Venezuela

A. Hiring of employees (onboarding)

Mandatory employer requirements

According to the law, any natural person or legal entity can be an employer. In this sense, any em-ployer in Venezuela must comply with the following:

• Join the mandatory housing savings fund and enrol all its workers within 30 days of their hiring.
• Register their employees in the mandatory social security systems within 3 days after they are hired.
• Register at the INCES (National Institute of Socialist Training and Education) as a work en-tity within 45 working days after its incorporation.
• Register in the National Registry of Work Entities (RNET for its acronym in Spanish).

Probation periods

It is understood that the probation period in Venezuela has a maximum term of 30 days counted from the beginning of the employment relationship. During the “probation period” the employee can be dis-missed without a justified cause and the employer cannot be compelled to pay the compensation for dismissal.

Hiring checks

Medical examination

There is a legal requirement to perform medical checks upon hiring. However, pregnancy or HIV test-ing are prohibited. The medical checks seek to assign the liabilities for feasible occupational diseases or accidents.

Criminal background check

The employer is not allowed to request the submission of a criminal record as a condition for employ-ment.

Reference and education checks

The reference and education checks can be performed by the future employer.

Diversity & inclusion

The law requires that at least 90% of the payroll be Venezuelans (this requirement is for employers that have 10 workers or more). The compensations of foreign workers shall not exceed 20% of those paid to Venezuelan employees.

Employers are also required to maintain a number of employees with disabilities, 5% of their total pay-roll, in jobs that are adequate for their skills and abilities.

The Venezuelan labour legislation demands that for equal work, carried out in the same position, working hours and efficiency conditions and equal salary must correspond.

Types of employment contracts

• Indefinite term contracts: the law presumes that all employment relationships are for an indef-inite time. The parties must unequivocally express in the contract that the relationship is for a specific time or work to refute this presumption.
• Fixed-term contracts: can only be done for a year and can be prorogued, but successive fixed-term contracts are not unlimitedly possible. This type of contract can be done only for specific cases established in the law.
• Project-based contracts: They can last for all the time required for the execution of the project and will end with the termination of it (meaning the worker's part of the project is completed). In the construction industry, successive project-based contracts are unlimitedly possible.

Specific rules for executives

According to Venezuelan law, executives constitute another type of worker. Management employees are those involved in the decision-making process and those who are representatives of the employer before other workers and third parties and may replace them in their functions. The management em-ployees can be dismissed without needing a just cause.

Language requirements

According to the Venezuelan Labour legislation, all provisions communicated to the employees (or-ders, instructions, training manuals, contracts) must be in Spanish or an indigenous language if the employee belongs to an indigenous people. If for technical reasons it is necessary to use another lan-guage, the equivalent to Spanish must be included.

Equal Pay

There is a general disposition related to equal pay for equal work. However, there is no disposition related to equal pay based on gender or sanctions.

Remote Work

There is no specific legislation for remote work. Bills have been submitted to the legislative body, but the process to convert them into law has not been initiated.

B.  Termination of employees (Offboarding)

Kinds of dismissal

Normally, dismissal may be for just cause or retirement of the employee for just cause, and it doesn’t depend on the type of contract.

The employment relationship may be terminated by dismissal, resignation, the voluntary agreement of the parties, or for reasons beyond the control of the parties.

Dismissal motivation

According to the law, there are 11 just causes of dismissal:

i. Immoral conduct at work

ii. Assault, except in self-defence.

iii. Injury to the employer, his representatives, or family living with the employer.

iv. Gross negligence affecting occupational health and safety.

v. Imprudence seriously affects occupational safety or hygiene.

vi. Unexcused absence for 3 working days in a month.

vii. Material damage caused intentionally or with gross negligence to tools, materials, or work products.

viii. Disclosure of manufacturing, fabrication, or process secrets.

ix. Serious failure to comply with work obligations.

x. Harassment at work or sexual harassment.

xi. Abandonment of work:

a. The untimely and unjustified departure of the employee from the work site during working hours, without the employer's permission.

b. Refusal to work on the tasks to which he/she has been assigned, provided they are following the employment contract or the Law. It will not be considered abandonment if the work is an imminent and serious danger to health or life.

c. Unjustified lack of attendance to work by the worker in charge of a task or machine, when such lack means a disturbance in the progress of the production process, the rendering of the service, or the execution of the work.

The employer can only dismiss the employee following one of the aforementioned dismissal causes, if not, the dismissal will be considered performed without just cause. Likewise, the employee can stand before the Judge when he does not agree with the dismissal, to make the Judge decide if the dismis-sal was justified or not. If he decides the dismissal was not justified, he can order the rehiring of the employee and payment of the pending wages.

Currently the National Executive has decreed the general labour immobility of the employees where none employee can be dismissed without a justify cause previously validated by the Labour Admin-istration.

Notice period

The law only established a notice period in case of resignment of the worker without just cause. The employer must pay the employee the corresponding benefits up to the date on which he/she rendered services.

Duration of uninterrupted work                 Advance notice

1 month                                                             1 week

6 months                                                           15 days

1 year                                                                 1 month

Severance pay

In case of dismissal without just cause there are two consequences:

• That the employee initiates a proceeding in the Court, which results in the re-hiring of the em-ployee and payment of his or her, lost wages.
• If the employee doesn’t want to be re-hired, the employer must pay an indemnity equivalent to the amount due to her/him social benefits. This consequence also applies when the relation-ship is terminated for reasons beyond the employee's control.

Dismissal formalities

According to the law, the employer must notify the Labour Court about the dismissal, indicating the causes that justify the dismissal, in the 5 working days following the dismissal. If the employer doesn’t comply with this, it would be recognized that the dismissal was done without a just cause, and the employee can ask for re-hiring.

However, there is a labor immovability decree in force, which requires that the dismissal be previously qualified by the Labour Administration. .

Special dismissal protection

Currently, dismissal without just cause previously qualified by the labor inspector is prohibited. This prohibition is valid until December 28, 2022, but is likely to be extended to next year (this regulation has been in force for 20 years). This disposition applies to the workers in an open-ended contract (after the first month), the workers in a fixed-term contract as long as the term of the contract has not expired and the workers in a project-based contract as long as the worker's part of the project has not been completed. Normally this kind of protection is reserved for certain types of situations (e.g. preg-nancy, adoption, worker’s children with disabilities), but it was extended to almost all types of workers, as mentioned above.

Legal means of employees

If the employee is dismissed without a just cause, he/she can go to the Labour Administration, in order to require for re-hiring and payment of lost wages, within 30 working days following his dismissal.

Specific rules for executives

These employees are not protected by such regulation, and can be dismissed without a just cause.

Collective dismissals

Collective dismissal will be considered when it affects 10% or more of the workers (in case there are more than 100 workers), 20% (50 workers), or 10 (less than 50 workers), in a period of 3 months or longer if the circumstances make it critical. In this case, the Ministry of Labor may suspend it for rea-sons of social interest, by means of a special resolution.

Get in touch

Xavier Korody
Venezuela
xkorody@deloitte.com