Signing a contract for the provision of a service does not exempt the employer from moratorium compensation when the employment relationship is proven

The principle of primacy of reality over the forms is a transversal principle applicable to labor disputes. To protect labor law, judicial offices have issued judgments in which the existence of employment contracts have been declared even when the parties have signed civil or commercial contracts, as may occur with a contract for the provision of a service. These judicial decisions are presented when it is possible to prove that the relationship had a labor nature in accordance with the elements established in Article 23 of the Colombian Labor Statute.

In this kind of legal conflicts, one of the issues that is frequently discussed is the moratorium sanction for the absence of salary payments, which is found in article 1 of the Decree 797 de 1949 that is also applicable to the public sector employees, and it is a sanction required to be declared as bad faith by the employer. On this matter, we consider useful analysing the recent sentences SL 4127 of 2021 of September 15, 2021, and SL 4524 of 2021 of October 6, 2021, that have set precedent and are relevant, when determining the existence or absence of good faith when signing consecutive civil, commercial, or administrative contracts of services.

¿What position does the Supreme Court of Justice have on the existence of multiple contracts for the provision of services to determine the good or bad faith of the employer?

The sentence SL 4127 of 2021 of September 15,2021 of the Labor Chamber of the Supreme Court of Justice points out that the simple existence of a series of service contracts signed between the parties do not show good faith conduct by the employer, furthermore, when in reality the subordination was evident during continuous years. Additionally, the Court referred to the sentence of the Supreme Court of Justice SL 15498 of 2017 defining that the mere presence of service contracts hadn’t constituted a reason to exempt it from the moratorium sanction, as precisely that unlawful hiring was used to cover up the true subordination in labor relationship. That is to say that, by consciously using contracts of services, they could not have legal connotations that exempted the employer from liability, nor did it imply the good faith of the entity.

However, the most recent sentence SL 4524 of 2021 of October the 6^th, 2021 of the Labor Chamber of the Supreme Court of Justice reaffirms and solidifies this thesis, defining that under the proven premise where the employee hadn’t executed the contracted services with autonomy and independence, which is predicated as civil relations in contract of services, leads to the existence of true and real employment contracts between parties. The entity exercising subordinate power decides to celebrate a series of service contracts that clearly became an instrument to cover up the dependence and labor relationship, which is an act contrary to good faith. The sentence affirms that in this case the entity cannot claim that it acted in good faith based on the series of the contracts for the provision of services signed with the employee, being attributable to him or her the sanction for moratorium compensation of the article 1 of decree 797 of 1949.

In this order of ideas, it is the duty of each judge to carry out a rigorous examination of the employer’s conduct considering the probative material, of the circumstances surrounding the development of the bond between the parties, and the reasons given by the employer in each case, to establish if the position of it is founded or not to conclude if the action is absent of good faith.

There is no doubt that determining the unifying position of the Labor Chamber of the Supreme Court of Justice with a clear, reiterated and protectionist thesis on the payment of the moratorium compensation of article 1 of the Decree 797 of 1949, discard the defence strategy of the employing entities to demonstrate good faith in court, the allusion to the continued celebration of contracts of services, in particular, when it is possible to prove that the subscription of these hides a true relationship of labor subordination between the parties.