When that delicate moment in which the employer has decided to terminate an employment contract through dismissal without justified cause has arrived, there are certain important aspects that must be observed in order to avoid falling into a dismissal that violates the labor code and may bring labor contingencies for the company, such as a sue for reinstatement of the worker to the same position he/she held before, or the payment of a double antiquity indemnity or the payment of an indemnity for a position of trust if it is a trusted employee.
The first thing to know is that the Nicaraguan Labor Code allows the employer to unilaterally terminate an employment contract in two ways: with justified cause and without justified cause.
Herein, we will address the important legal aspects around dismissal without justified cause or based on article 45 of the Nicaraguan Labor Code.
So what should the employer observe when he wants to apply a dismissal without justified cause?
- That the worker has been hired with an indefinite contract. Dismissal without justified cause is only applicable when we are dealing with an indefinite labor contract, which is that type of contract that does not establish a period of duration of the employment relationship. This type of contract is the most common contract executed in Nicaragua. However, although rare, it could also be the case that the employee was hired with a definite contract, which is one that does establish a period of duration of said contract. In the case of definite contract, the employer cannot proceed with a dismissal without justified cause, since it is exposed to a demand from the worker for breach of contract and its corresponding payment of damages that are usually calculated according to the salary not received by the worker for the months remaining to complete the definite labor contract.
- That this type of dismissal does not require giving a “pre-notice” to the worker, that is, it can be immediate, which means that if it is applied immediately, the worker has no obligation to continue providing services for the company. At the time of notifying, the worker must be actively working, that is, he/she does not have to be suspended for any of the causes mentioned in articles 37 and 38 of the Labor Code, such as being on sickness, accident or maternity benefits, nor being on vacation, since article 80 of the Labor Code establishes that while the worker is on vacation, the employer must not adopt or communicate any measure against him/her.
- That the letter of notification of the dismissal does not mention any explanation, reason or cause for the dismissal other than to establish that it is applied in accordance with article 45 of the Labor Code. Mentioning a cause for dismissal in the letter could lead to the worker demanding (i) his or her reinstatement, considering this dismissal violates article 48 of the Labor Code, which establishes that to dismiss for justified cause, the employer must have the authorization from the Departmental Labor Inspector, who cannot resolve without hearing the worker; or, (ii) that the payment of compensation for a position of trust be ordered, which is paid when the worker has a position of trust and the dismissal has been in violation of the law. This consideration has been stated by the National Labor Appeals Court in numerous judgments, such as Judgement No. 493/2015 of 5pm on June 18, 2015; Judgment No. 462/2012 at 10:25 am on October 19, 2012; Judgment No. 51/2012, at 10:35 am on February 17, 2012 and Judgment No. 25/2011, at 10:15 am on December 15, 2011, among others.
- That in case of being a women who is being dismissed, she is not pregnant, since article 144 of the Labor Code prohibits it, except for justified cause proven before the Labor Ministry.
- That the worker to be dismissed is not the director of a company union, since in accordance with article 231 of the Labor Code, he/she enjoys union jurisdiction and cannot be dismissed except for justified cause proven before the Labor Ministry.
- That the worker to be dismissed is not a member of the Joint Commission for Occupational Hygiene and Safety (“CMHST”), since in accordance with article 47 of Law 618 “General Law on Occupational Health and Safety”, article 20 of its Regulations and Article 13 of the Amended Ministerial Resolution on CMHST In the Companies, the verification of the justified cause of dismissal of this person must be requested before the Labor Ministry.
Non-observance or non-compliance with the aforementioned provisions would cause that the dismissal to be considered a violation or illegal, which in accordance with article 46 of the Labor Code gives rise to the worker demanding his/her reinstatement before the Labor Judge, in the same position he/she performed and in identical working conditions, the employer being obliged, if the reinstatement is declared valid, to pay the wages no longer received and to reinstate him/her. When the reinstatement is declared valid, under certain conditions the employer may have the option of not complying with said reinstatement but must pay the worker, in addition to the antiquity indemnity, a sum equivalent to one hundred percent of it. In accordance with article 47 of the Labor Code, in the case of a trusted worker, there will be no reinstatement, but the employer must pay as compensation an amount equivalent between two months and up to six months of salary, as long as the worker has a minimum of one continuous year of work, without prejudice to the payment of other benefits or compensation to which the employee is entitled.