#CostaRica 🇨🇷 #BDS_Article: Conciliate Before Suing: An Effective Path to Resolving Labor Disputes

Disagreements are a normal occurrence throughout the employment relationship. It is understandable that workers and employers may have differing perspectives. However, this alone should not foster a litigious culture in which all types of disputes are taken directly to the judicial system.

Before submitting any labor-related conflict to the judgment of a labor court, it is advisable to consider the existence of alternative dispute resolution mechanisms, whose primary purpose is to resolve the issue while avoiding the complexities of procedural law and the burdensome processing of formal litigation.

If the worker and employer take a step back from the litigation route, they stand a much better chance of reaching a resolution based on mutual understanding and willingness, whether through direct conciliation or through third-party intervention in mediation, as provided for by the Alternative Dispute Resolution Act No. 7727 (RAC Law). These alternatives help eliminate uncertainty about each party’s position and avoid prolonged waiting periods.

In the pursuit of such alternative mechanisms to resolve labor disputes, both the Ministry of Labor and Social Security and the Office of Labor Legal Assistance of the Judiciary have, in recent years, created significant opportunities for workers and employers to reach mutual agreement.

It should be noted that when a disagreement escalates into a formal judicial proceeding, the labor courts will, of course, make every effort to resolve the case with utmost commitment and adherence to the law. However, litigation does not always yield outcomes aligned with each party’s expectations. This is largely due to the fact that judicial decisions are not always a reflection of the actual truth of the controverted issues but on the contents of the case file, which may not accurately or fully reflect the actual circumstances surrounding the employment relationship.

With certain well-defined exceptions, it can be asserted that even the most complex employment disputes may be resolved through peaceful alternative methods. The mechanism offered by the RAC Law is swift, cost-effective, and far less taxing for both the employer and the concerned worker. Moreover, it spares both parties from engaging in a judicial system that is increasingly congested.

The current state of Costa Rican labor law makes it imperative to promote and apply conciliation and mediation as legitimate alternatives that have always been available for resolving employment-related issues—not only to ease the burden on labor courts, but also to give practical meaning to the saying: “People understand each other through dialogue.”

Encouraging and using negotiation mechanisms in labor matters allows Costa Rican society to shift away from the traditional model of relying solely on a labor court or a Ministry of Labor inspector to resolve conflicts. Both in theory and in practice, it has been proven that labor disputes are not always comprehensively resolved by a court ruling. The high rates of appeals against judgments or the enforcement proceedings that follow clearly show the dissatisfaction of the parties involved with the decision imposed by a third party.

To avoid such dissatisfaction in judicial decisions, it is crucial to consider that Article 456 of the Labor Code rightly emphasizes the importance of alternative dispute resolution methods. This provision establishes that conciliation, mediation, and arbitration must take precedence as instruments of peace between the parties and for society as a whole, over the pursuit of a court ruling.

Conciliation and mediation may be implemented in labor disputes either within or outside of judicial proceedings. In recent years, the involvement of private RAC centers has played a significant role in promoting this approach, always in alignment with the principles of conciliation and party autonomy.

Judicial proceedings often lead to dissatisfaction among the parties, as the final decision may not meet the expectations of the employer or the concerned worker — expectations that are only shattered after waiting many months, or even years. Currently, a definitive ruling may take at least over two years to be issued. For this reason, before engaging in litigation, we strongly recommend considering the use of alternative dispute resolution mechanisms first.

Efraín Zapata Muñoz
 Partner, BDS Asesores

I have a question