As previously indicated, employees with at least six months of seniority and who work under an indefinite-term contract at a company with at least 30 employees are protected by law, in that their employers cannot terminate their contracts without a solid reason. Otherwise, within one month of receiving the termination notice, such employees may launch a lawsuit. The “re-employment litigation” is the name given to this action.

If the parties agree for reemployment via required mediation or in the case that the court rules the contract termination is invalid, the employee can apply for reemployment with the employer.

In this sense, the employer has one month to recruit the employee under the same terms as before the termination.

The employee who filed the reemployment case may or may not be reemployed by the employer. If the employer does not employ the employee within one month and under the same terms as before the termination, the employee is entitled to compensation equal to 4 to 8 months’ gross wage. On the other hand, the employee’s wage and other entitlements are paid for a period of up to four months until the court’s ruling is finalized (Art. 21 of LC). Even if it takes more than four months for a court judgment or mandated mediation to declare the employment contract illegal, the employee is only entitled to up to four months’ wages.

The payment, wage, and other rights are determined by the court or special arbitrator based on the earnings on the date of the case (LC Art. 21/4).

Within ten working days of receiving notice of the final court ruling or special arbitral award, the employee must apply for reemployment with the employer. If the employee does not apply within this time frame, the employer’s termination will be considered lawful, and the employer will be exclusively accountable for the legal repercussions (Art. 21/6 of L).

If the employee is rehired, the compensation instead of notice and the severance pay provided in advance are removed from the pay for the period until the court ruling is finalized (LC Art. 21/5). Employment of the employee’s wage and other entitlements for up to four months.

In case the employee is rehired, the money instead of notice and severance pay received in advance will be deducted from the pay the employee receives. If the employee is not rehired by the employer, the employee’s compensation is not subject to a notice period, and the payment for the notice period is not made in advance (LC Art. 21/5).

To conclude, if an employer annuls an employment contract of an employee who is covered by employment security without a justifiable reason and if an employer does not reemploy the employee, the employee is entitled to severance pay, a no compensation payment of 4 to 8 months of the employee’s wage; and the employee’s wage and other entitlements for up to four months (if the employer has not provided a notice period or made the payment for the notification period in advance).