Sources of regulation
Art. 88 of the Venezuelan
Constitution[1] states that
“the law shall adopt measures intended to guarantee stability of labour
and shall establish the benefits to compensate for seniority of service
of a worker and protect him in case of unemployment”.
The primary source relating to labour is the Basic Labour
Act (BLA) of 27 November 1990.[2] Collective agreements are another source of law which often encompass
termination of employment, making particular reference to dismissal for
invalid reasons, procedures and benefits. In practice, tripartite commissions
established through agreements place high priority on problems linked to
dismissal. The case law of labour courts and decisions of the labour inspectorate
(and decisions to settle legal disputes) supplement these sources of regulation,
particularly in the area of immunities.
Scope of legislation
Career officials and white-collar employees in public service
at the national, state or municipal levels are not covered by the provisions
of the BLA in so far as they are governed by the administrative career
regulations. Nevertheless, in any matter not so regulated they may enjoy
benefits through labour legislation applicable to workers in the private
sector. Members of the armed forces and state security corps are also excluded
from the scope of this legislation (secs. 7 and 8, BLA).
All enterprises, establishments, undertakings and businesses,
whether state-owned, in existence or yet to be founded in Venezuela, and
in general any performance of personal service involving employers and
workers in any form whatsoever, are subject to the provisions of the BLA,
the sole exceptions being those explicitly mentioned in the Act (sec. 15,
BLA).
Apprentices, young persons, domestic workers, caretakers,
home workers, professional sports people, rural workers, persons employed
in land, air and inland water transport, seafarers, motorized workers,
actors, musicians, folklorists and other intellectual and cultural workers
and disabled persons are covered by special conditions (Title V, Special
Conditions, BLA).
Contracts of employment
Pursuant to sec. 67 of the BLA, an employment contract
is one whereby a person undertakes to render services to another, under
the control of the latter and in return for remuneration.
There are no statutory provisions for probation periods.
There is a trial period of 90 days for workers assigned to a higher
post, although this can in no way be construed as constituting indirect
dismissal (sec. 103(2), BLA).
In principle, a contract is deemed to be of indeterminate
duration if the parties do not explicitly state the desire to be bound
by an employment relationship solely for a specified task or for a specified
period (sec. 72 et seq., BLA). The following three conditions govern
the conclusion of contracts for a specified period:
- for
a contract for a specified period, blue-collar workers, one year maximum;
- for
a contract for a specified period, white-collar workers, three years
maximum; and
- for
a contract for a specified task, the time necessary for its performance.
In the first two cases, contracts may be concluded only
when the nature of the service warrants it, for example, the provisional
and legitimate replacement of a worker and when Venezuelan workers conclude
contracts to work outside the country. An extension may be granted, although
in the case of two or more extensions the contract is considered to be
of indeterminate duration. The contract is also deemed of indeterminate
duration if, within a month of its expiry, a new contract is concluded
between the same parties, unless the parties clearly demonstrate their
mutual wish to end the relationship.
If, within a month of the termination
of a contract for a particular task, the parties conclude a new contract
for the performance of another task, it will be understood that they were
bound from the outset of the relationship for an indeterminate period.
Termination of employment
Employment may be terminated, under sec. 98 of the
BLA, other than at the initiative of the employer, by mutual agreement
by the parties, for reasons foreign to the wishes of both,[3] and on the resignation of the worker.
Resignation is the unilateral
termination of the employment relationship by the worker. The BLA does
not impose an obligation on the worker to submit written notice of resignation
stating the reason, if any, for such action. Indeed, the BLA provides for
termination of employment by the worker without reason and requires only
the submission of notice ranging from seven to 30 days, depending on the
worker’s length of service (after a month, seven days; after six months,
15 days; and after one year, 30 days). In lieu of notice, in the case of
contracts of indeterminate duration, the worker must indemnify the employer
by payment of a sum corresponding to the wages he or she would have earned
during the notice period (sec. 107, BLA). In the case of contracts
for a specified period or task, the judge may order a worker to pay as
compensation for damages an amount which must not exceed one-half of the
remuneration which would have been due up to the completion of the task
or service (sec. 110, BLA).
