Costa Rica's Labor Law Reform: Key Aspects Every Business With Operations In Costa Rica Should Know

Author:Mr Alejandro Trejos Gómez
Profession:Littler Mendelson

On January 25, 2016, the Labor Procedure Reform ("Reforma Procesal Laboral" or "RPL") was signed into law and published in the Costa Rica official gazette known as "La Gaceta." RPL becomes effective on July 25, 2017, and overhauls nearly half of the country's labor and employment laws (collectively "labor laws"). This is the first time the Labor Code has received substantial amendments since it was enacted in 1943.

This article presents an abridged outline of the most important changes under the reform and their potential impact on three fronts: (1) individual labor law governing the employer-employee relationship; (2) collective bargaining; and (3) labor procedures.

Individual Labor Law

Prior to the reform, the Labor Code prohibited discrimination in employment on the grounds of age, gender, race and religion. The RPL added unionization status and economic conditions as protected categories.

In addition, the RPL prohibits employees and recruiters from engaging in discriminatory practices, and makes discrimination by employees grounds for just cause dismissal.

The RPL further establishes a fast-track process enabling labor courts to summarily determine various claims, including those alleging discrimination and unjust dismissal, filed by employees who enjoy "special protection" from termination (such as pregnant employees, alleged victims of sexual harassment, and union workers). Moreover, working mothers alleging a denial of their rights relative to maternity, as well as workers who are minors between the ages of 15-17, can receive legal assistance free of charge to prosecute their claims.

Another important amendment pertains to the dismissal letter that employers must furnish to all employees prior to their dismissal. Under the reform, employers are now required to personally deliver to the employee a dismissal letter, outlining in clear detail the facts forming the basis for the dismissal. For example, if the employee violated a company policy, the dismissal letter should identify not only the particular company policy that the employee violated, but also describe the employee's actions that were deemed a violation of such policy.

If the employee refuses to accept the letter, the employer must deliver the letter to the nearest local office of the Ministry of Labor via certified mail within 10 calendar days of the dismissal.

The dismissal letters will be admissible as evidence in court in any litigation arising from the employment...

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