Contract Termination Clause
In a ruling issued on October 13, the National Court decided to invalidate a contract termination clause based on poor performance that applies to call center agents. The court argued that a distinction must be made between an agreement on minimum performance standards and a situation involving a continuous and voluntary decline in an employee’s performance.
The National Court's Ruling on the Nullification of the Contract Termination Clause
It turns out that this is a non-negotiable termination clause imposed by the company in the document, meaning that if the employee does not accept it, they cannot sign the document.
The Court particularly notes that, in the documents in which the clause is included, it applies to positions that do not require a high level of education, which means that employees have fewer opportunities to find other jobs. Furthermore, employees’ freedom is more restricted.
In that regard, the position of call center agent falls within the lowest pay grade in its professional field, as evidenced by the professional classification system established in the Collective Bargaining Agreement.
On the other hand, the duties of these workers are strictly regulated by employers. Therefore, accepting a clause that sets performance standards based on a benchmark of 75% of the average monthly production achieved by workers in any other department.
This means that it immediately serves as a termination clause, disregarding any subjective or objective factors that may contribute to an employee’s poor performance—in this case, that of call center agents.
Is the cancellation of the contract termination clause unfair?
It may be considered unfair to require workers—who generally have more limited job options—to sign a waiver of their right to terminate their employment.
It should be noted that an employer may resort to disciplinary dismissal on the grounds of poor performance. This, incidentally, is a process that offers greater protections for the employee.
On the other hand, this standard clause amounts to a mass negotiation of specific working conditions, which violates the right to negotiate collective bargaining agreements.
The fact is, this approach circumvents the requirement of willful misconduct—which is a necessary element for dismissal on disciplinary grounds due to poor performance—and also bypasses the legal protections mandated by law for this type of employment contract.
The provision in question is completely at odds with the Supreme Court’s established approach to the termination of employment contracts for failure to meet the minimum performance standards set forth in the employment agreement.
The fact is that, regardless of the circumstances, this type of termination clause in a contract inevitably requires a basis for comparison that allows one to conclude that there has been poor performance; and in this particular case, that basis for comparison does not exist.
Furthermore, the termination clause currently under discussion violates the provisions of Article 3.1(c) of the Labor Code. Essentially, it establishes the parties’ intent as one of the sources of the employment contract.
Taking into account that conditions that are less favorable or that contravene legal provisions may not be imposed to the detriment of the employee.
In this case, the employee is being deprived of the protections afforded to him or her by both the collective bargaining agreement and the law to address a potential disciplinary dismissal due to decreased performance.
