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Dismissal without just cause costs a legal indemnity

Last verified: 2026-10-27 · Status: Changing

Abroad, many employers can end employment at will; in Colombia dismissal without a just cause listed in the law obliges the employer to pay a statutory indemnity. Since Ley 2466 de 2025, indefinite contracts are the rule, fixed term contracts must be written and cannot exceed 4 years, and disciplinary sanctions need a due process procedure. For an indefinite contract under 10 minimum wages the indemnity is 30 days of salary for the first year and 20 days for each further year.

USD figures use the TRM (tasa representativa del mercado) of COP 3,157.94 per US dollar valid on 27 October 2026, certified by the Superintendencia Financiera and published on datos.gov.co. Conversions are for orientation only.

Key facts

Dismissal indemnity, first year, indefinite contract under 10 minimum wages	30 days of salaryCST art. 64, as of 2026-10-27 · in force
Dismissal indemnity, each additional year, under 10 minimum wages	20 days of salaryCST art. 64, as of 2026-10-27 · in force
Dismissal indemnity, first year, 10 minimum wages or more	20 days of salaryCST art. 64, as of 2026-10-27 · in force
Dismissal indemnity, each additional year, 10 minimum wages or more	15 days of salaryCST art. 64, as of 2026-10-27 · in force
Maximum duration of fixed term contracts	4 yearsCST art. 46; Ley 2466 de 2025 art. 6, as of 2026-10-27 · in force
Monthly minimum wage 2026	1750905 COPDecreto 1469 de 2025 art. 1, as of 2026-10-27 · in force
TRM used for conversions on this page	3157.94 COP per USDTRM certified by the Superintendencia Financiera, valid 27 October 2026, as of 2026-10-27 · in force

The rule

1. If the employer terminates the contract without proven just cause, it owes an indemnity. Fixed term contracts: the salary for the time left to run, and for contracts for a specific work, the time left with a minimum of 15 days. Indefinite contracts for workers earning under 10 minimum wages: 30 days of salary for the first year of service and 20 more days for each later year, proportionally for fractions. Workers earning 10 minimum wages or more: 20 days for the first year and 15 more days for each later year.
Cost to do it: The indemnity itself, on top of final pay, cesantía, prima and vacation owed.
Example: A worker earning COP 5,000,000 a month after 3 years on an indefinite contract receives 70 days of salary, about COP 11,666,667; one earning COP 20,000,000 receives 50 days, about COP 33,333,333. / About US$3,694 and US$10,555.Código Sustantivo del Trabajo, art. 64 as amended by Ley 789 de 2002 art. 28 (Diario Oficial 45.046, 27 December 2002), Art. 64, 2002-12-27 official text · verified 2026-10-27

2. Workers are hired on indefinite term contracts as the rule; fixed term, specific work and occasional contracts remain possible. An indefinite contract lasts while its causes and the work subsist. The worker can resign with 30 calendar days' notice, and no penalty may be agreed for failing to give it.
Cost to do it: No fee.
Example: An offer letter that says nothing about duration creates an indefinite contract. / Not a fee rule.Código Sustantivo del Trabajo, art. 47 as amended by Ley 2466 de 2025 art. 5 (Diario Oficial 53.160, 25 June 2025), Art. 47, 2025-06-25 official text · verified 2026-10-27 · changed: Ley 2466 de 2025 made the indefinite contract the general rule.

3. Fixed term contracts must be written and may not exceed 4 years; otherwise they are indefinite from the start. Contracts under one year may be extended by written agreement, but after the fourth extension not for less than one year, and automatic renewal applies if neither party gives notice 30 days before expiry, always within the 4 year cap. Specific work contracts must be written and describe the work precisely, or they are indefinite.
Cost to do it: No fee. Ending a fixed term early without cause costs the salary for the remaining term.
Example: Ending a 12 month fixed term contract at COP 4,000,000 a month after 4 months without just cause costs 8 months of salary, COP 32,000,000. / About US$10,133.Código Sustantivo del Trabajo, art. 46 as amended by Ley 2466 de 2025 art. 6, Art. 46, 2025-06-25 official text · verified 2026-10-27 · changed: Ley 2466 de 2025 capped fixed term contracts at 4 years, counted from its entry into force for existing contracts.

4. Every disciplinary procedure must respect due process, with at least: formal notice of opening, written statement of the facts, delivery of all evidence, at least 5 days for the worker to respond and present evidence, a reasoned decision, a proportional sanction and the possibility to challenge it. Unionised workers may be assisted by one or two union representatives.
Cost to do it: Management and legal time for each procedure.
Example: Before sanctioning an employee for repeated absences, the employer must notify the charges in writing, share the evidence and give at least 5 days to answer. / Not a fee rule.Código Sustantivo del Trabajo, art. 115 as amended by Ley 2466 de 2025 art. 7, Art. 115, 2025-06-25 official text · verified 2026-10-27 · changed: Ley 2466 de 2025 wrote the minimum disciplinary procedure into the code.

5. The 2026 monthly minimum wage is COP 1,750,905, so the 10 minimum wage line that changes the indemnity table is COP 17,509,050 a month.
Cost to do it: Sets the threshold for the indemnity table.
Example: A worker on COP 17,000,000 a month is under the line and gets the higher table. / The line is about US$5,544 a month.Decreto 1469 de 2025 (29 December 2025), Art. 1, 2025-12-29 official text · verified 2026-10-27

Salary	First year	Each later year
Under 10 minimum wages (under COP 17,509,050 a month in 2026)	30 days	20 days
10 minimum wages or more	20 days	15 days

Indemnity for dismissal without just cause, indefinite contracts (CST art. 64)

Worked example

A foreign group restructures its Colombian team and lets go of a manager earning COP 20,000,000 a month after 3 years, without just cause. It owes 50 days of salary as indemnity (about COP 33.3 million), plus final salary, proportional prima and cesantía with interest, and unused vacation. Larger reductions can trigger collective dismissal rules that need Ministry of Labor authorisation.

Step by step

Put every fixed term or specific work contract in writing and track the 4 year cap.
Document just causes and run the art. 115 disciplinary procedure before sanctions or cause based dismissals.
Calculate the indemnity with the art. 64 table and pay final amounts on the last day.
Check special protections (for example harassment complainants) before any dismissal.

Common traps

A contract without a written fixed term is indefinite from day one.
Renewing fixed term contracts beyond 4 years converts them into indefinite contracts.
Skipping the disciplinary procedure exposes the employer even where the facts justify a sanction.

Sources

← Severance is deposited every year, not only paid on dismissalCorporations and branches need a statutory auditor →