#Panama 🇵🇦 #BDS_LaborAlert: Termination of Employment Relationship Due to Worker's Retirement
The retirement of a worker in our country involves relevant legal considerations. Firstly, it...
Costa Rican labor laws have not been characterized by its fast adaptation to changes, however, over the past seven years it has been more dynamic that in the last five decades.
Although the topic is not new because it has been talked about for many years now, the impact of technology, digitalization and the so-called fourth industrial revolution has accelerated its presence due to the pandemic.
Companies have been forced to rely on automation, artificial intelligence and system integration in order to make their operations more efficient and profitable, thereby leaving traditional jobs behind. Today, different chatbots perform administrative tasks that were formerly done by back office employees, self-service ATMs have replaced bank tellers, as well as supermarket, restaurant and packing employees, and smart telephone systems are replacing customer service agents, just to name a few examples.
In a time where everyone is questioning how to foster economic reactivation, the aforementioned topics might actually contribute to the unemployment problem as operational jobs are the easiest to be replaced or automated, and it is precisely in this sector where unemployment abounds in our country. So, how should we provide this segment of the population with the necessary skills and know-how to improve their job options if there is not enough time to train them or make changes in the education system?
On top of this, new employment trends create an additional pressure from digital platforms providing informal jobs, in which it is discussed whether the existing relationship is of a labor nature or otherwise, and also the proliferation of online tasks that puts the principle of territoriality at risk: this week we learn about one of a few cases where our social security administration rejected the registration as valid employer of foreign companies lacking physical premises in the country, even though they were interested in hiring Costa Rican employees to work remotely and were committed to comply with labor laws; however, this situation is deemed unreasonable under our labor regulations, even though they will precisely create a significant number of jobs internationally over the next few years. The pandemic unleashed the telework phenomenon and, therefore, the so-called digital nomads, who not necessarily settle down for a specific country, while also involving a challenge for labor regulations: in which country do these persons formally report to as workers? And more importantly: what labor law protects these persons regarding a number of issues such as work shifts, salaries, health insurance or pension plans?
Chaos always brings challenges and opportunities, depending on how you see it. The Costa Rican labor law has not stood out from the crowd for its flexibility or fast adaptation to changes; however, over the past seven years it has been more dynamic that in the last five decades. The country might benefit from the changing trends that have emerged over the past few years in connection with labor issues in order to lure more foreign investment and pave the road for the creation of more jobs precisely in light of the opportunities that all these new international trends represent for our country.
It is time to rethink many of the concepts we have been using for years in order to make sure we have a relevant role in the future of international markets.
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This and other pieces are available on our Café Laboral blog with La Nación newspaper.