Types of employment contracts in the Dominican Republic
The Dominican Republic's Labor Code establishes that employment contracts can be for an indefinite period, for a fixed term, or for a specific project or service. Seasonal and temporary contracts are also recognized.
When the work is of a permanent nature, the contract formed is for an indefinite period.
However, there is nothing to prevent the employer from guaranteeing the worker that they will use their services for a certain period of time.
In principle, all employment contracts are presumed to be for an indefinite period. Consequently, Article 34 of the Labor Code categorically states that: “(…) Employment contracts entered into for a certain period of time or for a specific work or service must be written.”.
In this work we will focus on contracts for a certain period of time and those for a specific work or service.
Conditions for contracts for specific works or services
Under the terms of Article 31 of the Labor Code, the employment contract may only be entered into for a specific work or service when required by the nature of the work.
The most common cases of this type of employment contract are represented by construction workers, but they are not exclusive to that type of contract.
With the intention of preventing fraud against workers' rights, the legislator stipulated that: “When a worker works successively with the same employer on more than one specific project, it is considered that there is an indefinite-term employment contract between them.”
Our legal standard considers it successive work when a worker begins working on another project for the same employer, which began in a period of no more than two months after the previous one has ended. The employment contract of workers belonging to crews that are interspersed between several works in charge of the same employer is also considered to be an indefinite-term employment contract.
Conditions for fixed-term contracts
Employment contracts can only be for a certain period of time in one of these cases:
- 1. If it is in accordance with the nature of the service to be provided.
- 2. If its purpose is the temporary replacement of a worker in case of leave, vacation or any other temporary impediment.
- 3. If it is in the best interest of the worker's stakeholders.
As can be seen, our legislator has placed limits on the conclusion of fixed-term employment contracts and has indicated in a restrictive manner the cases in which the conclusion of a contract for a certain period of time is appropriate.
Employment contracts entered into for a certain time or for a specific work or service outside of the cases stated in articles 31 and 33 of the Labor Code, or to circumvent the provisions of that Code, are considered to be for an indefinite time.
What rights do workers have under a contract for a specific period of time or for a specific project or service?
Regarding indefinite-term employment contracts, there are no major complications concerning their scope and the rights they confer on workers. However, there is considerable confusion regarding the rights of workers with fixed-term contracts or contracts for a specific project or service.
Over time, a harmful interpretation of this type of contract has become entrenched, detrimental to the interests of workers. This interpretation is not limited to those without in-depth knowledge of Dominican Republic labor law; it extends to labor lawyers and even some sectors within the Ministry of Labor.
Our Labor Code, in its article 72, prescribes that: “Contracts for a specific service or work terminate, without liability for the parties, upon the provision of the service or the completion of the work.”
Article 73 of the Labor Code stipulates that: “Contracts for a fixed term terminate without liability for either party upon expiration of the agreed term. If the worker continues to provide the same services with the employer's knowledge, their contract will be for an indefinite term and will be considered to have had this character from the beginning of the employment relationship.”
The wording of these articles, in my opinion, is quite clear. In cases where an employer and an employee have entered into this type of contract, it will be terminated without liability for either party upon its expiration or the completion of the service or work that is the subject of the contract.
If the contract has been executed, they are not entitled to employment benefits.
Therefore, workers under this type of contract will not have the right to claim employment benefits once the term established in the contract has expired or with the execution of the work or service for which they have been hired.
However, it is important to note that the exemption from liability is established when the contract for a certain time or for a specific work or service has been completed in its entirety.
Prohibition of eviction against workers with fixed-term contracts.
While it is true that fixed-term contracts and contracts for specific works or services terminate without liability for the parties upon fulfillment of the contracted time or upon completion of the specific work or service, Article 75, paragraph 1, It prohibits the employer from exercising eviction against those workers to whom he has guaranteed the use of his services for a certain time.
Therefore, an employer cannot unilaterally terminate an employment contract by exercising the right to dismissal, since the legislator has deprived him of that power.
- If you're interested in learning more about eviction, you can read this article: LABOR EVICTION IN THE DOMINICAN REPUBLIC (2022)
Dismissal of workers with fixed-term contracts or contracts for a specific project or service
If the worker violates the stipulations of Article 88 of the Labor Code, he may be dismissed.
