Costa Rican Code Of Labor Overhauled After Years Of Discussion

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BDS Asesores

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BDS Asesores
After seven years of discussion, the Congress of Costa Rica has finally approved that country's Labor Procedure Reform.
Costa Rica Employment and HR
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After seven years of discussion, the Congress of Costa Rica has finally approved that country's Labor Procedure Reform. This marks the most significant overhaul of Costa Rica's individual and collective labor law regime, and the procedure for related lawsuits, since the Labor Code was promulgated in 1943.

Introduced in 2005, Labor Law Procedure Reform was stalled by its low priority status in the legislative calendar. This year it finally caught the attention of the Legislative Chamber's members, and received the approval of Congress in September. The Reform brings long-awaited changes on three fronts: individual, collective labor law, and lawsuit procedures.

At the individual level, changes will protect the rights of vulnerable employees. The penalties for dismissing a pregnant worker are increased, and social background, sexual preference, union involvement and marital status have been added as prohibited grounds of discrimination. A new summary procedure has also been created for worker claims of discriminatory dismissal.

In collective labor law, the Reform includes modifications that bring the country in line with directives of the International Labor Organization (ILO). For example, the Reform fills the gap left in 2011 when Costa Rica's Constitutional Chamber declared the obligation of having a 60% of support in order to declare a legal strike to be unconstitutional. The Reform states that only a 50% of the attendees of a general assembly of a company's employees is necessary to declare a strike. Further, unions will gain the right to promote and sustain strikes. Important changes were also made to the strike procedure, the alternative resolution of conflicts and related issues.

Some of the most dramatic changes to the collective regime are on hold due to a partial veto made by Costa Rica's president, Laura Chinchilla. Before the Reform, people working for the State in the services deemed as essential to life, health and security could not strike. The Reform gives these employees the ability to engage in limited strike activity in order to exert bargaining pressure. Although these regulations are directly inspired by ILO's directives, President Chinchilla has vetoed them as being inadvisable given the country's current state of affairs. As the Reform's name suggests, the biggest changes involve the procedures through which lawsuits are resolved. A lawsuit may take several years to resolve under the current rules. The Reform provides for a fully oral procedure – a much faster and less expensive process for both parties. The Reform also relieves overcrowded courtrooms by promoting alternative means of conflict resolution through conciliation, mediation and arbitration procedures..

The President's decision to partially veto the Reform makes the next steps unclear. The Congress can disregard the veto and publish the Reform as it is, but this requires the votes of a qualified majority (three quarters of the 57 members of the Chamber). Once the Reform is finally published in the official diary, it will not be effective until eighteen months have passed, giving time to lawyers, judges and employers to adjust.

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Costa Rican Code Of Labor Overhauled After Years Of Discussion

Costa Rica Employment and HR

Contributor

BDS Asesores
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