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The many ways to lose an employee without paying

by Garland M Baker on May 5, 2008

Digging deeper into the three-letter rule to fire an employee in Costa Rica turned up something interesting. There is no three-letter rule. Giving two warning letters and then a final firing letter is only a custom in this country, not the law.

Actually, writing a letter to the employee is also a custom, not the law. The following analysis expands on the information written in the articles “Being too nice can backfire on any employer” and “Employers are getting pounded in labor court cases.”

The Código de Trabajo or labor code Article 81 refers to “causes for firing an employee” but does not refer to a warning anywhere except for in Section i. This section states the following: “when a worker, after an employer’s first warning, commits another fault described in Article 72, Sections a), b), c), d) and e) the act is sufficient for dismissal.”

Here is a gist of the content of those sections:
a.) Abandoning work during working hours without just cause or permission from the employer;

b.) The promotion of political, electoral propaganda and/or spreading information against the democratic institutions and religious liberty guaranteed by the constitution;

c.) Working under intoxication, drunkenness or a similar state;

d.) Using work tools and/or supplies for something other than their defined use;

e.) Carrying a firearm during work hours unless doing so is authorized or the gun is a tool of the job.

This would lead a reader of the labor law to surmise that any other infraction not listed above is sufficient for immediate firing. However, this is not the case. Recent court decisions state an employee should be given the chance to correct any fault. Neither the law nor the court decisions state how many chances an employee should get. Jurisprudence does dictate that giving an employee too many chances gives the worker judicial security turning a fault into the norm.

There is something else in the labor law that most people and even legal professionals do not know. An employer only has one month to censure an act that constitutes a firing offense. To censure means to reprimand or fire the employee. The custom of giving employees warning letters is to document breaking the rules for a court proceeding if one should arise. A verbal censure with two witnesses is also sufficient. This said, it is better to use the customary warning letter not witnesses.

Here is a list of firing offenses:

1.) Acting in an immoral, insulting or slanderous manner during work against the employer;

2.) Acting in an immoral, insulting or slanderous manner during work against a fellow worker if the such behavior alters the worker’s labor;

3.) Acting in an immoral, insulting or slanderous manner away from the workplace against an employer or representatives unless the behavior is provoked;

4.) Using property, machinery, tools, prime materials, products and supplies of the employer in an illegal or illegitimate way;

5.) Reveling trade secrets;

6.) Putting the workplace or fellow worker at jeopardy due to an imprudent, neglectful act;

7.) Not showing up for work for two consecutive days or for more than two days in a calendar month;

8.) Not following procedures to prevent accidents or sickness or not following directions to improve work performance and efficiency;

9.) Violating the sections of Article 72 after a first warning;

10.) Lying about work qualifications and/or references;

11.) Getting a prison sentence;

12.) Any other fault set forth in a labor contract with the employer.

In summary, the Costa Rican law labor is unclear about warning employees regarding committing acts that warrant dismissal from their jobs.

Only one section of one article in the entire law even mentions a warning. However, court jurisprudence suggests employers must give their employees a chance to correct wrongs.

Thus, this writer recommends giving employees at least one written warning letter for an offense warranting firing. An employer should write the letter to the employee in Spanish and it should go something like this:

“You have committed an act described in Article 81 of the Costa Rican labor law, and we are calling your attention to the fault.” The employer should describe the fault in the letter.

If the employee commits another violation, an employer should fire them immediately without employer responsibility. The employer should use another letter that says, “You are dismissed for committing an act described in Article 81 of the Costa Rican labor law.” The employer should describe the fault in the letter but not mention the first letter.

Without employer responsibility means the employer will not pay the employee separation pay, which comprises two parts: 1.) preaviso, notice pay, and 2.) cesantia, severance pay. An employee’s accumulated vacation and Christmas bonus are untouchable, and even a fired worker has the right these amounts.

Cesantia can be significant, up to eight months of pay for an employee who has worked eight years for the employer.

Almost all expats who come to Costa Rica have to deal with workers. Whether they are domestic help or laborers in a company, going to labor court is a nightmare and usually the bosses lose when battling with a worker in court. At least knowing how to fire a bad employee is a start in the right direction. Following these guidelines does not guarantee a court win but only a better chance of not losing so miserably.

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