by María José Albacete from the legal and notarial department of RSM UY.

Beginning of the employment relationship

Regarding entry into the employment relationship (always referring to employment relationships of dependents), our legislation enshrines freedom of contract, with the limitation of respect for the principle of non-discrimination, and certain exceptions, among which are: 

 

Specific provisions that may exist in wage council awards and collective agreements. 

 

Quota for workers with disabilities (Laws 18,651 and 19,691): the number of quotas will depend on the number of permanent employees the employer has. 

 

Employment quota for African descendants (only applies to the public sector - Law 19,122) 

 

Employment quota for trans people (only applies to the public sector – Law 19,684). 

 

An example of an exception to this rule is teleworking contracts. In the case of these, the Law that regulates them (19,978) and its Regulatory Decree (86/022) expressly establishes that they must be issued in writing.

 

Labor contracting according to duration

 

There are two modalities: 

 

Indefinite duration contracts: these are those that are not subject to any type of deadline. It is the typical Employment Contract, which is an expression of the principle of continuity. It has a vocation for durability and extends over time. 

 

Fixed-term contracts: These are those whose duration is established at the time the contract is signed. In turn, these may have a “certain” term (they are those whose expiration date is established at the time of celebration, for example: “for one month”, “until 12/31/2025”, etc.) or “uncertain”, when the expiration of the contract coincides with the fulfillment of the contractual object (e.g. contract for work) or the fulfillment of a condition (e.g. substitution contract).

 

Requirements for fixed-term contracts

 

- That the term, whatever its type, is expressly provided for by the parties. This is why it is advisable to draft term contracts in writing, as it serves as evidence. The burden of proof of temporary employment falls on the employer. 

 

- That responds to objective questions that justify it. 

 

- As a consequence of the principle of continuity that governs labor law, it must be kept in mind that it is not advisable to enter into successive term contracts, since they are usually considered by judges as contracts of indefinite duration. This means that if the relationship ends after 3 or more successive term contracts, the court considers that the nature of the relationship has changed to “indefinite duration” and orders the payment of compensation for dismissal.

  

As an example, they are term contracts: term contracts, seasonal contracts, substitution contracts, per-work contracts, seasonal contracts, temporary contracts, occasional contracts, etc.

 

Preference in Uruguayan law for contracts of indefinite duration

 

This is reflected in the following: 

 

- If at the time of the contract, nothing is specified (either verbally or in writing), it will be presumed that it is a contract of indefinite duration. 

 

- If a term is agreed upon and the contract continues beyond it, it automatically becomes a contract of indefinite duration. 

 

- The uninterrupted succession of term contracts is usually viewed as a contract of indefinite duration, unless there is an objective and real justification. 

 

- A contract of indefinite duration can never be transformed into a term contract.

 

Termination of the employment relationship by unilateral will of the employer in both types of hiring

 

1. Contract of indefinite duration:  

 

It is worth highlighting that in our legal system, the employer does not have to justify the dismissal, against which the obligation to pay compensation is imposed (improper relative stability regime). 

 

This means that if the employment relationship ends at the unilateral will of the employer (dismissal), the employer must pay the severance compensation that corresponds to the employee's seniority, and without prejudice to special dismissals in legal situations of stability (e.g. common illness, pregnant employee, etc.), which involve the payment of special compensation. Except in the case of dismissal due to obvious misconduct.

 

2. Definite duration contract

 

In the case of term or term contracts, once the same is reached, the contract ends, and there will be no right to the collection of compensation for dismissal, since there is no “dismissal”, in addition to the fact that they are expressly excluded by the article. 1 of le Laye 10,570 in its 2nd paragraph. 

 

Likewise, in the event that the cessation of the relationship due to the advent of the agreed period (certain or uncertain) takes place in legal situations of stability (sick leave, work accident, pregnancy), neither the dismissal compensation nor the special dismissal that is regulated for the case.  

 

In the event of early termination of the term contract (that is, before the arrival of the deadline – which can sometimes be easy to determine, but in other cases, such as in the case of a construction contract, it can give rise to conflict -), There are different criteria at the level of doctrine and jurisprudence regarding the liquidation of the damage that the employee can claim:

 

The employee hired on a term basis will have exactly the same rights as the worker with an indefinite-term contract, except for the IPD.

 

  • Application of severance pay, equating early termination to common dismissal is the case of an indefinite-term contract. 

 

  • Application of civil law rules on compensation matters. This means quantifying the damage that the employee suffers as a consequence of the early breaking of the relationship, what he would have received and did not receive: it would be the amount of legal salaries and benefits (bonus, leave and vacation salary in principle and those that correspond if agreed to by someone else contractually) stopped receiving until the expiration of the period stipulated in the contract.  

 

  • Application of a combined mechanism, which leaves any of the two previous compensations at the option of the employee; and  

 

  • Possibility of cumulative compensation, that is, severance pay plus compensation for damages. 

     

If you require more information or advice on the subject, do not hesitate to tell us.

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