However, pursuant to the provisions of Article 95 of the Labor Code, “if the employer does not prove the just cause invoked as the basis for the dismissal, the labor court will declare the dismissal unjustified and the employment contract terminated due to the employer and, consequently, will order the latter to pay the worker the following amounts;
(…) 2nd. If the contract is for a certain time or for a specific work or service, the greater sum between the total wages remaining until the expiration of the term or until the completion of the agreed service or work and the sum that would have been received in case of dismissal, unless the parties have agreed in writing to a higher sum.”
From reading the aforementioned article, it can be inferred that a worker hired under a contract for a certain time or for a specific work or service, has the right to claim payment of his labor benefits due to an abusive exercise of the right to dismiss granted to employers, when the dismissal is unjustified.
If the dismissal is declared unjustified, the worker will be entitled to compensation with the payment of the total sum of the wages that are missing until the expiration of the contracted time or until the conclusion of the agreed work or service, if that sum is greater than the values that he would have received in case of dismissal.
Also, the parties may agree in the contract they sign for a certain time or for a specific work or service, a specific sum and the court shall only accept said clause if the sum is greater than the other two options listed in article 95, ordinal 2 of the Labor Code.
Rules for reducing staff hired for a specific project or service
Notwithstanding the foregoing, our legislator was forward-thinking in establishing that: “If, in the course of carrying out the work or part of it, there is a need, justified by the nature of the work, to reduce the number of workers, the rules established in article 141 shall be followed.”
To better understand the scope of that mandate, let's look at what Article 141 of the Labor Code states: “In the event that a company needs to reduce its staff, for reasons authorized by law, the reductions must be made in the following order:
1. Single foreign workers; 2. Married foreign workers; 3. Foreign workers married to Dominican citizens; 4. Foreign workers who have fathered Dominican children; 5. Single Dominican workers; 6. Married Dominican workers.”
In this regard, the employer must request from the Ministry of Labor, through the corresponding Local Representation, a request for a definitive reduction of its staff, by submitting a written document (form DGT-1), in which it will indicate the reasons for the planned terminations, the names and surnames, personal identity card number and series of each worker who may be affected, as well as their respective addresses.
If the Director General of Labor approves the termination of employment contracts, the employer must pay the financial assistance provided for in Article 82 of the Labor Code within a period of ten (10) days.
This procedure is regulated by Resolution No. 32/93 issued by the then Secretary of State for Labor, Dr. Rafael Alburquerque, on November 17, 1993.
This reduction will be implemented according to the needs of the job.
In order to determine the duration of the employment contract for specific services in a project whose execution is carried out by various specialized workers, it is determined by the nature of the work entrusted to the worker and by the time necessary to complete said work.
Suspension of the employment contract of workers with contracts for a certain time or for a specific work or service.
Employment contracts for a specific period or for a specific work or service are subject to the grounds for suspension established for employment contracts for an indefinite period in accordance with our labor regulations.
In that regard, Article 48 of the Labor Code establishes that: "The reasons for suspension can affect all employment contracts in force in a company or only one or several of them."»
As we can see, the suspension can affect all current employment contracts within a company. In this regard, it is important to note that some of the grounds for suspension established in Article 51 of the Labor Code cannot be applied to fixed-term or project-based employment contracts. This point will be analyzed in greater detail in a future installment.
Obligations of employers in contracts for a fixed term or for a specific work or service
As can be seen, fixed-term employment contracts, as well as those agreed upon for a specific work or service, terminate without liability for the parties upon fulfillment of the agreed term.
However, as with contracts for specific works or services, their early termination entails liability for the parties.
As established in the first paragraph of article 75 of the Labor Code, the employer cannot exercise the concept of dismissal against a worker who has been guaranteed a job for a certain time.
The legal logic applied by the legislator to foresee this condition, in my opinion, is based on the need to give guarantees to those workers who decide to leave a previous job because of promises of better working conditions made by another employer.