However, if resignation is for a justified reason, there
is a 30-day period in which the worker may invoke the right to resign (sec.
101, BLA). Resignation is considered justified when it is based on
a reason prescribed by statute and its financial effects are equivalent
to those of unjustified dismissal (see below). Dishonesty, immoral actions
with regard to the worker or his or her family, insult or serious lack
of respect towards the worker or his or her family, forgetfulness which
jeopardizes safety or health in the workplace, serious breach of the obligations
under the contract of employment, and any act amounting to indirect dismissal
(secs. 100 and 103, BLA) constitute just cause for resignation.
Dismissal is indirect when an employer
who wishes to terminate employment uses indirect means to induce the worker
to resign, and gives cause for justified resignation. Indirect dismissal
is also considered by law to cover the following cases (sec. 103(1),
BLA):
- if
a worker is required to do work which is distinct from that for which
he or she was engaged, or which is incompatible with the worker’s dignity
or qualifications;
- if
a worker is required to perform services which occasion a change of residence
which was not stipulated in the contract or implied in the nature of
the work;
- if
remuneration or grade of the worker’s post are lowered; or
- if
working hours are arbitrarily changed or any similar actions are taken.
Dismissal
According to Venezuelan law, dismissal is the manifestation
of the employer’s desire to end the employment relationship (sec. 99,
BLA). Dismissal is unjustified when the worker has committed no action
to justify it. Such justification must be claimed within 30 consecutive
days after the date on which the worker is informed, or should have been
informed, of the facts constituting grounds for the unilateral termination
of employment by the employer (sec. 101, BLA). This also applies
to reasons relating to the operational requirements of the undertaking
such as collective dismissal and staff reduction without prior notification.
Mass dismissal is classified as the loss of employment by 10 per cent of
the workers in an enterprise employing more than 100 persons, 20 per cent
of more than 50 workers, or ten workers in an undertaking employing fewer
than 50 workers, within a period of three months (sec. 34, BLA).
The contract of employment may be terminated for (sec.
102, BLA):
- dishonesty
or immoral behaviour;
- acts
of violence except in legitimate self-defence;
- insult
or serious lack of respect towards the employer, his or her representatives
or family members living in his or her home;
- deliberate
action or a gross negligent act affecting safety or health in the workplace;
- forgetfulness
or carelessness seriously affecting safety or health in the workplace;
- unjustified
absence from work for three working days within the period of one month;
- material
damage to the plant, tools, furniture belonging to the enterprise, raw
materials, finished or partly processed products, plantations or other
relevant property, whether deliberate or resulting from serious negligence;
- disclosure
of secrets of production, construction or process;
- serious
breach of the obligations under the contract of employment; or
- abandonment
of work, which is defined as:
- leaving
the workplace inopportunely or without valid reason during working hours,
without authorization from the employer or his or her representative;
- refusal
to perform the assigned tasks under the agreed terms of the labour contract
or legislation. However, the refusal to undertake work
which might create an imminent or serious hazard to the life or health
of the worker is not considered abandonment; or
- unjustified
absence by a worker responsible for a process or machine when such absence
entails disruption in the rest of the service or production
process.
Venezuelan law provides that certain workers, for various
reasons, are irremovable and may not be dismissed, transferred or employed
in less favourable working conditions without just cause approved in advance
by the labour inspector (sec. 449, BLA). This protection is, generally,
reserved for trade union promoters and board members, promoters of collective
agreements and workers involved in collective disputes against employers,
but has also been extended to other categories of persons, whether or not
they are linked to trade union activity or collective relations. The following
may therefore enjoy protection under the BLA:
- a
worker who has been suspended from work (sec. 94);
- a
pregnant woman, during pregnancy and up to one year after confinement
(sec.
