COLOMBIA Law and Practice Contributed by: Jaime Trujillo, Juan David Velasco, Natalia Ponce de León and Angelica Navarro, Baker McKenzie S.A.S.
3.5 Directors’, Officers’ and Shareholders’ Liability
• the collective bargaining agreements (where applicable); and • in some cases, by consistent case law (where not expressly regulated by law). 4.2 Characteristics of Employment Contracts Employment agreements in Colombia can be agreed verbally. Although not required by law, for evidence purposes it is advisable to formal - ise the terms of the employment relationship in writing and ensure that the written agreement contains certain minimum information (eg, initia - tion date, type of contract and events of termina - tion for cause). Some provisions are only valid if agreed in writing, such as: • trial period; • the characterisation of salary as being “inte - gral”; and • fixed-term duration of the employment agree - ment. This type of arrangement can only have a total duration of four years. 4.3 Working Time The ordinary working hours are those agreed by the parties, or, in the absence of an agreement, the established legal maximum, which is cur - rently 44 hours per week (this is being gradually reduced so that, by 15 July 2026, it will be 42 hours). Overtime work is that exceeding the ordinary working hours of the company and, in all cas - es, that exceeding the legal maximum working hours. Overtime work may never exceed two hours a day and 12 hours a week. The labour reform, approved by Congress in June 2025, eliminated the requirement for employers to obtain authorisation from the Ministry of Labour for employees to work overtime. Overtime work must be remunerated as follows:
Shareholders of corporations (SA) and simpli - fied stock corporations (SAS) are only liable up to the amount of their respective contributions. However, it is possible to pierce the corporate veil if the company is used to defraud the law or to the detriment of third parties. In these cases, the shareholders and administrators who have carried out, participated in or facilitated the fraudulent acts are liable too. However, pierc - ing the corporate veil involves a high burden of proof, and the specialist company court rarely finds sufficient evidence to do so. The business judgement rule applies to admin - istrators and usually does not interfere with the normal course of business of administrators or companies. However, the law establishes cer - tain duties for administrators that they need to uphold, with the most important being acting with loyalty and diligence and in the interest of the company. If shareholders consider that an administrator has not acted accordingly, they can commence a corporate action for liabil - ity ( acción social por responsabilidad ), and an administrator who has breached their duties can be liable for the damages caused to the com - pany. 4. Employment Law 4.1 Nature of Applicable Regulations Even though Colombia follows a civil law sys - tem, consistent case law can also be binding precedents on the parties to a dispute. Employ - ment relationships are governed by: • the law; • the employment contracts;
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