationship, and the result is divided by twelve.
“Generally, if a person does not have variables or extra values in overtime, supplementary, then, it would be an additional value of remuneration if he completes the full period,” he indicates.
In the operation, the concept of full remuneration established in art. 95 of the Labor Code, that is, for the calculation the individual contribution of the employee to the IESS, or the mortgage and unsecured fees, is not discounted; is full pay.
Same with the fourteenth salary, which is a basic salary ($425 since last January). In the Sierra-Amazonía educational system, you have to work the period from August 1 to July 31 of the following year to receive it in full. If he is dismissed before, he receives the proportional one and it is calculated based on the current minimum wage at that time.
In the Costa-Galapagos regime, the calculation period runs from March 1 to the last day of February of the following year.
The proportional vacation, if any, is calculated by adding all the income received in the period of the year of the vacation divided by 24. “That is the vacation calculation. If I have taken them annually, as it should normally be, I only have to consider in the settlement the proportional amount of the last period until the date when the employment relationship ends, ”he assures.
The liquidation for untimely dismissal is greater than the one received if you resign
Untimely dismissal is the termination of the employment relationship by unilateral decision of the employer. Hence, the legislation indicates some obligations that make the liquidation of that worker greater in that case.
“If the employer decides not to keep that person, the law sanctions him with an additional value, which is the compensation for untimely dismissal contemplated in art. 168 of the Labor Code”, indicates Gómez.
If the worker was in his employment for a period of one to three years, he is entitled to three additional remunerations; and, beginning in the fourth year, he receives compensation for each year he has been with that employer as severance pay.
If a person was there for four years and five months, the severance item in their settlement is calculated as if they had been there for five years, that is, the last monthly remuneration they received is multiplied by five. “The fraction of the year is considered as a full year in the case of compensation for untimely dismissal.”
In the indefinite contract, the trial period can be set at 90 days. If that period is passed, it is already considered to be indefinite, so if the person is fired, they already receive the proportional settlement. For the calculation of compensation, in the number of years, it is counted from the beginning of the employment relationship.
If a person works for a company since June 1, 2017, that is, they are about to complete five years of work and their last net income received was $425 (a current basic salary), then they will receive the following items in case of be fired on March 15, 2022:
1.- The compensation for untimely dismissal It will be calculated based on the five years, since the fraction is considered as a completed year. Since his total income was $425 (which is the net sum of the income column of his last role without taking into account discounts, such as the contribution to the IESS or the payment of mortgage and unsecured loan installments), multiply that value for five years or for the number you have worked. The result in the case is $2,125.
2.- The eviction bonus It is calculated as 25% of the last full compensation received, which is $425. 25% is $106.25. This last value is multiplied by four, which is the number of full years worked. Here the fraction is not taken into account; then, it would be $425.
3.- The proportional to the thirteenth salary would be from December 1 to March 15. The sum of all the income received in that period (three full salaries and a fortnight) is $1,487.5. This last value is divided by twelve and what you will receive is $123.96.
4.- The proportional to the fourteenth salarywhich is $425 if you work the full year, in this case it would be only for the last fifteen days you worked, a sum of $17.7. Here it is considered that the worker received the $425 for the period worked from March 1, 2021 to February 28, 2022, which is usually paid separately, in addition to salary.
5.- The proportional vacationtaking into account that he worked since June 1, 2017 and that he took all his vacations in each year of work, then it would be the sum of all the monthly remunerations of the last work period, that is, from June 1, 2021 to February 2022 (nine months), plus the fifteen days of March of this year, which gives $ 4,037, 5. This last value is divided by 24, as indicated by the standard. The result gives $168.23.
The final settlement result for untimely dismissal in this case is $2,859.89.
‘Settlement with approval is a sanction’
After a process of approval in favor of the employer, the worker will only receive the proportional amount of the thirteenth and fourteenth salary and vacations, which are rights acquired throughout the employment relationship.
“The proportional number of days of salary may also be included in this settlement, or it may happen that the employer already pays you directly during that month, so it would not enter,” indicates Gómez.
The nine reasons why you can be fired with approval in Ecuador
Dávila considers that changes are required in the labor legislation, because everything works with incentives, and the established forms of labor dismissal ultimately prevent more hirings from being made in practice.
“When hiring is going to be done, the human resources or financial management departments plan how much a worker costs per month; this includes remuneration, tenths, reserve funds per year, and all this payment will increase the financial cost of keeping a worker on the payroll by a specific percentage. So, because of the cost, well, big companies think twice before hiring, because it costs more to terminate the employment relationship, ”he indicates.
One option would be more flexible forms of contracting, so that dismissal is easier; Dávila assures that this does not mean a measure in favor of the companies to exploit the workers. “That is not recommended, but rather, looking for the efficiencies that are seen from the legal advice side, certain companies sometimes stop selection processes because it is very expensive to dismiss a worker who is not performing correctly.”
Roberto Apunte, professor at SEK International University, affirms that there are options to cope with these labor costs. One option, he indicates, is be more cautious regarding the final costs of the companies, taking into account that tenths, compensation for dismissals or employer retirements must be covered, if applicable, as well as the contributions of affiliation to the IESS of each one of the employees .
“Working capital must be properly managed to always have the necessary resources to cover these obligations. Have a financial backing, calculated, studied. That is a bit of the social contract,” says Apunte. (I)
Source: Eluniverso
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