384);
- an
adoptive mother, during the year following adoption (sec. 384(1));
- board
members of a trade union, during their management and up to three months
after the expiry of the term for which they were elected (sec. 451);
- promoters
(and applicants for memberships), from the date of notification until
registration of the union, which should not exceed three months (sec. 450);
- the
trade union delegate aboard a ship flying the Venezuelan flag (sec.
356);
- workers
during trade union elections, from the notice of convocation until the
election itself, a period which should not exceed three months within
a period of two years (sec. 452);
- workers
involved in a collective labour dispute (secs. 458 and 506);
- workers
affected by a draft collective agreement, during the period of negotiations
and up to 180 days, which may be extended by 90 days in exceptional circumstances
(secs. 458 and 520);
- workers
who accept changes in working conditions for economic reasons which jeopardize
the work or existence of the enterprise, during the period the agreement
is in force (secs. 525 and 526);
- workers
affected by the request procedure of the standard-setting labour meetings,
during the meeting session (secs. 528 and 533(f));
- workers
who are appointed labour directors or substitutes during their terms
in office (sec. 617); and
- members
of the safety and health committee of the enterprise while they are exercising
their functions on the committee (sec. 37).[4]
Notice and prior procedural safeguards
Notice of dismissal must be made in writing and state the
reason on which it is based. An employer is not permitted to subsequently
rely on a reason for dismissal that is not specified in the notice. Where
a dismissal has been issued orally, the absence of a written document does
not prevent an employee who wished to challenge his or her dismissal from
using other evidence to prove that he or she has been dismissed (sec.
195, BLA). Furthermore, the employer is required to inform the district
labour-stability judge of the dismissal, stating the reasons justifying
his or her action within five working days. Failure to do so will be interpreted
as the employer’s acknowledgement of lack of justification for the dismissal
(sec. 116, BLA).
Notice in the case of unjustified dismissal must be conveyed
in advance according to the following schedule (sec. 104, BLA):
- after
one month’s service, one week;
- after
six months’ service, two weeks;
- after
one year’s service, one month;
- after
five years’ service, two months; and
- after
ten years’ service, three months.
In lieu of notice, the worker should be paid a sum equivalent
to the remuneration he or she would have received during the corresponding
period (sec. 106, BLA). In addition,
a worker will receive compensation in lieu of notice as follows (sec.
104, BLA):
- 15
days’ wages when the period of service is more than one month but six
months or less;
- 30
days’ wages when it is more than six months but less than one year;
- 45
days’ wages when it is one year or more;
- 60
days’ wages when it is two years or more but less than ten years; and
- 90
days’ wages when it is ten years or more.
The Ministry of Labour may suspend collective dismissals,
for social reasons, by a special ruling and submit the dispute to arbitration
if the parties cannot reach an agreement, or if reasons of an economic,
technological or structural nature are invoked (sec. 34, BLA). The
trade union to which the workers belong or, in the absence of a trade union,
the workers themselves must be notified of the employer’s application.
There are no express provisions for compensation in this case. The worker
is entitled to a period of notice, as follows (sec 104, BLA):
- after
one month’s service, one week in advance;
- after
six months’ service, two weeks in advance;
- after
one year’s service, one month in advance;
- after
five years’ service, two months in advance; and
- after
ten years’ service, three months in advance.
In lieu of notice, the worker may be compensated with a
sum equivalent to the remuneration he or she would have received during
the corresponding period (sec. 106, BLA).
Legislation (sec. 453, BLA) lays down an administrative
procedure for requests submitted by the employer to dismiss, transfer or
justifiably lower the working conditions of the worker enjoying trade union
immunity. Similarly, a statutory provision provides (sec. 454, BLA)
for these workers the procedure of reinstatement (reenganche) in
the event that the employer may have dismissed, transferred or lowered
the working conditions of a worker without fulfilling the above-mentioned
requirements.
