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Practical manual for Income Tax 2022.

D) Exempt compensation derived from termination of the contract at the will of the worker (cessation)

Regulations: Articles 40, 41 and 50 Workers' Statute

The following assumptions must be distinguished:

1. When voluntary termination is motivated by any of the following causes (Art. 50 Workers' Statute):

  1. Substantial changes in working conditions that result in a loss of the worker's dignity.

  2. Non-payment or continued delays in payment of the agreed salary.

  3. Any other serious breach of contractual obligations by the employer, except in cases of force majeure, as well as the refusal by the employer to reinstate the worker in his or her previous working conditions in cases of geographical mobility and substantial changes in working conditions provided for in articles 40 and 41 of the Workers' Statute, when a court ruling has declared them unjustified.

In these cases, the exempt compensation will be the set for the unfair dismissals that were discussed in the previous section.

2. When the termination of the contract at the will of the worker is due to substantial changes in working conditions (working day, schedule and distribution of working time, shift work regime, remuneration system and salary amount, work and performance system and, functions, when they exceed the limits provided for functional mobility) by which the worker is harmed but which do not result in a detriment to his dignity as a worker (Art. 41 Workers' Statute).

In this case, compensation that does not exceed 20 days of salary per year worked is exempt, with periods of time less than a year being prorated by months, with a maximum of 9 monthly payments .

3. Likewise, when the employer notifies the worker of his transfer to a different workplace of the same company that requires a change of residence , the worker will have the right to the termination of his contract receiving compensation of 20 days' salary per year of service, with periods of time less than a year being prorated by months and with a maximum of 12 monthly payments (Art. 40 Workers' Statute).