Similarly, with this type of contract, highly skilled technical or professional workers can decide to change their residence within the country or even come from abroad with the guarantee that their employer cannot arbitrarily terminate their employment contract and throw away all the effort, expenses, and sacrifices that the worker has incurred to accept the job.
The prohibition against dismissing a worker under a fixed-term contract protects the worker's rights regarding job stability and does not infringe upon the employer's rights in the event that the hired worker "does not measure up," since if the worker commits one of the offenses listed in Article 88 of the Labor Code, he may be dismissed by his employer.
Right to Social Security
Workers under a fixed-term employment contract or for a specific project or service are entitled to enjoy the benefits offered by the Dominican Social Security System, and therefore must be registered with the Social Security Treasury.
Acquired rights in relation to workers with contracts for a certain period of time or for a specific work or service.
They are also entitled to vacation time if their contract extends for more than one year. This is because Article 177 of our labor law establishes that: "Employers have the obligation to grant to every worker a vacation period of fourteen (14) working days, with full pay, (...)\».
In accordance with Article 179 of the Labor Code, the enjoyment of proportional vacations is exclusive to workers subject to indefinite-term employment contracts.
\»Workers subject to indefinite-term contracts Employees who, through no fault of their own, are unable to provide uninterrupted service for one year due to the nature of their work or any other circumstance, are entitled to a vacation period proportional to the time worked, if this is greater than five months.»
Article 179 of the Labor Code
- If you want to learn more about employees' vacation rights, you can read this article: https://aprendiendoderecho.com/las-vacaciones-anuales-remuneradas/
Likewise, they are entitled to the proportion of the Christmas bonus established in Article 219 of the Labor Code, which states that: »(…) The employer is obliged to pay the worker in the month of December, the Christmas salary, consisting of one-twelfth of the ordinary salary earned by the worker during the calendar year (…).»
However, workers under these types of contracts are not beneficiaries of the right enshrined in Articles 223 and following of the Labor Code, concerning the participation of workers in the profits of the company (bonus), since that benefit is enshrined for workers with indefinite-term contracts.
Finally, we will take a look at seasonal contracts and temporary contracts referred to in Articles 29 and 32 of the Labor Code.
- If you're interested in learning more about salary, I invite you to read this article: WAGES IN THE DOMINICAN REPUBLIC (2022)
Seasonal contracts: expire without liability for the parties
Article 29 of the Labor Code establishes that contracts relating to work which, by its nature, only lasts part of the year, are contracts that expire without liability for the parties, with the termination of the season.
The most typical employment contracts of this type are those for harvesting crops in the fields, such as cutting and pruning cacao, coffee, and other fruits. It should be noted that contracts in the sugar industry, regulated by Article 30 of the Labor Code, do not fall under this category.
This category could include contracts made by baseball teams in the Dominican winter league and basketball teams from different leagues that only work part of the year.
However, if the work extends beyond four months, the worker will be entitled to the financial assistance established in Article 82.
Temporary contracts: obligation to terminate employment after 3 months
“When the work is intended to temporarily intensify production or responds to accidental circumstances of the company, or its need ceases within a certain time, the contract terminates without liability for the parties upon completion of that service, if this occurs before three months have elapsed since the start of the contract. Otherwise, the employer shall pay the worker severance pay in accordance with the provisions of Article 80.” Art. 32 Labor Code.
Conclusion
In conclusion, workers hired for a fixed term or for a specific project or service are not entitled to employment benefits once the contract has been fulfilled. That is, once the agreed-upon term has expired or the specific project or service for which the worker was hired has been completed.
However, in cases where the employer has guaranteed the worker a contract for a specific period of time, the employer may not exercise the right to dismiss that worker.
If the employer unjustifiably dismisses a worker, he will have the obligation to pay the compensation established in the second paragraph of article 95 of the Labor Code.
Seasonal contracts terminate without liability for either party if they end before four (4) months have elapsed. If the contract lasts longer than four months, the worker will be entitled to the financial assistance established in Article 82 of the Labor Code.
Similarly, temporary contracts described in Article 32 of the Labor Code terminate without liability for either party if they last less than three months. If they extend beyond three (3) months, the worker will be entitled to severance pay in accordance with Article 80 of the Labor Code.
