Despido con justa causa, meaning "dismissal with just cause," refers to the legal grounds that allow an employer to terminate an employee without paying severance (indemnización). While this concept exists across all Latin American countries, the burden of proof lies with the employer, and courts interpret just cause strictly in favor of workers.
Common Grounds for Just Cause
Grounds typically recognized as just cause include theft or fraud, workplace violence or harassment, repeated unexcused absences, intoxication at work, willful damage to company property, disclosure of trade secrets, and gross insubordination. However, the specific grounds and definitions vary by country and are often enumerated in the labor code.
Documentation Requirements
Employers must maintain detailed documentation to support a just-cause dismissal. This includes written warnings, investigation records, witness statements, and evidence of the misconduct. In many countries, the employer must follow a specific disciplinary process (proceso disciplinario) before termination. Failure to document properly will result in a court ruling the termination as unjustified, requiring full severance payment.
EOR Relevance
An EOR advises on whether a situation qualifies as just cause under local law, manages the required disciplinary process, and prepares the necessary documentation. This legal guidance is critical because improperly executed just-cause terminations frequently result in labor lawsuits where the employer must pay severance plus additional damages.