Colombia: New Settlement Statute and impact on labor matters

In brief

The Congress of the Republic enacted Law 2220 of 2022, by means of which it issued the Settlement Statute and created the National Settlement System ("Law").

The Settlement as a dispute resolution mechanism is a fast and expeditious way to achieve the solution of differences between the parties, with the help of a neutral third party, which suggests settlement formulas and attests to what has been agreed between the parties. What is agreed upon is final and binding for the parties. In a settlement, the parties make mutual concessions in order to avoid possible litigation.

The Government has until 30 December 2022 to specify the conditions settlement centers must comply with in order to operate virtually.

Even though, before the Law, the parties could already enter into settlement agreements (and may continue to do so), having dispute resolution mechanisms in which neutral third parties participate will be of great help to avoid long and costly processes in a society that is increasingly litigious. Differences will be resolved in a timely manner, providing legal certainty and reducing costs.

Relevant labor aspects:

The Law establishes and includes the following aspects, among others:

  • Settlement may be judicial or extrajudicial.
  • The use of new technologies during settlement hearings with the purpose of holding them through virtual means.
  • Settlement hearings may be held in person, digitally or electronically, or both.
  • Settlement centers must adopt the use of information technologies for settlement processes, as well as include this modality in their regulations.
  • Settlement in labor matters does not constitute a procedural requirement.
  • All matters of a labor and social security nature that are susceptible to release and waiver, which do not include minimum non-negotiable rights, and connected with the rights of which the holder has the capacity to dispose of, may be settled.
  • In labor matters, the following can settle extra-judicially: (i) the competent labor judges according to their territorial jurisdiction, (ii) the labor inspectors, (iii) the regional and sectional delegates of the Ombudsman's Office, and (iv) the agents of the Public Prosecutor's Office in labor matters. In the absence of all of the above, a settlement can be carried out by the ombudsmen, or the municipal civil or promiscuous judges, if the matter is within their jurisdiction.

National Settlement System:

Additionally, with the creation of the National Settlement System, the Law seeks to implement a public settlement policy, tending to formulate and adopt a strategic plan through which establishes programs, objectives, strategies, actions, goals and indicators to achieve the promotion, strengthening and development of the settlement.

Validity of the Law:

The Law enters into force six months after its enactment, that is, on 1 January 2023.

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