In Colombia, companies are not obliged to request authorization from the unions to carry out downsizing processes.

However, it is advisable to review if the collective bargaining agreements entered into with the unions include any obligation in this regard.

According to Colombian labor law, redundancy, economic reasons and the fact that a role is no longer required by the employer will be construed as unilateral terminations without cause giving rise to the payment of a legal indemnity according to rules that depend on the type of labor contract and the length of service.

However, Article 67 of Law 50 of 1990 states that if the number of employees to be terminated exceeds the percentages calculated upon the total number of employees as established in the chart herein below in a six month period, the Ministry of Labor must authorize the terminations.

Number of employees Percentage calculated upon the total number of employees
> 10 < 50 30%
> 50 < 100 20%
> 100 < 200 15%
> 200 < 500 9%
> 500 < 1000 7%
> 1000 5%

The Ministry of Labor usually authorizes massive dismissals when the following situations are evidenced (i) the elimination of procedures, equipment, work systems, production units to improve productivity or quality thereof, or (ii) that the company is facing a financial situation preventing it from fulfilling its obligations, or (iii) that there are technical or economic circumstances such as the deficiency of raw materials, or (iv) any other similar event.

It is worth mentioning, that companies would not require an authorization from the Ministry of Labor when the above mentioned percentage is reached if a negotiation to terminate the labor contracts by mutual consent is accomplished.

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