Severance pay
In the case of unjustified dismissal in contracts for a
specified task or service, the employer is obliged to pay compensation
for damages in an amount equal to that of the remuneration which would
have been due up to the completion of the task or expiry of the period
(sec. 110, BLA).
If the employer insists on dismissing the worker he or
she must pay, in addition to the salaries which the worker would have earned
during the legal proceedings, compensation amounting to ten days’ wages
if the employee’s length of service is between three and six months; 30
days’ wages if the length of service is six months or more, and then 30
days’ wages for each year of service, up to a maximum of 150 days’ wages
(sec. 125, BLA). Moreover, the employer may, upon dismissal, double
the severance allowance and thereby avoid legal proceedings for reinstatement
mentioned below and the payment of wages accrued during the course of such
proceedings (sec. 126, BLA).
In accordance with the 1997 revision of the law, the worker
has the right to a seniority bonus that accrues interest and that is to
be paid monthly or upon termination of the employment relationship at the
worker’s initiative (sec. 108, BLA). This is the equivalent of:
- after
three months of service, five days’ wages;
- after
the second year of service, an additional two days’ wages per year of
service, up to a maximum of 30 years.
When the employment relationship ends, the worker has a
right to a seniority benefit, up to 75 per cent of which can be payable
in advance. The amount is:
- 15
days’ wages or, if monthly contributions or deposits have been made,
the proportion of this amount remaining to be paid, when the period of
service
is between three and six months;
- the
difference between the amount contributed or deposited monthly and 45
days’ wages when the period of service is more than six months but less
than
one year; or
- the
difference between the amount contributed or deposited monthly in the
year in which the employment relationship ended and 60 days’ wages, after
the
first year of service, and provided the worker has been working for more
than six months of the relevant year.
Bankruptcy is one of the hypothetical reasons for the termination
of employment and in such cases the rights derived from the relationship
of employment are preferential. Payments to workers are handled independently
of bankruptcy proceedings by creditors. The amount of compensation varies
depending on whether the bankruptcy was fraudulent or fortuitous. If bankruptcy
is deemed to be caused by third parties or through negligence, the worker
has the right to double compensation, whereas if bankruptcy has resulted
from unforeseen or inevitable events it is considered fortuitous.
Avenues for redress
Reinstatement of the worker represents an option between
admission to employment and compensation by the employer.
Depending on the circumstances and nature of the termination,
the presiding judge may rule that the worker should be reinstated and back
wages paid. Rehiring is also an option for the employer (secs. 125 and
126, BLA). However, temporary, provisional, occasional and domestic
workers are not entitled to reinstatement. Likewise, employers who regularly
employ fewer than ten persons are not obliged to reinstate dismissed workers
(secs. 112 and 117, BLA).
Once the type of dismissal has been established, the judge
must give notice to the employer to submit his or her rebuttal within five
working days, initiating a probation period of eight working days, unless
the judge deems it unnecessary. When this period has expired, the judge
must pronounce a verdict on the justification or inadmissibility of the
dismissal in a time limit not exceeding 15 working days, provided that
a request has not been made for the constitution of a tribunal to pronounce
a verdict (secs. 117, 118 and 119, BLA).
Appeals against the verdict may be lodged with the Higher
Labour Tribunal which will decide on the substance of the dispute and confirm
or reject the plea for reinstatement and payment of forfeited wages. No
appeal is allowed to the court of cassation against a decision of this
Tribunal (secs. 121, 122 and 123, BLA).
Further information
[1] 1961 Constitution, amended in 1979 and
1983.
[2] Rules
relating to remuneration and dismissal were amended in 1997 as a result
of a tripartite agreement in April of that year.
[3] For example, death or incapacity of the worker which makes it
impossible for him or her to continue rendering his or her services and force
majeure in case of plant closure or fortuitous bankruptcy.
[4] Basic Act on prevention, working conditions
and the working environment.
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