#CostaRica 🇨🇷 #BDS_Article: Best Employer Practices in the Face of Judicial Claims

When examining the relationship between employee and employer, as well as the implications of agreements designed for productive activities, it is essential to emphasize the principle of good faith, which is the cornerstone of fulfilling employment contracts. For both parties, all actions should be guided by goodwill and transparency.

From the outset of the employment contract, there must be clarity on essential terms, such as the job role, working hours, work schedule, salary, vacation time, Christmas bonus, among other items. It is crucial to remember that rights and obligations apply to both the employee and the employer, meaning that the clearer the contractual terms, the lower the likelihood of encountering judicial disputes.

In the event of a dispute, it is wise to recognize that only a labor court judge can impose a definitive resolution to claims; therefore, a conciliation request prior to filing a lawsuit does not constitute an adjudication or a “blank check.” Rather, it is a voluntary means of restoring good faith and open communication. Conciliation is recommended as a best practice for employers, yet employers should proceed with caution and avoid hastily agreeing to a settlement. If the employer is certain of their legal standing and has well-preserved documentation, the ideal outcome is reaching a mutually satisfactory agreement for both parties.

When employers receive a labor lawsuit—essentially a request from an employee for judicial review by a labor court to verify asserted rights under the employment contract—it is advisable to respond formally and comprehensively to such claim, including all relevant arguments and supporting evidence. Being evasive or neglectful in responding does not generally yield favorable results.

In anticipation of potential labor lawsuits, even at risk of sounding repetitive, it is advisable to maintain a well-organized documentary records of significant events in the employment relationship. Experience in handling labor disputes reveals that one of the most frequent challenges is ensuring traceability of information and establishing a chronological record of events.

While good faith may lead to informal agreements sealed with a handshake during the provision of services, for the legal security of both parties, it is preferable to maintain thorough documentary records, which precisely supports the mutual good faith expected between employer and employee.

Regardless of the payroll size, all companies are encouraged to maintain a physical or digital record of events and agreements arising from employee requests or employer needs. Even after the employment relationship ends, employers should retain these records for at least four years.

Employers are also advised to foster good, open, and sincere communication with their employees. Effective leadership and clear communication are essential to preventing misunderstandings that could result in unnecessary legal disputes. It is far better to have everything thoroughly discussed than to face misinterpretations, particularly regarding disciplinary authority.

It is important to remember that upon receiving notice of a labor lawsuit, the employer should have as much documentation and as many witnesses as possible to clarify the response to be submitted to the labor court. Otherwise, the court is likely to rely on the labor principle in dubio pro operario, which generally dictates that in cases of unresolved doubt the claim will be interpreted in favor of the employee.

We have frequently emphasized the importance of having sound employer practices in place. Our experience in labor law has guided us in respecting employee rights, yet to avoid unfair outcomes for the employer it is prudent to keep thorough and robust records.

Efraín Zapata Muñoz

Partner, BDS Asesores