Within Colombian legislation, the agreements are governed by the benefits, needs and expectations that they represent for both the company and the worker, says Silvia Pardo, a lawyer specializing in Labor Law at Nixus Capital Humano.
On the one hand, the Substantive Labor Code regulates the labor contract as an agreement between a natural person who provides a service to another, natural or legal, under dependence or subordination and through remuneration.
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However, the service provision model works as a pact made between two parties to assist a task under certain conditions in terms of cost and development, while it is regulated by the Commercial Code if it is an activity. commercial or by the Civil Code if it comes from the exercise of a liberal profession, affirms Blanca Rojas, financial manager of Hays, a global firm specialized in personnel selection.
The specialists consulted describe the pros and cons of each agreement:
Fixed term contract:
- The employee has real stability for the agreed time.
- The compensation for termination of the contract are higher.
- The worker can put in a little more effort in order to achieve the extensions of his contract.
- The employment relationship may end at the expiration of the term, without the payment of any compensation.
- The worker is evaluated and from the result the company makes a decision based on the anticipated expiration of the contract.
- The worker may feel unmotivated, without a sense of belonging and responsibility with their work.
- For the company it represents an administrative wear and tear as it has to continually monitor contractual maturities.
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Provision of services:
- It generates occasional job opportunities that allow quick and short-term employability.
- You can use this type of contract when the company has occasional jobs that do not have a specific but determinable execution time.
- The contract is terminated at any time or once the work for which the worker was requested is completed, therefore, it does not represent an obligation to pay compensation by the employer.
- It does not generate any possibility of growth, stability or motivation in human talent, because it does not determine labor guarantees.
- If not handled properly, it could create professional risks in the face of claims and lawsuits.
- Trial periods and possible compensation cannot be calculated, thus increasing the legal risk for the company.
Indefinite term contract:
- It generates stability and confidence in the worker, while representing greater commitment, a sense of belonging to the company and respect for their work.
- It allows the employee to participate actively in the different programs and internal policies of the organization.
- Remuneration through salaries and benefits, as provided by law.
- It facilitates the acquisition of goods and services in the long term.
- Gives credibility to the organization thereby retaining the most valuable human capital.
- It ends unexpectedly, only if the employer pays the severance pay for termination without just cause, which is sometimes lower in this type of contract for companies.
According to experts, this type of employment contract represents more advantages than disadvantages for the employee and the company, because it determines greater stability and productivity for the parties.